Marketing Management

MGT 2306

Lesson 10

Lesson 10 Objectives

• Examine Segmentation, Targeting and positioning

• Be able to explain all the bases of segmentation, targeting and positioning

• Be able to manipulate the marketing mix according to the segmentation requirements

Market Segmentation, Targeting & Positioning

Definitions

What is market segmentation?

“dividing the total market for a product into distinct groups of buyers; each group has different needs, characteristics or behaviour market segment”

Why do firms segment the market?

• people have diverse needs, wants, buying behaviours & different lifestyles (kehendak yang pelbagaian)– one firm cannot satisfy everyone’s needs

• firm’s have different strengths (setiap pembekal mempunyai kelebihan dan kekurangan)– different areas of competitive advantage– firm should focus on who they can serve best

• segmenting can be a more profitable strategy, if segments have unique needs and people are prepared to pay for a differentiated offering.

Four main bases for segmenting consumer markets

DemographicDemographic

GeographicGeographic BehaviouralBehavioural

PsychographicPsychographic

Geographic Segmentation

• World region or country (Timur/barat, Benua, Pulau)

• State (Negeri)• Neighbourhood (Kejiranan)• Density (Kepadatan Penduduk)• Climate (Iklim / Cuaca)

Demographic Segmentation• gender (jantina)• age (umur)• family lifecycle/family size (keluarga)• income (pendapatan)• occupation (pekerjaan)• education (pendidikan)• religion (agama)• nationality (kerakyatan)

Food Diversity

Psychographic Segmentation

• social class• status• VALs - values,

attitudes, lifestyles (activities, opinions, interests)

• personality

Behavioural Segmentation• benefits sought • purchase occasion• user status (non, ex,

regular)• usage rate (heavy, medium,

light)• loyalty status• buyer readiness state• attitude toward the product

Okay, so we arrived at a number of segments? Which should be

considered?

Effective Segmentation

Requirementsfor

effectivesegmentation

Measurable

Substantial

Actionable Accessible

An effective market segment is...

• measurable – members can be identified – the size and purchasing power of

the segment can be measured• accessible

– they can be reached through media and distribution channels

– they can be effectively served• substantial

– they are large enough to be profitable

• actionable– a cost-effective marketing program can be

designed to attract and serve the segment• However, while a market segment may be an effective segment from an industry perspective, it may not be attractive to a particular firm.

Definition of Targeting

“The selection of a segment and developing marketing strategies that focus on meeting the needs of that particular segment of market”

Target marketing strategies

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

Companymarketing

mix

Companymarketing

mix

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

Companymarketing

mix

Companymarketing

mix

Company mix 1Company mix 1

Company mix 2Company mix 2

Company mix 3Company mix 3

MarketMarket

Undifferentiated marketing

Differentiated marketing

Concentrated marketing

• Undifferentiated marketing

- also known as mass marketing. The idea is to market the product to all possible people at all possible places with all possible promotions.

• Differentiated marketing- the firm develops different marketing strategies to market the same product to different segments of the market.

• Concentrated marketing

- also known as niche marketing. The firm focuses on meeting the needs of a selected segment only.

Differentiated Marketing Example

MILO 3-in-1LESS SUGAR

MILO FUZE MILO PROTOMALT

Concentrated marketing

What is Positioning?

• ...the way the product is defined by consumers on important attributes;

• the place the product occupies in consumers’ minds relative to competing products .

• perceptual mapping

Example

• Name the 1st, 2nd and 3rd positions in what you think is the best car in the world

• What about the best place to visit?• The best movie that you have seen?• The best book that you have read?

Positioning strategies may be based on

Against acompetitor

Against acompetitor

Usageoccasion

Usageoccasion

Away fromcompetitors

Away fromcompetitors

Productattributes

Productattributes

Productclass

Productclass

Benefitsoffered

Benefitsoffered

UsersUsers

Areas of competitive advantage

ProductProduct ServiceService

PersonnelPersonnel ImageImage

Areas for competitivedifferentiation

Areas for competitivedifferentiation

When you think of the following products and their names, what comes to your

mind?

• Mercedes Benz cars• Brands Essence of Chicken• Singapore Airlines• Ferrero Roche Chocolates• Apple Iphone