Segmentation, Targeting and Positioning

1. Segmentation, Targeting and Positioning Chapter 7

2. Designing a Customer-Driven Marketing Strategy Designing a customer-driven marketing strategy:

3. product- market narrow market product- market narrow market Finding Market Opportunities “needs” all customers have mobility similar needs dissimilar products human transport generic markets product- market product- market similar needs similar products bikes | cars | trucks increasingly- homogeneous “needs” job | recreation

4. exercisers transportation riders socializers off-road adventurers product- market product- market environmentalists Finding Market Opportunities disaggregating “needs” all customers have generic markets narrow market narrow market

5. Finding Market Opportunities disaggregating re-aggregating status dependability

6. How To Segment dimensions • qualifying • determining • product • brand “desires” customer “features” “benefits” product “features” “benefits” brand “features” specific unpredictable changeable

7. strength of relationship place in value chain retailer wholesaler manufacturer industrial sector government military school business big small buying decision single-person? single-influence? single decision decentralized? po? sample first? Segmenting Dimensions and a few more

8. Newer Techniques • data mining • http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm • CRM (Customer Relationship Management) • http://www.maximizer.com/ • shopping behaviour analysis • http://www.sbxl.com/

9. Market Segmentation • Segmentation: • Dividing a market into groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes • Key consumer variables: • Geographic • Demographic • Psychographic • Behavioral

10. Market Segmentation Geographic Demographic Age and Life Cycle Gender Household Income Ethnic or Cultural Psychographic

11. Market Segmentation • Behavioral segmentation • Use multiple segmentation bases to identify smaller, better-defined target groups • Start with a single base and then expand to other bases • Multivariable segmentation systems such as PRIZM NE (New Evolution) are becoming more common

12. Segmenting International Markets • Factors used: • Geographic location • Economic factors • Political and legal factors • Cultural factors • Intermarket segmentation: • Segmenting consumers who have similar needs and buying behavior even though they are located in different countries

13. Effective Segmentation • To be useful, market segments must be: • Measurable • Accessible • Substantial • Differentiable • Actionable

14. Market Targeting • Market targeting involves: • Evaluating marketing segments • Consider segment size and growth, segment structural attractiveness, and company objectives and resources • Selecting target market segments • Alternatives range from undifferentiated marketing to micromarketing • Being socially responsible

15. Selecting Target Market Segments • Targeting strategies include: • Undifferentiated (mass) marketing • Differentiated (segmented) marketing • Concentrated (niche) marketing • Micromarketing (local or individual marketing)

16. Choosing a Targeting Strategy • Factors to consider: • Company resources • Product variability • Product’s life-cycle stage • Market variability • Competitors’ marketing strategies

17. Ethical Issues in Targeting exploitation “desires” • needs • wants • cravings harm • emotional • financial • other?

18. Differentiation and Positioning • Product’s position: • Important attributes defined by consumers • The place the product occupies in consumers’ minds relative to competing products

19. High moisturizing 7 4 2 5 8 nondeodorant deodorant 3 1 6 low moisturizing Positioning Jergens Zest Olay Dove Safeguard Coast Lux Dial Lifebuoy Ivory

20. Differentiation and Positioning • Competitive advantage: • gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices

21. Differentiation and Positioning • Identifying possible value differences and competitive advantages: • Key to winning - understand their needs better than competitors do and to deliver more value • Examine the entire customer experience

22. Differentiation and Positioning • Types of differentiation: • Product: Features, performance, style, design • Services: Speedy, convenient or careful delivery • Channels: Coverage, expertise, performance • People: Training staff better than the competitors • Image: Convey distinctive benefits and positioning

23. Differentiation and Positioning • Worthwhile differences to promote: • Important • Distinctive • Superior • Communicable • Preemptive • Affordable • Profitable

24. Differentiation and Positioning Possible value propositions:

25. Differentiation and Positioning • Developing a positioning statement: • Format: “To (target segment and need) our (brand) is (a concept) that (point of difference).” • Example: “To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go.”

26. Communicating and Delivering the Position • All marketing-mix efforts must support the positioning strategy • Companies must monitor and adapt the position over time • Required to match changes in consumer needs and competitors’ strategies