CHP: 8&10-2 Effective Targeting Requires… Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. Establish and communicate the distinctive benefits of the market offering.
CHP: 8&10-3 Ford’s Model T Followed a Mass Market Approach
CHP: 8&10-4 Steps in Market Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
CHP: 8&10-5 Four levels of Micromarketing Segments Local areasIndividuals Niches
CHP: 8&10-6 Segment Marketing Targeting a group of customers who share a similar set of needs and wants.
CHP: 8&10-7 Basic Market Preference Patterns
CHP: 8&10-8 Customerization Combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.
CHP: 8&10-11 Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class
CHP: 8&10-12 Psychographic Segmentation: The VALS Segmentation System
CHP: 8&10-13 Behavioral Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude
CHP: 8&10-14 Behavioral Segmentation Breakdown
CHP: 8&10-15 Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics Personal Characteristics
CHP: 8&10-16 Segmenting for Business Markets Demographic segmentation –Industry, company size, location Operating variables –Technology, usage status, customer capabilities Purchasing approaches Situational factors –Urgency, specific application, size of order Personal characteristics –Buyer-seller similarity, attitudes toward risk, loyalty
CHP: 8&10-17 Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments. Effective Segmentation Criteria
CHP: 8&10-18 Market Targeting Evaluating Market Segments Segment Size and Growth –Analyze current sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness –Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers. Company Objectives and Resources –Company skills & resources needed to succeed in that segment(s). –Look for Competitive Advantages.
CHP: 8&10-19 Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing Market Targeting Market Coverage Strategies
CHP: 8&10-20 Patterns of Target Market Selection
CHP: 8&10-21 Patterns of Target Market Selection
CHP: 8&10-22 Patterns of Target Market Selection
CHP: 8&10-25 Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.
CHP: 8&10-26 Choosing a Positioning Strategy Step 1. Identifying Possible Competitive Advantages Step 2. Selecting the Right Competitive Advantage Step 3. Communicating and Delivering the Chosen Position
CHP: 8&10-27 Defining Associations Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands
CHP: 8&10-29 Deliverability Criteria for PODs Feasibility Communicability Sustainability
CHP: 8&10-30 Examples of Negatively Correlated Attributes and Benefits Low-price vs. High quality Taste vs. Low calories Nutritious vs. Good tasting Efficacious vs. Mild Powerful vs. Safe Strong vs. Refined Ubiquitous vs. Exclusive Varied vs. Simple
CHP: 8&10-31 Positioning: How many ideas to promote? Unique selling proposition –Four major positioning errors 1.Underpositioning 2.Overpositioning 3.Confused positioning 4.Doubtful positioning Developing and Communicating a Positioning Strategy