8 segmentation & target marketing dr. close. finding markets markets = people with needs/wants...
TRANSCRIPT
8Segmentation & Target
Marketing
Dr. Close
Finding Markets• Markets = people with needs/wants and
the ability and willingness to buy
• Types of markets:– Generic
• People with broadly similar needs (social)• Diverse ways of satisfying (restaurants, movies)
– Products• Very similar needs (thirsty for soft drinks)• Very close substitutes (Coke vs. Pepsi, and what
else?)
Close substitutes or no?
Pepsi vs Coke
What’s the Difference?
MarketMarket
MarketSegment
MarketSegment
MarketSegmentation
MarketSegmentation
People or organizations with needs or wants and the ability and willingness to buy.
People or organizations with needs or wants and the ability and willingness to buy.
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
Market Segmentation
• Dividing market into meaningful, similar groups
(or aggregating those with similar needs)• Why is segmentation important?....Why is segmentation important?....• Markets have a variety of product preferences• Marketers can better define customer needs• Decision makers can define objectives and
allocate resources more accurately
Criteria for Segmentation
Substantiality
Identifiabilityand Measurability
Accessibility
Responsiveness
Segment must be large enough to warrant a special marketing mix.
Segments must be identifiable and their size measurable.
Members of targeted segments must be reachable with marketing mix.
Unless segment responds to a marketing mix differently, no separate
treatment is needed.
So, A Good Segment is…
• Homogenous within: members are similar
• Heterogeneous between: outsiders differ (choose the best)
• Substantial: large enough for profit (Ned Flanders)
• Operational: workable (identify then access China)
Bases for Segmenting MarketsGeography Demographics Psychographics Benefits Usage Rate
• Region• Market size• Market
density• Climate
• Age• Gender• Income• Ethnicity• Family life
cycle
• Personality• Motives• Lifestyle• Geodemo-
graphics
• Benefitssought
• Former• Potential• 1st time• Light or
irregular• Medium• Heavy
Demographic Segmentation:Family Life Cycle
Psychographic Segmentation
• Personality (cars)
• Motives (emotions)
• Lifestyles (outdoor)
• Geodemographics (PRIZM)
Benefit Segmentation
• Group consumers via needs/wants (NOT by gender, age, lifestyle etc.)
• What do you want from your cell phone?
Usage Rate Segmentation
• Group by amount/rate of consumption
• Former apple users
• Potential apple users
• Light apple users
• Heavy apple users
• 80/20 principle of demand
6 Steps to Segment a Market
Select a market
for study
Choosebases
for segmen-
tation
Selectdescriptors
Profileand
analyzesegments
Selecttarget
markets
Design,implement,
maintainmarketing
mix
Strategies for Selecting Target Markets
Options…– Undifferentiated Targeting
• One market, one mix (plain toilet paper)• Any other examples?
– Concentrated Targeting• Multiple markets & mix for each• Examples include Ford, Lincoln, Mercury, and what else?
– Multi-segment Targeting• Multiple markets share mix (bad idea)• Advantages = Greater financial success; Economies of scale
Disadvantages= High costs; Cannibalization
Strategies for Selecting Target Markets
• Options– Undifferentiated Targeting
• One market, one mix (plain toilet paper)• Any other examples?
– Concentrated Targeting• Multiple markets & mix for each• Examples include Ford, Lincoln, Mercury, and what else?
– Multi-segment Targeting• Multiple markets share mix (bad idea)• Example: network television and any more?
One-to-One Marketing
Information-IntensiveInformation-Intensive
Long-TermLong-Term
One-to-OneMarketing is...One-to-One
Marketing is...
IndividualizedIndividualized Cost ReductionCost Reduction
Has a Goal of…Has a Goal of…
Customer LoyaltyCustomer Loyalty
Increased RevenueIncreased Revenue
PersonalizedPersonalized
Customer RetentionCustomer Retention
One-to-One Marketing
•One-size-fits all marketing is lame.•Direct/personal marketing will grow to meet needs of busy consumers.•We will be loyal to companies that have earned—and reinforced—our loyalty. •Mass-media approaches will decline as technology allows better customer tracking.
TrendsTrends
Marketing Strategy
• Matching opportunity with resources and business objectives
• Goals:1. SCA
• Enduring superiority of a business• BEST: from many parts (Wal-Mart)
2. Breakthrough opportunity• Conditions right for SCA
Positioning
Developing a marketing mix
to influence potential
customers’ overall
perception of a brand,
product line, or organization
in general.
How is Wal-Mart
Positioned?
AttributeAttribute
Price and QualityPrice and Quality
Use or ApplicationUse or Application
Product UserProduct User
Product ClassProduct Class
CompetitorCompetitor
EmotionEmotion
Positioning Bases
LO9 0.7%Fabric & skin safety on baby clothesIvory Snow0.1%Tough cleaner, aimed at Hispanic marketAriel
1.0%Cleaning for baby clothes, safeDreft1.2%Detergent and fabric softener in liquid formSolo1.4%Bleach-boosted formula, whiteningOxydol1.8%Value brandDash2.2%Stain treatment and stain removalEra2.6%Sunshine scent, odor-removing Gain2.9%Detergent plus fabric softenerBold8.2%Tough cleaning, color protectionCheer
31.1%Tough, powerful cleaningTide
MarketShare
PositioningBrand
Positioning of Procter & Gamble
Detergents
Effective Positioning
1. Assess the positions occupied by competing products
2. Determine the dimensions underlying these positions
3. Choose a market position where marketing efforts will have the greatest impact
Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
Are distinctions real or Are distinctions real or perceived?perceived?
Perceptual Mapping
Daimler Chrysler:Do they need a reposition?
(Changing consumers’ perceptions of a brand in relation to competing brands)
Summary
• Generic vs product markets
• Segmentation: Criteria
• Bases for segmenting
• Strategies of segmentation
• (effective)Positioning/repositioning, bases
• Any questions?