Transcript Marketing Strategies
WEEK 06
SEGMENTATION, TARGETING & POSITIONING STRATEGIES
Chapter Aims
At the end of this chapter, students will be able to: 1. Judge the importance of the role of market segmentation 2. Define market segmentation 3. Describe the concept of a market segment 4. Evaluate the criteria for effective segmentation 5. Identify the bases for segmentation 6. Assess the finer segmentation strategies 7. Identify the major areas of analysis of market segments 8. Gain knowledge about market targeting strategy 9. Explain the meaning of positioning and understand the relationship between positioning concept and positioning strategy.
THE MARKETING STRATEGY PROCESS
1. Market segmentation
– the company identifies bases for segmenting a market – Forming a measurement for effective segmentation
2. Target marketing
– The company develops segment profiles of the selected segments – the company then selects target segments
3. Market positioning
– the company develops positioning for each target segments and then develops a marketing mix for each segment
Definition of Market, Market Segment & Market Segmentation
Definition of Market, Market Segment & Market Segmentation
A
market
is
people or organizations
with needs or wants and with the ability and the willingness to buy.
Definition of Market, Market Segment & Market Segmentation
A
market segment
is a
subgroup of people or organizations
sharing one or more characteristics that cause them to
have similar product needs.
Market Segmentation
Definition of Market, Market Segment & Market Segmentation Segmentation is the arts of segregating, dividing, separating and grouping our selected big market into a smaller size market that has at least one similar characteristic. The main objective is to ease the process of understanding the nature of the market and easily target the products with that particular market.
Market segmentation by age group Fully segmented market No market segmentation
Market Segmentation
Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Geographic Psychographic Demographic Behaviourial
Market Segmentation
Segmenting Consumer Markets
Geographic segmenting markets by region of a country or the world, market size, market density, or climate.
Market also can be segment using state, province and city Example: Johor Laksa Asam pedas Melaka Ipoh Hor Fun Penang Fried Kuey Teow Proton and Perodua cars exported to United Kingdom will have a different version of cars than that is offered in Malaysia.
Market Segmentation
Segmenting Consumer Markets
Demographic Divide whole market into small groups based on consumer characteristics such as by Age (Foods, health product, clothes) Gender (Magazine, clothes, cosmetics) Income (Car, house) Ethnic (Foods) Family-Life Cycle (Car, house, food)
Market Segmentation Segmenting Consumer Markets
Demographic
Age and life-cycle
Markets can be segmented based on age and life-cycle stage differences. Proton satria and Inspira are targeted to young drivers Anlene Milk Drink is targeted to senior citizen and late adult consumers Dutch Lady markets several brands and products of its formula milk targeted to different age segments.
Market Segmentation
Segmenting Consumer Markets
Demographic
Gender
Gender has long been used for segmenting markets for clothing, hair dressing products, cosmetics and magazines.
Men and women have different preferences for such products. “Wanita” magazines are meant for women, “Maskulin” magazines are meant for men.
Market Segmentation
Segmenting Consumer Markets
Demographic
Religion
In international market, it is extremely important for the marketers to understand the cultures and norms of a particular country in their promotional campaign.
Local sensitivity must be taken into account.
Kelantan has imposed a rule on female artists to wear the hijab when taking part in promotional activities.
Demographic
Market Segmentation Segmenting Consumer Markets Income
Income level influences consumers’ wants and determines their buying power. Income level indicates their purchasing power. BMW is targeted to high income consumers Proton is targeted to middle income and lower income consumer In a huge shopping complex, there are several types of shops targeting people from different income levels, such as a CK Boutique for high-income groups and Reject shop for the middle-income groups.
Market Segmentation
Segmenting Consumer Markets
Psychographic Divide a market into various groups such as Personality Social class Lifestyles Examples: KFC is targeted to consumers who nourish and appreciate family relationship Nescafe is targeted to consumers who have happy lifestyle
Market Segmentation Segmenting Consumer Markets
Psychographic
Personality
Personality reflects a person’s traits, attitudes, and habits. Product for car drivers that are thought to be • Nationalistic • Economical • Conservatives • Modern • High status • Sporty • Feminine • Masculine
Market Segmentation Segmenting Consumer Markets
Psychographic
Lifestyles
Lifestyle segmentation divides people into groups according to the way they spend their time, the importance of the things around them, their beliefs, and socioeconomic characteristics such as income and education. • • • • • •
Product for Single customers Product for Married customers with no children Product for Married customers with children Product for Newly married customers Product for Middle-aged married customers Product for Older-aged married customers
The new Satria Neo advertisement that seems to appeal to young and active people as well as to the trendsetters.
Market Segmentation Segmenting Consumer Markets
Behavioural Divides buyers into group according to their
knowledge, attitudes, response, and uses towards a product
based on several variables: Social occasions Value & benefit Consumption level user status brand loyalty
Toothpaste Product for customers that concerned about the clean white teeth, fresh breath and maximum protection against cavities (benefit segmentation).
Products for first time users, former users, potential users, medium users and heavy users (volume segmentation) Cigarettes for heavy smokers, moderate smokers, new smokers and quitting smokers Telecommunication services package for heavy caller, heavy SMS user.
Price charges on regular customers, members, and non members
Market Segmentation Segmenting Consumer Markets
Behaviouristic
Special Occasions
Divide the market into groups according to special occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.
Valentine’s Day and Mother’s Day are actually designed and promoted to increase the sale of flowers, cards, and other gifts.
Market Segmentation Segmenting Consumer Markets
Behaviouristic
Value & Benefit
value & Benefit segmentation is the process of grouping customers into market segments according to the benefits and value they seek from the product.
Huggies introduced Huggies Pull Ups Pants, a diaper designed to help mummies catch up with active and growing babies.
Behaviouristic
Market Segmentation Segmenting Consumer Markets Consumption Level
Consumption level segmentation divides a market by the amount of product bought or consumed. Such categories used to differentiate its consumers are former users, first time users, light or irregular users, medium users, and heavy users.
Behaviouristic
Market Segmentation Segmenting Consumer Markets User status
Markets can be segmented into non users, ex-users, potential users, first time users, and regular users.
A beauty centre : - needs to come up with an advertisement that appeals to be safe to potential users. - focuses on attracting current users from slipping away from their products and services.
Market Segmentation Segmenting Consumer Markets
Behaviouristic
Brand loyalty
Brand loyalty often is defined based solely on consumers' patterns of repeat purchase behavior.
“Rotators or soft-core” may stick to two or more brands.
In Indonesia, Unilever has received Indonesia Best Brand Award (IBBA) 2009 organized by SWA magazine and MARS marketing research institution for its variety of products.
The survey conducted by SWA and MARS also considers five aspects which also includes brand loyalty.
CRITERIA FOR EFFECTIVE SEGMENTATION
1
MEASURABLE
2
SUBSTANTIAL
3
ACTIONABLE
4
REACHABLE
5
DISTINGUISHABLE
6
REASONABLE
CRITERIA FOR EFFECTIVE SEGMENTATION
1
MEASURABLE
It should be possible to identify customer groups by measuring size and purchasing power of the segments. Data about the customers must be available to further target them.
2
SUBSTANTIAL
These market segments should be large and profitable enough to serve. Worth paying attention to, and being addressed to with a tailored marketing programs
CRITERIA FOR EFFECTIVE SEGMENTATION
3
ACTIONABLE
Effective marketing program can be designed to attract and serve these market segments. Too small and too big could bring trouble and ineffectiveness due to failure to implement the actions.
4
REACHABLE
It should be possible to effectively reach and serve market segments. If we fail to reach them or they failed to get us, the segmentation is not effective especially during the promotional activities.
CRITERIA FOR EFFECTIVE SEGMENTATION
5
DISTINGUISHABLE
The market segments are diverse and therefore, distinguishable.
They respond differently to different marketing actions 6
REASONABLE
Too small and too big segmentation is ineffective. Don’t be greedy to serve the big size segment. Don’t be too stingy to serve small segment because it will be not worthy.
Market Targeting
Targeting
is the
act of evaluating
and
comparing the identified segments
, and then
selecting
one or more of them as the
prospects
with the highest potential
Market Targeting
Evaluating the Target Market
Three factors must be considered:
segment size and growth segment competitiveness company objectives, goals and resources
Market Targeting
Selecting Target Market Segments
A
target market
consists of a
set of buyers who share common needs or characteristics that the company decides to serve.
Market Targeting
Target Market Strategy
Four basic categories of target marketing strategy are:
Non-differentiated marketing
Differentiated marketing
Focused & Concentrated marketing
Micro marketing
Market Targeting
Target Market Strategy Non / Undifferentiated marketing
A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.
Coca-Cola uses the appeal youthful fun in its global advertising. Its sponsorship programme is global and is adapted to events that are popular in specific countries such as soccer in other parts of the world versus football in the United States.
Market Targeting
Target Market Strategy Differentiated marketing
A market-coverage in which a firm decides to target several market segments and designs separate offers for each. Procter and Gamble markets six different laundry detergent brands, which compete with each other on supermarket shelves .
Market Targeting
Target Market Strategy Concentrated marketing
Offers smaller companies an opportunity to compete by focusing their limited resources on serving niches that may be unimportant to or overlooked by larger competitors.
In cosmetics, the Chanel and other cosmetic brands that target upscale prestige segment of the market have used this approach successfully.
Market Targeting
Target Market Strategy Micro marketing
Offers customisation and modification on products as well as the marketing mix strategies to cater the specific requirements of individual customers or segments.
Local marketing Change and modified the products according to the local needs like KFC, MC D One-to-one marketing The customization of products according to individual customers such as Dell but it is difficult and expensive.
Market Positioning
What is Market Positioning?
Market Positioning
What is Market Positioning?
Positioning
is
arranging for a product
to occupy a clear, distinctive, and desirable place relative to competing products
in the mind of target market consumer
.
Dynamo is positioned as an effective detergent in removing stubborn stains.
4 criteria to select positioning strategies
1.Recognize own product competitive edges (strengths) – product, service, reputation, people 2.Select most appealing edges (strengths) 3.Choose an overall positioning edges (strengths) 4.Communicate the positioning (IMC usage)
Market Positioning
Positioning Bases
A variety of bases for positioning are:
Click on each positioning base to know more.
A variety of bases for positioning are:
Market Positioning Positioning Bases
The product can be separated from its competitors based on attributes, features, or benefits.
Click on each positioning base to know more.
Market Positioning
Positioning Bases
A variety of bases for positioning are: The price and quality ladder is the most effective of all eight-attribute ladders.
Price Price Quality Quality Click on each positioning base to know more.
Market Positioning
Positioning Bases
A variety of bases for positioning are:
The product is marketed as when or how it can be used as a strategy to win an empty slot in the customers’ mind.
Click on each positioning base to know more.
Market Positioning
Positioning Bases
A variety of bases for positioning are:
This strategy indicates that the company clearly can identify and know the consumers and their needs.
Click on each positioning base to know more.
Market Positioning
Positioning Bases
A variety of bases for positioning are:
Click on each positioning base to know more.
The product class dissociation ladder implies that: a product or company can be positioned as superior to its competitors the product is so different compared to its competitors it almost not fit the same product category
Market Positioning
Positioning Bases
A variety of bases for positioning are:
This strategy indicates that the company clearly can identify and know the consumers and their needs.
Click on each positioning base to know more.
Market Positioning
Positioning Bases
A variety of bases for positioning are:
This strategy to position a product is done by positioning directly against or away from the competitors’ position.
Click on each positioning base to know more.
CONCLUSIONS
• This chapter recognizes the role of market segmentation in the development and implementation of market-driven strategy.
• We examine the concepts of market segmentation and market segment.
• We also discuss the issues that concern the segmenting of a market requiring us to identify the bases for segmentation, forming segments, describing each segment, and analyzing and evaluating the identified segment (s).
• We also learned about market targeting and positioning strategies.
List of References
Subash C. Jain (2004)
Marketing: Planning & Strategy
, 7th Edition, Thomson.
Boone, L., & Kurtz, D. (2009).
Contemporary Business.
Denvers: John Wiley & Sons, Inc.
Cravens, D.W. (2000), Strategic Marketing, 6th Edition, McGraw Hill.
Kotler P& Armstrong.G., (2004)
Principles of Marketing
, 10th edition, Pearson.
Kotabe, Masaki & Kristian Helsen (2001).
Global Marketing Management
2nd Edition John Wiley & Son. Inc New York.
List of References
Ebert, R., & Griffin, R. (2003).
Business Essential, 4th Edition.
Prentice Hall.
New Jersey: Ferrel, O., Hirt, G., & Ferrel, L. (2009).
Business: A Changing World.
New York: McGraw Hill.
khalid, K. e. (2008).
Business Management: A Malaysian Perspective.
Kuala Lumpur: Oxford University Press.
McDaniel, C., & Gitman, L. (2008).
The Future of Business.
South Western.(2008).
The Future of Business.
Ohio: Thomson Ohio: Thomson- South Western.
List of References
(n.d.). Retrieved April 13, 2009, from BuckInvestor.com: http://www.buckinvestor.com/basics/economic_systems.shtml
(n.d.). Retrieved April 13, 2009, from EconGuru Economics Guide: http://www.econguru.com/econ/production-factors.shtml
(n.d.). Retrieved April 13, 2009, from tutor2u: http://tutor2u.net/economics/gcse/revision_notes/basics_factors_of_production .htm
Boone, L., & Kurtz, D. (2009).
Contemporary Business.
Sons, Inc.
Denvers: John Wiley &