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Chapter 6Segmentation, Targeting and PositioningREVIEWInstructor Shan Garib
LO 2 Forms of Market Segmentation • Mass marketing • Segment marketing • Niche marketing • Individualized marketing 2
LO 2 Mass Marketing • Rarely seen today • Competitiveness of the market • Need to specifically address consumer needs
LO 2 Segment Marketing • Most common form of segmentation followed by large companies • Meeting the needs of target groups (chosen segments) with specific products and marketing programs 4
LO 2 Niche Marketing • Concentrate on a smaller area to be successful • Kashi targets ‘health enthusiasts’ 5
LO 2 Individualized Marketing • Through the use of sophisticated tracking and statistical models, behaviour is predicted • Individual offers are developed • Product selection and products can be customized
LO 3 10 Steps in Market Segmentation 7
LO 3 Step 1: Review Company Objectives • Review strategic company objectives • Clear • Quantifiable
LO 3 Step 2: Identify objectives Identify specific business unit objectives.
LO 3 Step 3: Identify Consumer Needs • Identify consumer/customer needs and common characteristics in the market. Common Interests Evolving Trends Consumer Perspective Market Shifts Consideration of Other Countries 10
LO 3 Step 4: Cluster Common Consumer Variables • Cluster common consumer/customer variables to create meaningful market segments. • Clusters = Segments in the market • Very important: Review clusters from a consumer perspective • Cereal: High fibre vs. health conscious 11
LO 3 Step 4: Cluster Common Consumer Variables 12
LO 3 Step 5: Conduct a SWOT Analysis • Conduct SWOT analyses on the segments to determine strengths, weaknesses, opportunities, and threats. Opportunities and the ability of the company to compete SWOT 13
LO 3 Step 6: Identify Best Segment • Identify the segment that best meets strategic company objectives. • Opportunities and threats relative to company objectives • Uncovers opportunity segments
LO 3 Step 7: Marketing Programs & Budget • Identify marketing programs and budget requirements needed for this segment. • Recommended marketing program • Full financial evaluation
LO 3 Step 8: Sales Forecast • Create a sales forecast for this segment. • Estimated sales potential 16
LO 3 Step 9: Profit and Loss Analysis • Conduct a profit-and-loss financial analysis for this segment. • Determination of the financial viability • Ability to make a rational decision 17
LO 3 10. Measure • Check financial forecasts against specific business unit objectives.
LO 4 Target Market Profiles • Created by considering: • Geographics • Demographics • Psychographics • Behaviouristics
LO 4 Target Market Profiles Figure 6-3 Segmentation variables and breakdowns for Canadian consumer markets
LO 5 Product Positioning • Product image • Target audience’s mind • Relative to competition • Positioning statements include: • Product name • Category in which product competes • Why target buys the product • What sets product apart • “simple, clear and focused”
LO 5 Positioning Maps
LO 5 Positioning Maps • Also known as Perceptual Maps • Two most important attributes of your product that drive target group purchases in the category • Maps result in a visualization of opportunities and threats In Practice: Positioning drives the coordination of the marketing mix to meet targets’ expectations