Transcript UNDERSTANDING the MARKET ENVIRONMENT: SEGMENTING, TARGETING

UNDERSTANDING
the
MARKET ENVIRONMENT:
SEGMENTING, TARGETING
and
POSITIONING
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China is an attractive target market for many
companies because of its huge population --- Kotler et
al.2006
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Segmentation : breaking
down of a diverse,
heterogeneous markets
STP
Positioning:
Act of
assigning &
representing
a brand
Target Segment:
Focus to sub
group
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1.Break the market into smaller,
more homogeneous segments
2.Specifically target the discrete
market segments
3.Position the product or service to
appeal to the targeted segments.
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Overview: Segmentation, Targeting & Positioning
Why do this?
The Value of STP Marketing. WHY??
• Precise Specification of Marketing Objectives
• Better Understanding of Needs and Motives of
Target Market
• Better Understanding of Customers and Non
customers
• More Efficient Allocation of Resources
• Ability to Assess Strengths and Weaknesses
• Ability to Identify Messages to be Used Across
All Promotional Tools
• Better IMC Management of Promotional Effort
• Ability to Respond More Quickly to Changes in
the Environment
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Beyond STP Marketing.
AFTER??
• STP Decisions are Continuously
Evolving Due to the Dynamic Nature
of Markets
• To Maintain the Profitability of
Brands, Segmentation Decisions
Must be Reassessed Regularly
• Product Differentiation Infuses STP
Decisions with Vitality
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Market Segmentation Principles
• Segmentation Variables
– Geographic
– Demographic
– Psychographic
– Behavioral
– Other (anything!)
• No single best way to segment a market.
• Often best to combine variables and identify smaller,
better-defined target groups.
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Demographic Segmentation
• Segmentation Based on Physical
Descriptors of Individuals
–Age
Are you a DINK?
–Gender
–Ethnic Background
What are
you?
–Education
–Marital Status
–Occupation
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Demographic Segmentation
• Use Differences in:
– age, gender, family size, family life cycle,
income, occupation, education, race, and
religion
– Most frequently used segmentation variable
• Ease of measurement and high availability.
– Usually the worst variable to use.
Brands in Common
Product Categories Can Be
Targeted to Audiences Based
on Ethnic Background
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4.6
What is the Basis for
Segmentation in this
Message?
4.7
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Geographic Segmentation
• Divide markets into different geographic
units.
• Examples:
– World Region or Country: North America, Western
Europe, European Union, Pacific Rim, Mexico, etc.
– Country Region: Pacific, Mountain, East Coast, etc.
– City or Metro Size: New York, San Francisco
– Population Density: rural, suburban, urban
– Climate: northern, southern, tropical, semi-tropical
–Climate & Topographical
Features
–Food Preferences & Preparation
Habits
–Entertainment Preferences
–Recreational Activities
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Behavioral Segmentation
• Occasion
– Special promotions &
labels for holidays.
– Special products for
special occasions.
• Benefits Sought
– Different segments
desire different
benefits from the
same products.
• Loyalty Status
– Nonusers, ex-users,
potential users, firsttime users, regular
users.
• Usage Rate
– Light, medium, heavy.
Loyalty Status Segmentation
Hard-core
Split loyals
Shifting loyals
Switchers
WHO you are?
WHAT you buy?
Do you need to spend > $ RM?
HOW you use?
• Usage Patterns & Commitment Levels
– Heavy Users
– Nonusers
e.g. nonsmokers
– Brand Loyal Users
Difficult to convert
– Switchers or Variety Seekers
First time buyer
– Emergent Customers
• Psychographic & Lifestyle Segmentation
– AIO’s
Target segment identified
• Benefit Segmentation
by various benefit packages
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Psychographic Segmentation
Psychographic segmentation
divides a market into
different groups based on
social class, lifestyle, or
personality characteristics.
People in the same demographic classification
often have very different lifestyles and personalities.
Psychographics and
Lifestyle segmentation
AOI
Lifestyles segmentation
provides insight into
consumer’s motivations.
e.g. Honda --Prestige?,
Passenger Safety?
Fuel Economy?
Club Med, Bintan,
Banyan Tree, etc
Benefit Segmentation
Divide market based on
different benefits that
consumer seeks.
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A Classic Example of
Benefit Segmentation
4.10
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Positioning
The place a product occupies in consumers’
minds relative to competing products.
Positioning Example
eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!
Positioning Example
To (target segment and need) our (brand) is a
(concept) that (point-of-difference).
“To busy mobile professionals who need to
always be in the loop, Blackberry is a wireless
connectivity solution that allows you to stay
connected to people and resources while on
the go more easily and reliably than the
competing technologies.”
Formulating a Positioning Strategy
for a Brand
ESSENTIALS OF EFFECTIVE BRAND POSITIONING
STRATEGIES
• Substantive Value
• Consistency
• Simplicity & Distinctiveness
FUNDAMENTAL BRAND POSITIONING THEMES
• Benefit Positioning
• User Positioning
• Competitive Positioning
REPOSITIONING BRANDS
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