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1 Market Segmentation Selecting Target Markets Positioning.

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Presentation on theme: "1 Market Segmentation Selecting Target Markets Positioning."— Presentation transcript:

1 1 Market Segmentation Selecting Target Markets Positioning

2 2 What is Market Segmentation? A market is people or organizations with needs to be satisfied, money to spend and the willingness to spend it. A market is people or organizations with needs to be satisfied, money to spend and the willingness to spend it. But buyers of a single product or service differ. This is the logic behind market segmentation. But buyers of a single product or service differ. This is the logic behind market segmentation.

3 3 Six End-User Markets 1. The retail or consumer market (households, families) 2. The institutional market (hospitals, schools, prisons, day-care centers) 3. The commercial market (retailers, wholesalers, and business-to-business services) and industrial market (manufacturers, processors and natural resources) 4. The government market (municipal, provincial and federal departments and agencies) 5. The agribusiness market (farms) 6. The export market (other countries) (These may be potential markets for your product)

4 4 Market Segmentation First: Inquire about the existence and satisfaction of needs/ wants and benefits sought in each of the six potential end- user markets. First: Inquire about the existence and satisfaction of needs/ wants and benefits sought in each of the six potential end- user markets. Second: Look specifically in each market for detailed characteristics of buyers in that market. Second: Look specifically in each market for detailed characteristics of buyers in that market.

5 5 Ways the Consumer Market might be Segmented: Demographics (characteristics of buyers) Demographics (characteristics of buyers) Behavior Behavior

6 6 Demographics Age group Age group Gender Gender Size of Household Size of Household Marital Status Marital Status Presence of Children Presence of Children Family Life Cycle Family Life Cycle Education Level Education Level Occupation Religion Language(s) Spoken Race Nationality Geography (region, urban, rural, climate) Income Lifestyle

7 7 Behavior Benefits Sought (for example: for toothpaste- whiter teeth, no cavities, fresher breath) Benefits Sought (for example: for toothpaste- whiter teeth, no cavities, fresher breath) Usage Level (light, medium, heavy) Usage Level (light, medium, heavy) User Status/ Patronage Level (non-user, ex-user, potential user, regular user) User Status/ Patronage Level (non-user, ex-user, potential user, regular user) Readiness Level / Intention to Purchase (unaware, aware, informed, interested) Readiness Level / Intention to Purchase (unaware, aware, informed, interested) Current Ownership (have none, one, two, types or brands owned) Current Ownership (have none, one, two, types or brands owned) Loyalty Status (brand loyal, store loyal, deal loyal, switcher) Loyalty Status (brand loyal, store loyal, deal loyal, switcher)

8 8 Bases of Market Segmentation The basis of Market Segmentation is to select the market segment that is most meaningful, to better satisfy more people. The basis of Market Segmentation is to select the market segment that is most meaningful, to better satisfy more people. Many market segments are unique to a particular product or market (example: Hair color matters to manufacturers of tinting products or the number of children in a household participating in minor hockey matters to summer hockey schools). Many market segments are unique to a particular product or market (example: Hair color matters to manufacturers of tinting products or the number of children in a household participating in minor hockey matters to summer hockey schools).

9 9 Classifying Potential Customers The Key is to find one or more ways of classifying or grouping users or potential users that really matter in terms of reaching them and meeting (satisfying) their needs. The Key is to find one or more ways of classifying or grouping users or potential users that really matter in terms of reaching them and meeting (satisfying) their needs.

10 10 Selecting Target Markets The key reason to do segmentation analysis is to identify potential Target Markets: The key reason to do segmentation analysis is to identify potential Target Markets: 1. Your unique package of benefits as compared to your direct or indirect competition. 2. The size, location and needs of various buyer groups (segments) 3. Your resources and ability to efficiently reach any particular buyer group (segment)

11 11 Select a Market Segment (group) That is big enough to warrant attention That is big enough to warrant attention That is not as satisfied as they want to be That is not as satisfied as they want to be That are relatively easy to reach via available channels of distribution and advertising That are relatively easy to reach via available channels of distribution and advertising These groups are your Target Markets (each target market is unique and defines who, when and where of a marketing strategy) These groups are your Target Markets (each target market is unique and defines who, when and where of a marketing strategy)

12 12 Positioning Positioning offers some advantage over the competition in a way that matters to a particular target market. Positioning offers some advantage over the competition in a way that matters to a particular target market. Entrepreneurs must design a package of benefits- product, price, place, promotion that offers an advantage over the competition. Entrepreneurs must design a package of benefits- product, price, place, promotion that offers an advantage over the competition.

13 13 Positioning Questions: Does your toothpaste reduce cavities better than other brands? Does your toothpaste reduce cavities better than other brands? Is your accounting software package fully compatible with the leading data base software? Is your accounting software package fully compatible with the leading data base software? Is your ice cream really richer or more flavorful? Is your ice cream really richer or more flavorful? Can your product be on any customers doorstep in 24 hours? Can your product be on any customers doorstep in 24 hours? Do you offer unique sizes? Do you offer unique sizes? Is the image or personality of your store or product appealing to a large group of buyers? Is the image or personality of your store or product appealing to a large group of buyers?

14 14 How are You Better? The market positioning for any product, service or store is how you wish o be seen in the eyes of members of your target markets compared to other products, services or stores. The market positioning for any product, service or store is how you wish o be seen in the eyes of members of your target markets compared to other products, services or stores. Your market positioning statement should catch your buyers attention and indicate how you are different from and better than available alternatives! Your market positioning statement should catch your buyers attention and indicate how you are different from and better than available alternatives! Advertising Slogans often reveal market positions. Advertising Slogans often reveal market positions.


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