Segmentation, Targeting and the Marketing Mix

Marketing Strategies Investigate Segmentation Opportunities Determine Target Market Develop the Marketing Mix – Product Strategies Branding Packaging – Distribution Intensity of Distribution – Promotion Consumer or trade oriented Promotions mix – Price Competitive, skimming, penetration

Marketing Segmentation Identifying groups of people with shared characteristics within the broad markets for consumer or business products aggregating these groups into larger segments according to their mutual interest in the product’s utility

Steps to Segment Identify the needs structure of the consumer population Group the customers into homogeneous segments Id factors that are correlated with the segments (segmentation variables) Select your target market Develop your positioning strategy

Segmentation Variables Demographics – age, income, sex, family size Geographics – regions, climate, density Behavioristic – benefits sought, usage rates, purchase occasion, psychographics

Target Markets these are the aggregate segments that you will direct your marketing efforts towards You’re prospects!

The Target Market Decision Undifferentiated Marketing Differentiated Marketing Focused (Concentrated Marketing)

How Can the PLC be of Use in Target Marketing? Influences the type of advertising that may be most appropriate Primary vs. Selective Demand Stimulation Introduction - education the focus

PLC

Introduction – Innovative consumers – Little competition – Considerable costs – Establish position as market leader – Push Strategy – Primary demand stimulation Growth Maximize market share early Pull Strategy through the channel Push Strategy – aim efforts at retailers and encourage distributors to stock, promote products

PLC Growth Stage - turn the focus to the individual brand and maximize market share before competition becomes more aggressive Maturity Stage - begin full focus on selective demand stimulation as competition increases and weaker competitors begin to exit the market

Adoption Process Awareness Interest Evaluation Trial Adoption/Rejection

Diffusion of Innovation with the Chasm

5 Categories of Adopters/Diffusion Process Innovators – 2.5% Early Adopters – 12.5% Early Majority - 34% Late Majority - 34% Laggards - 16%

Diffusion of Innovation relates to PLC

Crossing the Chasm

Positioning Positioning by Attribute Positioning by Price and Quality Positioning by Use or Application Positioning by Product User Best Strategic Tool – Perceptual Maps!

Product Differentiation Perceptible Differences - unique taste, features, quality Hidden Differences - ingredients (i.e., natural vs. artificial chemicals, use of recyclables, etc.) Induced Differences - branding the #1 tool!

Branding the combination of names words, symbols or design that identifies the product and its source and distinguishes it from the competition physical and perceptual dimension

Benefits of Branding Distinguish the product and firm Brand Loyalty – % of consumers remaining loyal to one brand is declining Brand Concept Management (BCM) – Introduction – Fortification – Elaboration (Family Branding)

Product Packaging Five Considerations in Package Design Identification - visibility and legibility Product Protection and Convenience Consumer Appeal - color, size, material Economy - increases costs but offset with consumer demand changes

Advertising and Distribution Direct Distribution - Network Marketing Indirect Distribution - resellers and channel members to consider Three Primary Strategies – Intensive – Selective – Exclusive

Marketing Strategies Promotions – Promotions Mix – Co-op Strategies IMC – seek synergy – How to I utilize PR, Advertising, DM, Personal Selling, and Sales Promotion to maximize impact

Advertising Plan natural outgrowth of the marketing plan outline of the actions, approaches and tactics that will be used to meet advertising objectives often bounded by budgetary considerations

Advertising Pyramid Action Desire Conviction Comprehension Awareness

Advertising Objectives should support marketing objectives deal with awareness, recall, likeability, recognition, and sometimes - action!

Advertising Strategy our plan of action! utilizes the creative mix to mobilize the forces! target audience product concept communications media advertising message

Product Concept How will the ad present the product? In terms of: – Positioning – Differentiation – Life Cycle – Branding, packaging, classification – Thinking or feeling?

Creative Mix target audience - the people you want to speak to and address the message to – Primary and Secondary product concept - the bundle of values or benefits – may be psychological or utilitarian communications message – TV, radio, magazines, newspaper advertising message - combo of art and copy and production to form message

Media Planning Define Media Objectives – Reach, frequency, GRP, scheduling Profile audiences/readership Match the audiences to the TM Evaluate economics of TM vs. TA Negotiate purchases

Advertising Message Copy Elements – Advertising appeals Humor, fear, slice of life – Copy Platform – Key Consumer Benefits to be identified Art Elements – Visuals for packaging, ads, POP – Layout and Design

Advertising Budget Judgmental vs. Data Oriented Approach Consideration of PLC, Profit Objectives, Demand Sales to Advertising Relationship

Evaluation and Testing Advertising Research Pretest ads Test Concept Posttesting