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Market Segmentation and Product Positioning. Exercise 1.If Starbucks Via was a person, what would that person be like? Describe his/her characteristics.

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Presentation on theme: "Market Segmentation and Product Positioning. Exercise 1.If Starbucks Via was a person, what would that person be like? Describe his/her characteristics."— Presentation transcript:

1 Market Segmentation and Product Positioning

2 Exercise 1.If Starbucks Via was a person, what would that person be like? Describe his/her characteristics and interests. 2.What does this tell you? Are your descriptions consistent with the way Starbucks Via is being promoted (and positioned)? MacBeth and Kyle love Via! MacBeth and Kyle love Via! MacBeth and Kyle love Via! Far Out Via Coffee Far Out Via Coffee

3 What is Market Segmentation? Market segmentation is the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) of individuals for the firm to serve Market segmentation is the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) of individuals for the firm to serve Why Segment? Why Segment? Fragmentation: Different groups have different needs/wants Fragmentation: Different groups have different needs/wants Allows marketers to establish appropriate marketing mix for a given segment Allows marketers to establish appropriate marketing mix for a given segment

4 Five Tasks In Market Segmentation:

5 (1) Analyze Consumer-Product Relations Analyzing C-P Relations involves figuring out how affect, cognition and behavior are relevant to how consumers experience a product Three Approaches 1.Brainstorming to figure out what types of consumers are most likely to buy product and how they differ from other groups of customers 2.Focus groups can be used to identify what customers want, their values, etc. 3.Secondary research can be used to gain additional information on key market segments

6 Five Tasks In Market Segmentation:

7 (2) Investigate Segmentation Bases Four common segmentation bases Four common segmentation bases Benefit Benefit Psychographic Psychographic Person/situation Person/situation Geodemographic Geodemographic

8 Benefit Segmentation Divide the market up on the basis of the benefits they seek from a product. Divide the market up on the basis of the benefits they seek from a product. An example: toothpaste An example: toothpaste

9 Psychographic Segmentation Psychographics Psychographics Uses psychological, sociological, anthropological factors to develop segments Uses psychological, sociological, anthropological factors to develop segments Personality (sensation seeking) Personality (sensation seeking) Motives (status) Motives (status) Lifestyles (HOGs) Lifestyles (HOGs) VALS2 (Values + Lifestyles) System VALS2 (Values + Lifestyles) System Based on psychological characteristics that relate to consumer behavior Based on psychological characteristics that relate to consumer behavior Can Identify Prevalence of 8 Types by Zip Code Can Identify Prevalence of 8 Types by Zip Code

10 ThinkersBelieversInnovatorsAchieversStriversExperiencersMakersSurvivors High Resources High Innovation Low Resources Low Innovation Ideals Achivem. Self Expr. VALS Web Site Values and Lifestyles (VALS) System

11 VALS Types – Part 1

12 VALS Types – Part 2

13 Person/Situation Segmentation Divide market up on the basis of the benefits certain types of individuals (person) desire in certain situations (situation) Divide market up on the basis of the benefits certain types of individuals (person) desire in certain situations (situation) Different strokes, for different folks…in different situations Different strokes, for different folks…in different situations An Example: Old Spice An Example: Old SpiceOld SpiceOld Spice

14 Person/Situation Segmentation (Steps) Figure out if there are different usage situations that influence which attributes are important Figure out if there are different usage situations that influence which attributes are important Assess perceptions of different segments about product in different situations Assess perceptions of different segments about product in different situations Create “user” x “usage” matrix Create “user” x “usage” matrix (cont. on next slide)… (cont. on next slide)… Kids Adults HomeSports

15 Person/Situation Segmentation (Steps) Rank cells in terms of market share Rank cells in terms of market share Identify important benefits sought in each cell of matrix Identify important benefits sought in each cell of matrix Figure out where your competitors are located in the matrix Figure out where your competitors are located in the matrix Position your product in matrix and figure out how well you are meeting the need relative to your competitor Position your product in matrix and figure out how well you are meeting the need relative to your competitor Identify opportunities based on segment size, needs, and competitive advantage of your offering Identify opportunities based on segment size, needs, and competitive advantage of your offering

16 Demographic Segmentation Demographic Segmentation Demographic Segmentation Age, sex,, income, education, family size, occupation, marital status Age, sex,, income, education, family size, occupation, marital status Sociocultural Segmentation Sociocultural Segmentation Culture, religion, race, social class Culture, religion, race, social class Generational Segmentation Generational Segmentation Kids, tweens, teens, Gen X, Gen Y, Gen Z, Boomers Kids, tweens, teens, Gen X, Gen Y, Gen Z, Boomers

17 Geodemographic Segmentation Geodemography Geodemography Combination of geographic and demographic information Combination of geographic and demographic information Creates classifications of actual, addressable, mappable neighborhoods where consumers live and shop Creates classifications of actual, addressable, mappable neighborhoods where consumers live and shop PRIZM NE system by Claritas PRIZM NE system by Claritas Assumes consumers in certain neighborhoods are similar in many respects and that the best prospects are those who actually use a product or other consumes like them Assumes consumers in certain neighborhoods are similar in many respects and that the best prospects are those who actually use a product or other consumes like them 66 clusters: (one example)  66 clusters: (one example) 

18 Sample Claritas (PRIZM) Cluster YOUNG INFLUENTIALS (22) Once known as the home of the nation's yuppies, Young Influentials reflects the fading glow of acquisitive yuppiedom. Today, the segment is a common address for younger, middle- class singles and couples who are more preoccupied with balancing work and leisure pursuits. Having recently left college dorms, they now live in apartment complexes surrounded by ball fields, health clubs, and casual-dining restaurants. More Clusters

19 Five Tasks In Market Segmentation:

20 (3) Positioning Four Steps in Positioning 1.Evaluate (direct and indirect) competition 2.Create product/service with competitive advantage Attribute (Komperdell Gloves – Seamless Technology) Attribute (Komperdell Gloves – Seamless Technology) Use or application (A Snapple A Day) Use or application (A Snapple A Day) Product user (Zales – three store concepts) Product user (Zales – three store concepts) Product class (Position margarine as butter) Product class (Position margarine as butter) Competitor (Burger King vs. McDonalds) Competitor (Burger King vs. McDonalds) Price/quality (Target – an upscale discounter) Price/quality (Target – an upscale discounter) Emotion (Nike - Just Do It!) Emotion (Nike - Just Do It!)

21 (3) Positioning Four Steps in Positioning 1.Evaluate (direct and indirect) competition 2.Create product/service with competitive advantage 3.Develop marketing mix to appeal to target segment 4.Measure response and adapt strategy if needed May need to reposition product/service May need to reposition product/service Repositioning may involve bringing old brand back to life (retro brand). Repositioning may involve bringing old brand back to life (retro brand).

22 Creating the Brand Personality Brand PersonalityBrand Personality A distinctive image that captures a product’s or service’s essence (character, benefits)A distinctive image that captures a product’s or service’s essence (character, benefits) Where does my brand stand?Where does my brand stand? Ask customers what characteristics are importantAsk customers what characteristics are important Measure your brand and competition on those dimensionsMeasure your brand and competition on those dimensions Plot and evaluate your brand’s location in a perceptual mapPlot and evaluate your brand’s location in a perceptual map

23 Describe These Brand Personalities Volvo Wagon Lamborghini

24 Perceptual Map ConservativeSporty Practical/Affordable Classy/Distinctive Positioning Bases Porsche BMW Toyota VW Lincoln Mercedes Ford Plymouth Position

25 Five Tasks In Market Segmentation:

26 Four basic segmentation strategy alternatives Do not to enter the market Be a mass marketer instead of segmenting Market to only one segment Market more than one segment and design a separate marketing strategy for each (4) Select Segmentation Strategy

27 Criteria for Successful Segmentation Sustainable Sustainable Large enough to justify its own marketing mix Large enough to justify its own marketing mix Identifiable and Measurable Identifiable and Measurable If not, can not determine whether it’s sustainable If not, can not determine whether it’s sustainable Accessible Accessible Must be able to reach segment with marketing mix Must be able to reach segment with marketing mix Responsive Responsive The segment responds differently than another segment The segment responds differently than another segment If not, no need to develop unique marketing mix If not, no need to develop unique marketing mix

28 Five Tasks In Market Segmentation:

29 Marketing Mix Product Price Promotion Place Closely linked with the segmentation strategy (5) Design the Marketing Mix

30 Wrapping Up An Application to Sports Marketing

31 Some of My Favorite Products

32 What Do All These Products Do For Me? “Means End Chain” Product Attributes Functional Consequences Psychological Consequences Personal Values


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