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Segmentation Targeting Positioning 7 Definition Market Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes. 7- 1 Steps in Market Segmentation, Targeting, and Positioning 7- 2 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Geographic segments Demographic segmentation Psychographic segmentation Behavioral segmentation Using multiple segmentation variables 7- 3 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Geographical segmentation Marketing mixes are customized geographically Demographic segmentation Psychographic segmentation Behavioral segmentation Using multiple segmentation variables 7- 4 Market Segmentation Geographic Segmentation Variables World Region or Country Country Region City City or Metro Size Neighborhood Density Climate 7- 5 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Geographical segments Demographic segmentation Most popular type Demographics are closely related to needs, wants and usage rates Psychographic segmentation Behavioral segmentation Using multiple segmentation variables 7- 6 Market Segmentation Demographic Segmentation Variables Age Gender Family size Family life cycle Income Ethnicity Occupation Education Religion Generation Nationality 7- 7 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Geographic segments Demographic segmentation Psychographic segmentation Lifestyle, social class, and personality-based segmentation Behavioral segmentation Using multiple segmentation variables 7- 8 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Geographic segments Demographic segmentation Psychographic segmentation Behavioral segmentation Typically done first Using multiple segmentation variables 7- 9 Market Segmentation Behavioral Segmentation Variables Occasions Benefits User Status User Rates Loyalty Status Readiness Stage Attitude Toward the Product 7- 10 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Demographic segmentation Industry, company size, location Operating variables Technology, usage status, customer capabilities Purchasing approaches Situational factors Urgency, specific application, size of order Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty 7- 11 Market Segmentation Key Topics Geographic segmentation Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Economic factors Requirements for Effective Segmentation Location or region Population income or level of economic development Political and legal factors Type / stability of government, monetary regulations, amount of bureaucracy, etc. Cultural factors Language, religion, values, attitudes, customs, behavioral patterns 7- 12 Market Segmentation Key Topics Segmenting Consumer Markets Segmenting Business Markets Segmenting International Markets Requirements for Effective Segmentation Measurable Size, purchasing power, and profile of segment Accessible Can be reached and served Substantial Large and profitable enough to serve Differentiable Respond differently Actionable Effective programs can be developed 7- 13 Target Marketing Evaluating Market Segments Segment size and growth Segment structural attractiveness Level of competition Substitute products Power of buyers Powerful suppliers Company objectives and resources 7- 14 Target Marketing Strategies 7- 15 Segmentation strategies MARKETING MIX Undifferentiated All buyers in 1 segment MARKETING MIX 1 Segment 1 MARKETING MIX 2 Segment 2 MARKETING MIX 3 Segment 3 MARKETING MIX 4 Segment 4 Differentiated MARKETING MIX Segment 1 Concentrated/Micromarketing Target Marketing Choosing a TargetMarketing Strategy Requires Consideration of: Company resources The degree of product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies 7- 19 Positioning Positioning: The place the product occupies in consumers’ minds relative to competing products. Typically defined by consumers on the basis of important attributes. 7- 20 Positioning Map Positioning Choosing a Positioning Strategy: Identifying possible competitive advantages -- many potential sources of differentiation exist: Products Services Channels People Image 7- 22 Choosing a positioning Strategy IDENTIFY COMPETITIVE ADVANTAGES CHOOSE RIGHT COMPETITIVE ADVANTAGE SELECT POSITIONING STRATEGY Competitive advantage Differentiation based on: PRODUCT SERVICES DISTRIBUTION PEOPLE IMAGE Positioning Choosing a Positioning Strategy: Choosing the right competitive advantage How many differences to promote? • Unique selling proposition • Positioning errors to avoid Which differences to promote? 7- 26 Difference IMPORTANT to promote should be: DISTINCTIVE SUPERIOR COMMUNICABLE PREEMPTIVE AFFORDABLE PROFITABLE Defining Associations 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 Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands 7-21 Consumer Desirability Criteria for PODs Relevance Distinctiveness Believability 7-29 Deliverability Criteria for PODs Feasibility Communicability Sustainability 7-30 Positioning Choosing a Positioning Strategy: Communicating and delivering the chosen position Entire marketing mix must support the chosen strategy May require changes to the product, pricing, distribution or promotion. 7- 31