Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 STRATEGIC MARKETING MANAGEMENT CHAPTER -5 Chaudhry Muhammad Nadeem

Blekinge Institute of Technology

SE-371 79 Karlskrona

+46 455 38 50 00

www.bth.se/eng

STRATEGIC MARKETING MANAGEMENT CHAPTER -5

Chaudhry Muhammad Nadeem Faisal

Cell: 0305-7761061

Email: [email protected]

B-Email: [email protected]

Url: www.littlemichael.co.uk/faisal/index.htm

Business Intelligence: www.ayaantraders.com/bi/index.php



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Segmentation & Market-Driven Strategy

Market segmentation needs to be considers early in the development of market driven strategy.

Market segmentation and value Opportunities

Market segmentation is the process of placing the buyers in product market into subgroup so that the members of each segment display similar responsive to a particular positioning strategy.

The segmentation is an identification process aimed at fining subgroup of buyers within a total market. The opportunity occur when the difference in buyers demand (response) functions market demand to be divide into segments each with a distinct capabilities.



+46 455 38 50 00

www.bth.se/eng


Like niche marker.

A segment is an possible market target for a organization competing in the market and provide an opportunity to batter match its product and capabilities to buyer’s value requirements.

Creating New Market Space

Importantly market analysis may identify segments not recognizes or served effectively by competitor, there may be opportunity to tap into new area of value and crate a unique space in the markets.



+46 455 38 50 00

www.bth.se/eng


Matching Value Opportunity and capabilities

Broad competitive comparison can be made for an entire product market more penetration insight about competitive advantages and market opportunity results form markets segments analysis. Examining specific market segments help to identify how to attain a closer match between buyers value reference and the organization capabilities and compare the organization strength (weakens ) to the key competitors in the each market.

Market targeting and strategic positing

Targeting market consists of evaluating and selecting one more segments whose value requirements provide a good match with organizational l capabilities.



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Which Market Segment To Target

1. Single Segment

2. Selective Segmentation

3. Mass Market Segmentation

4. Product Specialization

5. Market Specialization



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Factors Influencing Targeting Decisions

1. Stage of product – market maturity

2. Extent of diversity in buyer preferences

3. Industry structure

4. Capabilities and resources

5. Opportunities to gain competitive advantage

How marketers establish a position

1. Simple physically based attributes

2. Complex physically based attributes

3. Essentially abstract attributes



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Designing a Positioning Strategy

First Step – Choosing a Positioning Concept

1. Functional2. Experimental3. Symbolic

Positioning Strategies

How best to utilize the marketing program components

Strengthen the current position Repositioning Reposition the competition



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Positioning Errors

1 Under-positioning 2 Over-positioning 3 Confused positioning 4 Doubtful positioning



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Market segmentation activities

The processed of segmenting the market involves the interrelated activities and decision begins the defining to be segmented. It is necessary to decide how to segment the market. Frequency of use of product and nest the methods are decided for segmentation.

Market to be segmented

Strategic Analysis Decide howOf segments to segment

Finer Segmentation FormStrategies Segments



+46 455 38 50 00

www.bth.se/eng

Strategic Market Segmentation Chapter # 5Segmentation



+46 455 38 50 00

www.bth.se/eng


Indentifying market segments

After the market to be segments is defined one or more variable are selected to identify segments

Purpose of segmentation variable

Demographic, psychographic, characteristics of buyers these information may available form different sources

The use situation valuable, consider how the buyers use the product. Variable measure the buyers needs and preferences include attitude, brand awareness and brand preferences, Purchase- behavior variable describe the brand use and consumption



+46 455 38 50 00

www.bth.se/eng


Indentifying market segments

Stage 1 segmentation consists of variables that can be easily identified through demographics (i.e., statistics that describe a population), geographic (i.e., location issues) and financial information. For both consumer and business segmentation this information focuses mostly on easy to obtain data from such sources as government data (e.g., census information), examining secondary data sources (e.g., news media), trade associations and financial reporting services

1 Segmentation Variables Consumer Markets

Demographicsage group (e.g., teens, retirees, young adults), gender, education level, ethnicity, income, occupation, social class, marital statusGeographiclocation (e.g., national, regional, urban/suburban/rural, international), climate



+46 455 38 50 00

www.bth.se/eng


Current Purchasing Situationbrands used, purchase frequency, current suppliersPurchase Readypossess necessary equipment, property, knowledge and skill setsLocal Environmentcultural, political, legal

Benefits Soughtprice, overall value, specific feature, ease-of-use, service, etc.Product Usagehow used, situation when used, etc.Purchase Conditionstime of day/month/year when purchased, credit terms, trade-in option, etc.Characteristics of Individual Buyerpurchase experience, how purchase is made, influencers on purchase decision, importance of purchase



+46 455 38 50 00

www.bth.se/eng


Psychographicspersonality, attitudes, and lifestyle combined with demographics

2 Segmentation Variables Business Markets

Demographicstype (e.g., manufacturer, retailer, wholesaler), industry, size (e.g., sales volume; number of retail outlets), age (e.g., new; young growth, established growth, mature)Geographiclocation (e.g., national, regional, urban/suburban/rural, international), climate

Current Purchasing Situationbrands used, purchase frequency, current suppliersPurchase Readypossess necessary equipment, property, knowledge and skill setsLocal Environmentcultural, political, legal



+46 455 38 50 00

www.bth.se/eng


Benefits Soughtprice, overall value, specific feature, services, profit margins, promotional assistance; etc.Product Usagehow used (e.g., raw material, component product, major selling item at retail level), situation when used, etc.Purchase Conditionslength of sales cycle, set product specifications, bid pricing, credit terms, trade-in option, product handling, etc.Characteristics of Buying Centerpurchase experience, number of members, make-up of key influencers, willingness to assume risk;



+46 455 38 50 00

www.bth.se/eng


Business Arrangementownership (e.g.,. private versus public, independent versus chain), financial condition (e.g., credit rating, income growth, stock price, cash flow)

Current Purchasing Situationbrands used, purchase frequency, current suppliersPurchase Readypossess necessary equipment, property, knowledge and skill setsLocal Environmentcultural, political, legalCustomers Served by the Businessidentify the business’ market Business’ Perceived Imageidentify how targeted businesses are perceived by their customers



+46 455 38 50 00

www.bth.se/eng


j



+46 455 38 50 00

www.bth.se/eng


j



+46 455 38 50 00

www.bth.se/eng


j



+46 455 38 50 00

www.bth.se/eng




+46 455 38 50 00

www.bth.se/eng


Thanks



+46 455 38 50 00

www.bth.se/eng


Thanks



+46 455 38 50 00

www.bth.se/eng


Thanks



+46 455 38 50 00

www.bth.se/eng


Thanks



+46 455 38 50 00

www.bth.se/eng


Thanks



+46 455 38 50 00

www.bth.se/eng


Finer Segmentation Strategies

Combination of factors may help the company utilize the finer segmentation strategies

Logic of finer strategies

Customized offering Diverse customer base Close customer relationshipFiner segmentation strategies

Micro-segmentations

Seeks to identify the narrowly defined segments using the previously discussed segmentation variable as result to large number of small segments



+46 455 38 50 00

www.bth.se/eng


Finer Segmentation Strategies

Mass-Customization

Provide the customized products at price not very higher then mass produced Items is feasible using mass customization concepts and methods. Achieving mass customization objective is possible through computer added design and manufacturing software, flexible manufacturing techniques and flexible supply systems

Verity Seeking Strategy

This product strategy is indented to offer buyers opportunity to vary their choices in contrast to making unique choices.



+46 455 38 50 00

www.bth.se/eng


Develop Marketing Strategy

Undifferentiated or Mass Marketing – Under this strategy the marketer attempts to appeal to one large market with a single marketing strategy. While this approach offers advantages in terms of lowering development and production costs, since only one product is marketed, there are few markets in which all customers seek the same benefits

Differentiated or Segmentation Marketing – Marketers choosing this strategy try to appeal to multiple smaller markets with a unique marketing strategy for each market. The underlying concept is that bigger markets can be divided into many sub-markets and an organization chooses different marketing strategies to reach each sub-market it targets



+46 455 38 50 00

www.bth.se/eng


Develop Marketing Strategy

Concentrated or Niche Marketing –This strategy combines mass and segmentation marketing by using a single marketing strategy to appeal to one or more very small markets.

Customized or Micro-Marketing - This newest target marketing strategy attempts to appeal to targeted customers with individualized marketing programs. For micro-marketing segmentation to be effective the marketer must, to some degree, allow customers to “build-their-own” products.



+46 455 38 50 00

www.bth.se/eng


Selecting Segmentation Strategy

Four basic segmentation strategy alternatives

1. May decide not to enter the market

2. May decide to be a mass marketer instead of segmenting

3. May decide to market to only one segment

4. May decide to market more than one segment and design a separate marketing strategy for each

Marketers must have some criteria on which to base segmentation strategy decisions

1. Measurable

2. Meaningful

3. Marketable



+46 455 38 50 00

www.bth.se/eng

References

1. Victoria L. Crittenden, “ Strategic Marketing management ” , McGraw-Hill, NY,2002.

2. Philip R. Cateora, International Marketing, 9th edition 2000, alpha Sky Printer.

3. http://www.briantracy.com/blog/sales-success/analyzing-your-competition/

4. http://www.associatedcontent.com/article/259290/developing_a_strategic_vision.html

5. D Cravens, N Piercy, Strategic Marketing, 8th edition, McGraw Hill, 2005

6. V Rao, J steckel, Analysis for strategic Marketing, Addison Wesley Longmsn, Inc, 1998.

7. Fred R. David, Strategic Management, 6th edition, Prentice-hall, Inc, 1997.

Documents

Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 STRATEGIC MARKETING MANAGEMENT CHAPTER -5 Chaudhry Muhammad Nadeem