Transcript MKT 201 Marketing Principles Prof. John Stockmyer
Market Segmentation, Targeting and Positioning
chapter 8
Ch. 8 Objectives
• •
Understand the concepts: market segmentation, and target marketing. positioning
•
Learn the advantages and disadvantages of target marketing
•
Discuss segmentation criteria, strategies, and seg. bases Understand typical positioning strategies
What is a market?
• Individuals or organizations who: – Are willing, able, and capable of purchasing a firm’s product – Segmentation is critical because demand is often heterogeneous
Market Segmentation/Targeting
• Market Segmentation is:
The process of dividing up the total market into distinct subsets of customers with common needs or characteristics
• Targeting is:
Selecting one or more segments that are appropriate
Target Marketing
• Advantages – Easier analysis of potential and actual consumers – Tailoring of products to market – Assessment of demand potential – Identify competing products – Increased sales effectiveness
Target Marketing
• Disadvantages – Increased marketing costs – More complex strategy to implement – Narrow segmentation can impact brand loyalty – Ethics and stereotyping issues – Can hinder a “Global” Brand Image – Faux segmentation may be viewed cynically • See Excedrin Migraine:
Market Criteria
• Segmentable markets are: – Heterogeneous – Measurable – Substantial – Actionable • Companies must be able to respond to preferences with an appropriate marketing mix – Accessible • Market must be efficiently reachable
Segmentation Variables
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Demographics
• Age • Income • Gender • Occupation • Education • Ethnicity • Family Life Cycle
Segmentation Variables
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Geographics
• By region of country • Micro-Beers do it • Campbell’s Soup does it • Frito-Lay does it:
Segmenting Consumer Markets
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Psychographic Segmentation
– Grouping customers together based on social class, lifestyles and psychological characteristics (attitudes, interests and opinions)
Segmenting Consumer Markets
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Benefits Sought
•
Find (or create) a key benefit that the product satisfies
• Toothpaste Example:
Segmenting Consumer Markets
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Situation Segmentation
• Time of Year / Week, Event etc.
Segmenting Consumer Markets
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Benefits-Sought Segmentation Situation Segmentation Behavior/Usage Segmentation
Behavior/Usage Segmentation
• Markets can be segmented by how often or how heavily consumers use a specific product – 80/20 Principle - 80% of revenue generated by 20% of customers Light Users 80% Heavy Users 20%
Behavior/Usage Segmentation
80/20 true for many products • For Beer it’s 88% to 16% • Who are the heavy users?
Product Positioning
How to Position Brands:
Positioning: •
“an image that a product projects in relation to competitive products and to the firm’s other products”
7 Ways to Position (differentiate) a product • Show MGD clip(s) • How is MGD differentiated?
1) Product Attribute
• It has something that others do not have • Whatever attributes seem important to consumers • Key attribute may in reality be bogus...
7 Ways to Position (differentiate) a product • Show Kia clip
2) By Competitor
• Show Similarity • Show Difference
7 Ways to Position (differentiate) a product
3) By Cultural Symbol (brand marks)
TV Ad.
7 Ways to Position (differentiate) a product
4) By Price / Quality
– Can be high or low (Generics)
5) By Product Class
– Different type of product/service, but provides the same or better benefits • Example: New AmTrak Acela service to NY
6) By Use or Application
Typically used to add uses of product and expands user base
7 Ways to Position (differentiate) a product
7) By Product User
• Product is positioned for a particular group of users • List some potential target markets for cellular phones:
Product Repositioning
• What is meant by Repositioning?
• Why might a company want to do it? (4X) • Know any products that have been repositioned?
Mountain Dew
(The most successful re-position in history) • What is MD’s current image/target market?
Mountain Dew
(The most successful re-position in history) • Remember MD’s initial positioning?
(1968-Early 1970’s)
Mountain Dew
(The most successful re-position in history)
Mountain Dew
(The most successful re-position in history)