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MARKETING PRINCIPLES

Market segmentation & targeting lecture 2

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Page 1: Market segmentation & targeting  lecture 2

MARKETING PRINCIPLES

Page 2: Market segmentation & targeting  lecture 2

All of this issues need a marketing plan to overcome the threats & get their objectives &

goals

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Rev. profit

Organization

Feedback

Competition

Strategic goals

Segmentation &

targeting

Positioning &

differentiation

Value proposition

promotion

place

price

product

B R A N D

C U S T O M E R

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THE MOST IMPORTANT DEFINITIONS

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SEGMENTATION Is Subdividing Of Market Into Homogeneous Sub Set Of Customers Where Any Subset May Be Selected As Marketing Target

TARGETING a well-defined set of customers whose needs the organization plans to satisfy

POSITIONING Is the act of designing the company's image to occupy a distinctive place in the target market's mind

THE MOST IMPORTANT DEFINITIONS How do we define it ?

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Identify

bases for

segmenting

the market

Develop

segment

profile

Develop

measures of

segment

attractivenes

s

Select the

target

market

Develop

positioning

for target

segments

Develop a

marketing

mix for each

segment

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There is a lot of definitions to the

market segmentation

Market segmentation involves the subdividing of a market into distinct subgroups of customers, where any subgroup can be selected as a target market

Market Segmentation is the marketing process of identifying and breaking up the total market into groups of potential customers with similar motivations, needs or characteristics, who are likely to exhibit homogeneous purchase behaviour. Undertaking this process allows marketing efforts to be targeted at select groups.

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creaminess

sweetness

creaminess

sweetness

creaminess

sweetness

C - Clustered Preference -natural segments -increases as number of competitors increases

A - Homogeneous Preference -no natural segments -all buyers have same preference

B - Diffused Preference -no pattern (…or poor research) -take center position

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Why market segmentation

????

To develop marketing activities Increase marketing effectiveness Generate greater customer satisfaction Create savings To identify strategic opportunities and niches Allocation of marketing budget Adjustment of product to the market need To estimate the level of sales in the market To overcome competition effectively To develop effective marketing programmes To contribute towards achieving company goals

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• 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

Key Topics

Market Segmentation

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Market Segmentation

Geographic Segmentation Variables

City or Metro Size Density Climate

World Region or Country Country Region City

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• 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

Key Topics

Market Segmentation

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Demographic Segmentation Variables

• Age • Gender • Family size • Family life cycle • Income

Occupation Education Religion Nationality

Market Segmentation

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7- 17

• 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

Key Topics

Market Segmentation

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• Segmenting Consumer Markets

• Segmenting Business Markets

• Segmenting International Markets

• Requirements for Effective Segmentation

• Geographic segments • Demographic

segmentation • Psychographic

segmentation • Behavioral segmentation

– Based on knowledge, attitude, use or response to a product

– Typically done first

• Using multiple segmentation variables

Key Topics

Market Segmentation

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Behavioral Segmentation Variables

• Occasions: According to occasions buyer get the idea to buy or use the purchased item.

• Benefits sought: According to different benefits consumers seek from the product.

• User Status: Nonusers, ex-users, potential users, first-time users & regular users.

• User Rates: Light, medium & heavy product users.

• Loyalty Status: Loyalty to brands, stores & companies can be a base. Consumers can be somewhat loyal & completely loyal

Market Segmentation

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• 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

Key Topics

Market Segmentation

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7- 21

• 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

Key Topics

Market Segmentation

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• Segmenting Consumer Markets

• Segmenting Business Markets

• Segmenting International Markets

• Requirements for Effective Segmentation

• Geographic segmentation – Location or region

• Economic factors – Population income or level

of economic development

• Political and legal factors – Type / stability of

government, etc.

• Cultural factors – Language, religion, values,

attitudes, customs, behavioral patterns

Key Topics

Market Segmentation

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• 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

Key Topics

Market Segmentation

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– Consists of a set of buyers who share common needs or characteristics that the company decides to serve.

– The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond

Target Market

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Criteria for Targeting: 9 W’s

• Who buys our product? • Who does not buy it? • What need or function does it serve? • What are customers buying to satisfy the

need for which our product is targeted? • What price are they paying? • When is the product purchased? • Where is it purchased? • Why is it purchased?

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FACTORS CONSIDERED IMPORTANT IN THE SELECTION OF TARGET MARKET STRATEGY

• 1. Company’s Resources • 2. Product Homogeneity • 3. Product Stage in the Life Cycle • 4. Market Homogeneity • 5. Competitive Marketing Strategy

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• Target Marketing Strategies

Five basic strategies for target market selection:

• (1) Single Segment Targeting • (2) Selective Targeting • (3) Mass Market Targeting • (4) Product Specialization • (5) Market Specialization

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• Basic Target Marketing Strategies

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Strategies of Target Marketing

• Undifferentiated (mass) Marketing

• Differentiated (segmented) Marketing

• Concentrated (niche) Marketing

• Micromarketing (local or individual marketing)

• Ignoring market segments differences & make one offer to whole market

• Target several segments & designs offer for each

• Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium

• Tailoring to the needs & wants of the locals or individuals

Key Topics

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Our

project

Page 37: Market segmentation & targeting  lecture 2

Diclofenac

Na

Azithromycin

Rantidine Amoxicyillin

Antilice

shampoo Body

lotion

Page 38: Market segmentation & targeting  lecture 2

THANK YOU! FOR YOUR ATTENTION