Presentation on theme: "Definition Market Segmentation:"— Presentation transcript:
0 Targeting 7 Segmentation Positioning Target marketing: Dividing the total market into different segments based on customer characteristics, selecting one or more segments, and developing products to meet those segments’ needs7
1 Definition Market Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.
2 Steps in Market Segmentation, Targeting, and Positioning
3 Market Segmentation Key Topics Segmenting Consumer Markets Geographic segmentsDemographic segmentationPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
4 Market Segmentation Key Topics Segmenting Consumer Markets Geographical segmentationMarketing mixes are customized geographicallyDemographic segmentationPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
5 Geographic Segmentation Variables Market SegmentationGeographic Segmentation VariablesCity or Metro SizeNeighborhoodDensityClimateWorld Region or CountryCountry RegionCity
6 Market Segmentation Key Topics Segmenting Consumer Markets Geographical segmentsDemographic segmentationMost popular typeDemographics are closely related to needs, wants and usage ratesPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
11 Market Segmentation Key Topics Segmenting Consumer Markets Demographic segmentationIndustry, company size, locationOperating variablesTechnology, usage status, customer capabilitiesPurchasing approachesSituational factorsUrgency, specific application, size of orderPersonal characteristicsBuyer-seller similarity, attitudes toward risk, loyaltySegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
12 Market Segmentation Key Topics Segmenting Consumer Markets Geographic segmentationLocation or regionEconomic factorsPopulation income or level of economic developmentPolitical and legal factorsType / stability of government, monetary regulations, amount of bureaucracy, etc.Cultural factorsLanguage, religion, values, attitudes, customs, behavioral patternsSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
13 Market Segmentation Key Topics Segmenting Consumer Markets MeasurableSize, purchasing power, and profile of segmentAccessibleCan be reached and servedSubstantialLarge and profitable enough to serveDifferentiableRespond differentlyActionableEffective programs can be developedSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
14 Target Marketing Evaluating Market Segments Segment size and growth Segment structural attractivenessLevel of competitionSubstitute productsPower of buyersPowerful suppliersCompany objectives and resources
16 Segmentation strategies MARKETING MIXAll buyers in1 segmentAn undifferentiated strategy is one that essentially avoids segmentation, appealing to a wide-spectrum of people. Products such as anti-freeze or candy bars use this type of approach.Undifferentiated
17 Differentiated MARKETING MIX 3 MARKETING MIX 1 MARKETING MIX 2 Segment 1Segment 2Segment 3A company that chooses a differentiated strategy develops separate marketing programs for several segments of the market. This is a costly approach that is usually reserved for larger firms such as Nike, Toyota, or GE.Differentiated marketing targets several different market segments and designs separate offers for each.Segment 4Differentiated
18 Concentrated/Micromarketing MARKETING MIXSegment 1When a firm focuses its efforts on offering one or more products to a single segment, it is using a concentrated strategy. A concentrated strategy is often useful for smaller firms that do not have the resources or the desire to be all things to all people.Concentrated/Micromarketing
19 Target MarketingChoosing a Target- Marketing Strategy Requires Consideration of:Company resourcesThe degree of product variabilityProduct’s life-cycle stageMarket variabilityCompetitors’ marketing strategies
20 Positioning Positioning: The place the product occupies in consumers’ minds relative to competing products.Typically defined by consumers on the basis of important attributes.
21 Positioning MapPositioning maps show consumer perceptions of their brands versus competing products on important buying dimensions
22 Positioning Choosing a Positioning Strategy: Identifying possible competitive advantages -- many potential sources of differentiation exist:ProductsServicesChannelsPeopleImage
23 Choosing a positioning Strategy IDENTIFY COMPETITIVE ADVANTAGESCHOOSE RIGHT COMPETITIVE ADVANTAGEThe differentiation and positioning task consists of three steps:Identifying a set of differentiating competitive advantages upon which to build a position,Choosing the right competitive advantages, andSelecting an overall positioning strategy.SELECT POSITIONING STRATEGY
24 Competitive advantage To the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage.
25 Differentiation based on: PRODUCTDISTRIBUTIONSERVICESPEOPLEIMAGEIdentifying a set of possible competitive advantages to build a position by providing superior value from:
26 Positioning Choosing a Positioning Strategy: Choosing the right competitive advantageHow many differences to promote?Unique selling propositionPositioning errors to avoidWhich differences to promote?
27 Difference to promote should be: DISTINCTIVEIMPORTANTSUPERIORCOMMUNICABLEPREEMPTIVEAFFORDABLEImportant: The difference delivers a highly valued benefit to target buyers.Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way.Superior: The difference is superior to other ways that customers might obtain the same benefit.Communicable: The difference is communicable and visible to buyers.Preemptive: Competitors cannot easily copy the difference.Affordable: Buyers can afford to pay for the difference.Profitable: The company can introduce the difference profitably.PROFITABLE
28 Defining Associations Points-of-difference (PODs)Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brandPoints-of-parity(POPs)Associations that are not necessarily unique to the brand but may be shared with other brands
29 Consumer Desirability Criteria for PODs RelevanceDistinctivenessBelievability
30 Deliverability Criteria for PODs FeasibilityCommunicabilitySustainability
31 Positioning Choosing a Positioning Strategy: Communicating and delivering the chosen positionEntire marketing mix must support the chosen strategyMay require changes to the product, pricing, distribution or promotion.