Segmenting, Targeting and Positioning

1. Segmenting, Targeting and Positioning

2. Identifying Market Segments and Targets

3. Mature consumers are a rapidly growing market

4. Effective Targeting Requires… • Identify and profile distinct groups of buyers who differ in their needs and preferences. • Select one or more market segments to enter. • Establish and communicate the distinctive benefits of the market offering.

5. Ford’s Model T Followed a Mass Market Approach

6. Four levels of Micromarketing Segments—similar Needs and wants Niches— sub-segments Local areas Individuals

7. Segment Marketing Targeting a group of customers who share a similar set of needs and wants.

8. Naked solution Product and service elements that all segment members value Discretionary options Some segment members value Options may carry additional charges Flexible Marketing Offerings

9. Basic Market Preference Patterns

10. Niche Marketers Enterprise Rent-a-Car targets the insurance- replacement market

11. The Experience Economy Experience Services Goods Commodity

12. Customerization Combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.

13. Segmenting Consumer Markets Geographic—nations, states, regions, countries, cities, neighborhoods Demographic—age, life-cycle stage, gender, income, generation, social class Psychographic—psychological/personality Behavioral--knowledge of, attitude toward, use of, or response to a product

14. Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

15. Toyota Scion targets Gen Y consumers

16. GI Generation—financial security 1901-1924 Silent Generation—trusting conformists who value stability 1925-1945 Baby Boomers—acquisitors, value and cause driven 1946-1964 Generation X—cynical, more alienated and individualistic 1965-1977 Generation Y—edgy, urban style, more idealistic than Gen X 1978-1994 Millenials—multicultural, tech savvy, educated, affluent society, big spending power 1995-2002 Profiling American Generations

17. Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions—time of day, week, month, year Benefits—the customer seek User Status—nonusers, ex-users, potential users, 1st time users, regular users Usage Rate—light, medium, heavy Buyer-Readiness—to buy a product Loyalty Status—hard core, split, shifting, switchers Attitude—enthusiastic, positive, indifferent, negative, hostile Behavioral Segmentation

18. Loyalty Status Hard-core 1 Split loyals 1-3 Shifting loyals >2 Switchers-no loyalty

19. Segmenting for Business Markets Demographic—industry, company size, location Operating Variable—technology, user or non-user status—heavy, medium, light, customer capabilities Purchasing Approaches functions, power structure, existing relationships, policies, criteria Situational Factors--urgency, specific applications, order size Personal Characteristics—buyer-seller similarity, attitudes toward risk, loyalty

20. Stage of decision First-time prospects Novices Sophisticates Orientation Price-oriented—low price Solution-oriented—benefits and advice Strategic-value—supplier investing and participating in the customer’s business Models of Sequential Segmentation

21. Patterns of Target Market Selection

22. Patterns of Target Market Selection

23. Patterns of Target Market Selection

24. Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable

25. Crating the Brand Position

26. Marketing Strategy Segmentation Targeting Positioning

27. Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.

28. Value Propositions • Perdue Chicken • More tender golden chicken at a moderate premium price • Domino’s • A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price

29. Positioning

30. Writing a Positioning Statement Mountain Dew: To young, active soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine.

31. 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 brand FedEx—guaranteed overnight delivery Nike—performance Lexus—quality Miller Lite Beer—one-third less calories Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands Category—travel agency must be able to make air and hotel reservations, etc. Competitive—Miller Lite beer—taste great Defining Associations

32. Conveying Category Membership Announcing category benefits- able to deliver on the fundamentals reason for using a category Comparing to exemplars- used category membership parity Relying on the product descriptor--communicate unique position

33. Consumer Desirability Criteria for PODs Relevance—POD personally relevant and important Distinctiveness superior (Splenda overtook Equal and Sweet ‘n Low Believability--credible

34. Deliverability Criteria for PODs Feasibility—must be able to create Communicability—consumers must be able to understand benefits Sustainability—preemptive and defensible positioning

35. Low-price vs. High quality Taste vs. Low calories Nutritious vs. Good tasting Powerful vs. Safe Strong vs. Refined Ubiquitous vs. Exclusive Varied vs. Simple Examples of Negatively Correlated Attributes and Benefits

36. Differentiation Strategies Product Personnel Channel Image

37. Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance Product Differentiation

38. Personnel Differentiation: Singapore Airlines

39. Image Differentiation

40. Identity and Image Identity: The way a company aims to identify or position itself Image: The way the public perceives the company or its products

41. Product Life Cycle

42. Facts about Life Cycles • Products have a limited life. • Product sales pass through distinct stages. • Profits rise and fall at different stages. • Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage.

43. Common PLC Patterns

44. Style, Fashion, and Fad Life Cycles

45. Marketing Program Modifications Prices Distribution Advertising Sales promotion Services

46. Product in Decline

47. Market Evolution Stages Emergence- Latent Growth Maturity Decline

48. Emerging Markets Latent Single-niche Multiple-niche Mass-market

49. Dealing with Competition

50. Five Forces Determining Segment Structural Attractiveness