Presentation on theme: "Chapter Six Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers."— Presentation transcript:
1 Chapter SixSegmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers
2 4/17/2017Define the three steps of target marketing: market segmentation, market targeting, and market positioning.List and discuss the major bases for segmenting consumer and business markets.Explain how companies identify attractive market segments and choose a target marketing strategy.Discuss how companies position their products for maximum competitive advantage in the marketplace.Copyright 2007, Prentice Hall, Inc.Copyright 2005 Brainy Betty, Inc.
3 P & G – Segments the Market Case StudyP & G – Segments the MarketStrategySells multiple brands within the same product category for detergents, soaps, and other goods.Each brand features a different mix of benefits and appeals to a different segment.Product modifications appeal to different niches within certain segments.The PayoffP&G generates revenues in excessive of $4 billion in U.S. laundry detergent market alone.Tide has 34% share of powder and 24% share of liquid market segments.Combined, all P&G brands account for 75% share of powder and 55% share of liquid detergent markets.Copyright 2007, Prentice Hall, Inc.
4 Steps in Target Marketing Market segmentationDividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors requiring separate products or marketing mixes.Target marketingEvaluating each segment’s attractiveness and selecting one or more to enter.Market positioningSetting the competitive positioning for the product and creating a detailed marketing mix.Copyright 2007, Prentice Hall, Inc.
5 Market Segmentation Key variables: No single way to segment a market. GeographicDemographicPsychographicBehavioralNo single way to segment a market.May combine more than one variable to better define segments.Copyright 2007, Prentice Hall, Inc.
6 Market Segmentation Geographic: World region or country Region of countryCity or metro sizeDensity or climateCopyright 2007, Prentice Hall, Inc.
7 Market Segmentation Demographic: Age, gender, family size, family life cycle, income, occupation, education, race, religion, etc.The most popular bases for segmenting customer groups.Easier to measure than most other types of variables.Copyright 2007, Prentice Hall, Inc.
8 Market Segmentation Age and Life-Cycle Stage: Example: P&G has different toothpastes for different age groups.Avoid stereotypes in promotions.Promote positive messages.Copyright 2007, Prentice Hall, Inc.
9 Market Segmentation Income: Identifies and targets the affluent for luxury goods.People with low annual incomes can be a lucrative market.Some manufacturers have different grades of products for different markets.Copyright 2007, Prentice Hall, Inc.
10 Market Segmentation Psychographic: Social class Lifestyle Personality Copyright 2007, Prentice Hall, Inc.
11 Market Segmentation Behavioral: Occasion segmentation Special promotions and labels for holidays.(e.g., Hershey Kisses)Special products for special occasions.(e.g., Kodak disposable cameras)Copyright 2007, Prentice Hall, Inc.
12 Market Segmentation Behavioral: Benefits Sought Different segments desire different benefits from products.(e.g., P&G’s multiple brands of laundry detergents to satisfy different needs in the product category)Copyright 2007, Prentice Hall, Inc.
13 Market Segmentation Behavioral: User Status Nonusers, ex-users, potential users, first-time users, regular usersUsage RateLight, medium, heavyLoyalty StatusBrands, stores, companiesCopyright 2007, Prentice Hall, Inc.
14 Market SegmentationBest to use multiple approaches in order to identify smaller, better-defined target groups.Start with a single base and then expand to other bases.Geodemographic segmentation is becoming more common.Copyright 2007, Prentice Hall, Inc.
15 Market Segmentation Geodemographic: Claritas, Inc. Potential Rating Index for Zip Markets (PRIZM)Based on U.S. Census dataProfiles on 260,000 U.S. neighborhoods62 clusters or typesCopyright 2007, Prentice Hall, Inc.
16 Segmenting Business Markets Consumer and business markets use many of the same variables for segmentation.Business marketers can also use:Operating CharacteristicsPurchasing ApproachesSituational FactorsPersonal CharacteristicsCopyright 2007, Prentice Hall, Inc.
17 Segmenting International Markets Factors used:Geographic locationEconomic factorsPolitical and legal factorsCultural factorsIntermarket segmentation:Segments of consumers who have similar needs and buying behavior even though they are located in different countries.Copyright 2007, Prentice Hall, Inc.
18 Requirements for Effective Segmentation MeasurableAccessibleSubstantialDifferentiableActionableCopyright 2007, Prentice Hall, Inc.
19 Evaluating Market Segments Segment Size and GrowthAnalyze current segment sales, growth rates, and expected profitability.Segment Structural AttractivenessConsider competition, existence of substitute products, and the power of buyers and suppliers.Company Objectives and ResourcesExamine company skills & resources needed to succeed in that segment.Offer superior value and gain advantages over competitors.Copyright 2007, Prentice Hall, Inc.
20 Target Marketing Strategies Undifferentiated (mass) marketingIgnores segmentation opportunitiesDifferentiated (segmented) marketingTargets several segments and designs separate offers for eachConcentrated (niche) marketingTargets one or a couple small segmentsMicromarketing (local or individual marketing)Copyright 2007, Prentice Hall, Inc.
21 MicromarketingTailoring products and marketing programs to suit the tastes of specific individuals and locations.Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores.Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.Copyright 2007, Prentice Hall, Inc.
22 Choosing a Market Coverage Strategy Factors to consider:Company resourcesProduct variabilityProduct’s life-cycle stageMarket variabilityCompetitors’ marketing strategiesCopyright 2007, Prentice Hall, Inc.
23 Socially Responsible Targeting Smart targeting helps both companies and consumers.Target marketing sometimes generates controversy and concern.Vulnerable and disadvantaged can be targeted.Cereal, cigarette, beer, and fast-food marketers have received criticism.Internet has raised fresh concerns about potential targeting abuses.Copyright 2007, Prentice Hall, Inc.
24 Positioning for Competitive Advantage Product’s position is the way the product is defined by consumers on important attributes, or as the place the product occupies in consumers’ minds relative to competing products.Perceptual position maps can help define a brand’s position relative to competitors.Copyright 2007, Prentice Hall, Inc.
25 Choosing a Positioning Strategy Identify a set of possible competitive advantages on which to build a position.Choose the right competitive advantages.Select an overall positioning strategy.Copyright 2007, Prentice Hall, Inc.
26 Identifying Possible Competitive Advantages Key to winning target customers is to understand their needs better than competitors do and to deliver more value.Competitive advantage – extent to which a company can position itself as providing superior value.Achieved via differentiation.Copyright 2007, Prentice Hall, Inc.
27 Identifying Possible Competitive Advantages Product differentiationServices differentiationImage differentiationPeople differentiationCopyright 2007, Prentice Hall, Inc.
28 Positioning Errors Underpositioning: Overpositioning: Failing to really position the company at all.Overpositioning:Giving buyers too narrow a picture of the company.Confused Positioning:Leaving buyers with a confused image of a company.Copyright 2007, Prentice Hall, Inc.
29 Choosing Right Competitive Advantages ImportantDistinctiveSuperiorCommunicablePreemptiveAffordableProfitableCopyright 2007, Prentice Hall, Inc.
30 Overall Positioning Strategy Full positioning of the brand is called the brand’s value proposition.Potential value propositions include:More for MoreMore for the SameThe Same for LessLess for Much LessMore for LessCopyright 2007, Prentice Hall, Inc.
31 Communicating and Delivering the Chosen Position Company must take strong steps to deliver and communicate the desired position to target consumers.The marketing mix efforts must support the positioning strategy.Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.Copyright 2007, Prentice Hall, Inc.
32 4/17/2017Define the three steps of target marketing: market segmentation, market targeting, and market positioning.List and discuss the major bases for segmenting consumer and business markets.Explain how companies identify attractive market segments and choose a target marketing strategy.Discuss how companies position their products for maximum competitive advantage in the marketplace.Copyright 2007, Prentice Hall, Inc.Copyright 2005 Brainy Betty, Inc.