Presentation on theme: "“You cannot be all things to all people”"— Presentation transcript:
1 “You cannot be all things to all people” Chapter 7:Market Segmentation, Targeting, and Positioning for Competitive Advantage“You cannot be all things to all people”
2 Market Segmentation Process The division of the overall market into groups with common characteristicsMarket TargetingThe act of evaluating and selecting one or more segments to serveMarket PositioningOccupying a specific place in the minds of customers within target marketsDifferentiating your product/service from those of competitors
3 Steps in Market Segmentation, Targeting, and Positioning (Fig. 7.1) 1. Identify bases forsegmenting the market2. Develop segment profilesMarket Targeting3. Develop measure ofsegment attractiveness4. Select target segmentsMarket positioning5. Develop positioning fortarget segments6. Develop a marketingmix for each segment
4 Step 1. Market Segmentation Levels of Market Segmentation Mass MarketingSame product to all consumers(no segmentation, i.e Coca-Cola)Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.Segment MarketingDifferent products to one or more segments(some segmentation, i.e. Marriott)
5 Step 1. Market Segmentation Levels of Market Segmentation Niche MarketingDifferent products to subgroups within segments(more segmentation, i.e. Standard or Luxury SUV’s)MicromarketingProducts to suit the tastes of individuals and locations(complete segmentation)Step 1. Market Segmentation Levels of Market SegmentationLocal MarketingTailoring brands/ promotions to local customer groups, i.e SearsIndividual MarketingTailoring products and programs to the needs of individual customers, i.e. Dell
6 Step 1. Market Segmentation Geographic Segmentation World Region or CountryCity or Metro SizeDensity or Climate
7 Step 1. Market Segmentation Demographic Segmentation Dividing the market into groups based on variables such as:AgeGenderFamily size or life cycleIncomeOccupationEducationReligionRaceGenerationNationalityMost Popular Bases & Easiest to Measure
8 Step 1. Market Segmentation Psychographic Segmentation Divides Buyers Into Different Groups Based on:Social ClassLifestylePersonality
9 Step 1. Market Segmentation Behavioral Segmentation Dividing the market into groups based on variables such as:OccasionsBenefitsUser statusUsage rateLoyalty statusReadiness stageAttitude toward product
10 Step 1. Market Segmentation Requirements for Effective Segmentation Size, purchasing power, profilesof segments can be measured.Segments can be effectivelyreached and served.Segments are large or profitable enough to serve.MeasurableAccessibleSubstantialDifferentialActionableSegments must respond differently to different marketing mix elements & programs.Effective programs can be designed to attract and serve the segments.
11 Discussion Connections Take another look at Figure Can you identify specific companies, other than the examples already discussed, that practice each level of segmentation?Using the segmentation bases you’ve just read about, segment the cell-phone market.Describe each of the major segments and sub segments.
12 Step 2. Market Targeting Evaluating Market Segments Segment Size and GrowthAnalyze current sales, growth rates and expected profitability for various segments.Segment Structural AttractivenessConsider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.Company Objectives and ResourcesCompany skills & resources needed to succeed in that segment(s).Look for Competitive Advantages.
14 Socially Responsible Target Marketing Smart targeting helps companies and consumers alike.Target marketing sometimes generates controversy and concern.Disadvantaged and vulnerable can be targeted.Cigarette, beer, and fast-food marketers have received criticism in the past.Internet has come under attack because of the loose boundaries and lack of control in marketing practices.
15 Discussion Connection At the last Discussion Connection, you segmented the cell-phone market.Now, pick two companies that serve this market and describe their segmentation and targeting strategies.Can you come up with one that targets many different segments versus another that focuses on only one or a few segments?How does each company you choose differentiate its marketing offer and image?How has each done a good job of establishing this differentiation in the minds of targeted consumers?
16 Step 3. Choosing a Positioning Strategy Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.Marketers must:Plan positions to give their products the greatest advantage in selected target markets,Design marketing mixes to create these planned positions.
17 PositioningThe objective of positioning is to create a distinctive place in customers’ mind.In the end, positioning is determined by the customer, not by the company.Three Elements in True Positioning:Who You Are (Creating an Image)How You Are Different From Competition (Differentiation)How You Can Satisfy Their Needs & Wants (Communicating Benefits)
18 SIX POSITIONING APPROACHES POSITIONING BY PRODUCT FEATURESPOSITIONING BY BENEFITSPOSITIONING FOR USER CATEGORYPOSITIONING FOR USAGE OCCASIONPOSITIONING AGAINST ANOTHER COMPETITORPOSITIONING AGAINST ANOTHER PRODUCT CLASS OR VIS-A-VIS THE COMPETITION
21 Step 3. Choosing a Positioning Strategy Step 1. Identifying Possible Competitive AdvantagesStep 2. Selecting the Right Competitive AdvantageStep 3. Communicating and Delivering the Chosen Position
22 Identifying Possible Competitive Advantages Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value.Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,
23 Identifying Possible Competitive Advantages ProductDifferentiationi.e. Features, Performance, Style & Design, or AttributesServicesDifferentiationi.e. Delivery, Installation,Repair Services, CustomerTraining ServicesImageDifferentiationi.e. Symbols, Atmospheres, EventsPersonnelDifferentiationi.e. Hiring, Training Better People Than Competitors Do
24 Choosing the Right Competitive Advantages ImportantProfitableDistinctiveCriteriaFor DeterminingWhich DifferencesTo PromoteSuperiorAffordableCommunicableUnique Selling PropositionPreemptive
25 Selecting an Overall Positioning Strategy (Fig. 7.4) PriceMore The same LessMoreThe SameLessMoreforLessMoreforMorefor thesameBenefitsThe sameforlessLess formuchless
26 Communicating and Delivering the Chosen Position Once position is chosen, company must take strong steps to deliver and communicate the desired position to target consumers.All the company’s marketing mix must support the positioning strategy.Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies.
27 Review of Concept Connections Define the three steps of target marketing: market segmentation, market targeting, and market positioning.List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets.Explain how companies identify attractive market segments and choose a market-coverage strategy.Discuss how companies can position their products for maximum competitive advantage in the marketplace.