Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

Market Segmentation, Targeting And Positioning Marketing Management Market Segmentation, Targeting And Positioning

+ What are Markets? Requirements of a Markets Need Ability Willingness Market: people or institutions with sufficient purchasing power, authority, and willingness to buy. Requirements of a Markets Need Ability Willingness Authority + 4/22/2017 Compiled by: Gul Sayyar, ACCA-UK

“Market Segmentation, Targeting and Positioning” Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Some marketers says that Mass Marketing is dying. Most companies are turning to Micromarketing at one of four levels: Segmentation, Niches, Local areas, Individuals. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

Market Segmentation (Definition): The process of splitting customers, or potential customers, in a market into different groups, or segments, within which customers share a similar level of interest in the same or comparable set of needs satisfied by a distinct marketing proposition. Division of the total market into smaller, relatively homogeneous groups. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” A market segment consists of a group of customers who share a similar set of needs and wants. We can distinguish between car buyers who are primarily seeking low-cost basic transportation, those seeking luxurious driving experience . The marketer does not create the segments; the marketer task is to identify the segments and decide which one(s) to target. Marketing segmentation is better than Mass marketing, company can better design, price, disclose and deliver the product or service to satisfy the customer. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Flexible market offering: In a segment marketing not all customers may require the same product or service. Therefore, marketers may come up with a flexible market offering. A flexible market offering consists of two parts: a clear solution containing the product and service elements that all segment customers value, and discretionary options that some segment’s customers value. Each option might carry an additional charge. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Market Niches: A niche is a more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub segments. A small but profitable segment of a market suitable for focused attention by a marketer. Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them. For Example: Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” For example, sports channels like STAR Sports, ESPN, STAR Cricket, and Fox target a niche of sports lovers. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” local market (Definition) Clients and customers who will buy a product in the region or area in which it is produced. For marketing purposes it is important to know who will buy the product, where they are located and how far they will travel to obtain the product. The local market includes customers located within the region the product or service is produced or made available. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Target marketing is leading to marketing program tailored to the needs and wants of local customer groups (trading areas, neighborhoods even individual stores). For example citibank provides different mixes of banking services in its branches, depending on neighborhood demographics. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Customerization: The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one to one marketing”. Today customers are taking more individual initiative in determining what and how to buy. Customerization is certainly not for every company: it may be very difficult to implement for more complex products such as automobiles. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Segmenting Consumer Markets: Geographic Segmentation Demographic Segmentation Psychographic Segmentation Behavioral Segmentation Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Geographic Segmentation: Dividing the market into different geographical units such as nation, states, religions, countries, cities or neighborhoods. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Demographic Segmentation: The market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, religion etc. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Psychographic Segmentation: Markets are divided on the basis of personality traits, lifestyle, or values. People within the same demography group can exhibit very different psychographic profile. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Behavioral Segmentation: In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of, attitude toward, or response to a product. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Target Marketing: (Definition) Consists of a set of buyers who share common needs or characteristics that the company decides to serve. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Selecting Target Market Segments Undifferentiated (mass) marketing Differentiated (segmented) marketing Concentrated (niche) marketing Micromarketing (local or individual) Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Choosing a Target Marketing Strategy: We must Consider: Company resources The degree of product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” The place the product occupies in consumers’ minds relative to competing products. Typically defined by consumers on the basis of important attributes. Involves implanting the brand’s unique benefits and differentiation in the customer’s mind. Positioning maps that plot perceptions of brands are commonly used. Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” Choosing a Positioning Strategy: 1.Identifying possible competitive advantages: Differentiation can be based on Products Services Channels People Image Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” 2.Choosing the right competitive advantage: How many differences to promote? Unique selling proposition Several benefits Which differences to promote? Criteria include: Important Distinctive Superior Communicable Affordable Profitable Compiled by: Gul Sayyar, ACCA-UK 4/22/2017

“Market Segmentation, Targeting and Positioning” 3.Choosing a positioning strategy: Value propositions represent the full positioning of the brand. Possible value propositions: More for More More for the Same More for Less The Same for Less Less for Much Less Compiled by: Gul Sayyar, ACCA-UK 4/22/2017