18226982 6 Segmentation Tarketing Positioning for Competitive Advantage Copy

8/14/2019 18226982 6 Segmentation Tarketing Positioning for Competitive Advantage Copy

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Segmentation, Targeting & Positioning for Competitive Advantage

Nathan George, M.S., J.D.1


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Marketing Process Involves

Market orientation as philosophy Market segmentation Targeting market PositioningMarketing mix3


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Marketing Strategy Select base for segmentation and identify appropriate market segments.Evaluate and appraise the market segments resulting from the first step. Select anoverall market targeting strategy and specific target segments. Tailoring adistinct position in selected markets Developing marketing mixes that servedesired positioning strategy in the marketplace Auditing marketing environmentsand efforts

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Importance of Segmentation and Targeting

The focus of a successful marketing program is the customer. Effectivelymarketing must fully understand the needs. Customers with decent life andindividualism have Heterogeneous demands, This has given rise to need segmenting. The process of understanding the customer and choosing a group of customer youcan serve best is targeting. So target a segmentation is core of the marketingprocess.

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Identify the Total MarketIdentify Total Market Effective Segmentation Bases for SegmentationSelect Target Segment

Positioning StrategyMarketing Mix

Monitor, Evaluate and Control Objective 3

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Identify the Total Market

The first step in the target market selection process is to specifically definethe total market of all potential customers for a product category.

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Segmentation and EffectivenessIdentify Total Market

EffectiveSegmentation Bases for SegmentationSelect Target Segment

Positioning Strategy

Marketing Mix


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Segmentation Segmenting means dividing a heterogeneous demanding markets into homogenousgroups based on similar characteristics or traits Heterogeneous demand- differentgroups of customers have differing needs from specific products. Homogeneoussegment- the separation of markets into distinctive groups based on homogeneouscharacteristics.9


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Criteria for successful segmentation

ti Distinc

ve

Clear differences in consumer preferences for a product must exist.

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Criteria for successful segmentationDifference preferences for a product must be identifiable and capable of beingrelated to measurable variables.12

Me a Ide sura b nti fiab le le


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Criteria for successful segmentation

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nti sta

al

The proposed market segment must have enough size and purchasing power to beprofitable.13


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Criteria for successful segmentationCompanies must be able to respond to difference preferences with an appropriatemarketing mix.

Act io

nab

le

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Criteria for successful segmentationThe proposed market segment must be readily accessible and reachable with marketprograms.

Acc ess ib

le

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Determine Bases for SegmentationIdentify Total Market

Effective SegmentationBases for SegmentationSelect Target Segment


Marketing Mix


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Segmentation Base

Demographic Segmentation Geographic SegmentationPsychographic

Benefits-Sought

Segmentation Situation Segmentation

Behavior/Usage

Segmentation

Segmentation18


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Segmentation Base

Life-cycle

Income Level Social class

Education

Ethnic19


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Segmentation Base


Benefits-Sought


Behavior/Usage

Segmentation

Segmentation20


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Segmentation Base Localizes its marketing efforts to specific geographic regions

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Segmentation Base


Benefits-Sought


Behavior/Usage

Segmentation

Segmentation22


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Segmentation Base

Grouping customers together based on social class, lifestyles and psychologicalcharacteristics (attitudes, interests and opinions) Useful but more difficult to identify and measure compared to demographicvariables23


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Segmentation Base


Benefits-Sought


Behavior/Usage

Segmentation

Segmentation24


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Segmentation Base

Markets can be segmented based on the benefits that consumers desire from usinga specific product

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Segmentation Base


Benefits-Sought


Behavior/Usage

Segmentation

Segmentation26


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Segmentation Base

Purchase situation or occasion Physical surroundings Social surroundings Temporal perspective

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Segmentation Base


Benefits-Sought


Behavior/Usage

Segmentation

Segmentation28


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Segmentation Base

Information for segmenting markets may be obtained from database such as Census,State Statistics, ACORN

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Segmenting Business Markets While the steps in the target market selection process are essentially the samefor business markets, there are three major differences: The purchasing process,which differs greatly from the household consumer market. The use of differentsegment variables Standard Industrial classification is often employed31


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Select Segments for TargetingIdentify Total Market Determine Need for Segmentation Determine Bases forSegmentationSelect Target Segment



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Targeting Targeting: choose the specific segment toward which a firm directs its marketefforts. Niche Marketing: the process of targeting a small market segment with aspecific, specialized marketing mix. Micromarketing- the process of targetingsmaller, more narrowly defined market segments. On the individual consumer end ofthe continuum, a firm may decide to target individual consumers and personalizemarketing efforts 34


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Target the Mass Market versus the Individual ConsumerMass Market Niche Micromarketing The Individual

entation Size Market Segm f Continuum o PersonalStandardized Marketing Mix

Niche

Micromarketing

ization35


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Advantage of Targeting Efforts Cannot effectively serve all the segments, must target marketing efforts to asegment or segments. Marketing opportunities and unfilled gaps are moreaccurately identified Marketing mix is created strategically to meet potentialcustomers needs Offers the greatest potential to achieve profit or relationshipgoals36


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Targeting Strategy

1.Undifferentiated marketing 2.Differentiated marketing 3.Concentrated marketing4.Custom marketing

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Targeting StrategyUndifferentiated targeting strategy Concentrated strategy Differentiated strategy

Companies might develop one marketing mix strategy that is appropriate for allmembers of the total market.

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Only one marketing mix is developed and directed toward a few, or perhaps one,profitable market segments.

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Exists when a firm develops different marketing mix plans specially tailored foreach of two or more market segments.

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Alternative of Targeting Strategy

1. Single segment 2. Multi segment 3. Product specialized 4. Market specialized 5.Full market coverage41


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Select Positioning StrategyIdentify Total Market

EffectiveSegmentation Determine Bases for SegmentationTargeting Segment


Marketing Mix


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PositioningPositioning Kotler defined: designing an offer so that it occupies a distinctand valued place in the minds of the target customer.43


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Positioning

Positioning Image that customers have about a product in relation to the productscompetitors

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Key to developing the appropriate marketing mix is the positioning strategy ofthe product.

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Presumptions of Positioning

All products have object and subject attributes Recognizable Comparable

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Select Positioning Strategy Effective positioning What consumers currently think about the product,especially in relation to competing products What the marketer wants consumersto think about the product Which positioning strategy will elevate theconsumers current product image to the desired product image.47


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Select Positioning Strategy

Position Mapping- creating a visual description about consumer perceptions of aproduct on two or more dimensions in relation to competitors.48


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Select Positioning Strategy

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Select Positioning Strategy The positioning strategy must determine where a company wants to go And how toget there by positioning the product according to any of the following ways: Price/Quality Product Attributes Product User Product Usage ProductClass Competition

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Marketing MixIdentify Total Market Segmentation Bases for SegmentationSelect Target Segment



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Recognize 4Ps and the 7Ps Product customer value Price cost Place convenience Promotion communication People consideration Processes co- ordination Physical evidence confirmation54


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Marketing Strategy and the Marketing Mix Place (Distribution)Marketing Mix

Product

Promotion

Price

Objective 4

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Marketing Strategy and the Marketing Mix Product

Refers to goods, services, people, places and ideas Household consumers Business-to-business customers56


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Marketing Strategy and the Marketing Mix Place (Distribution)

Marketing channel is the network of organizations that create time, place andownership utilities for household consumers and business customers.57


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Marketing Strategy and the Marketing Mix Pricing decisions are complex and are driven by a variety of considerationsincluding: Customer demand, costs, information availability, competition, profitmotives, product considerations, and legal considerations

Price59


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Documents

18226982 6 Segmentation Tarketing Positioning for Competitive Advantage Copy