Module 7 - Rome Business Scho and Positioning. ... Primary segmentation variables for business markets. ... • Services differentiation –Delivery –Installation

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  • Lecture 7- slide 1

    Master in Marketing and Communication

    Module 7

    Segmentation, Targeting,

    Differentiation and Positioning.

  • Lecture 7- slide 2

    Customer-Driven Marketing Strategy:Creating Value for Target Customers

    Market Segmentation

    Market Targeting

    Differentiation and Positioning

    Topic Outline

  • Lecture 7- slide 3

    Creating Value for Targeted Customers

  • Lecture 7- slide 4

    Market segmentation is the process that

    companies use to divide large

    heterogeneous markets into small markets

    that can be reached more efficiently and

    effectively with products and services that

    match their unique needs

    Market Segmentation

  • Lecture 7- slide 5

    Segmenting consumer markets

    Segmenting business markets

    Segmenting international markets

    Requirements for effective segmentation

    Market Segmentation

  • Lecture 7- slide 6

    Segmenting consumer markets

    Geographic

    Demographic

    Psychographic

    Behavioral

  • Lecture 7- slide 7

    Market Segmentation

    Geographic segmentation divides the

    market into different geographical units

    such as nations, regions, states, counties,

    or cities

    Segmenting Consumer Markets

  • Lecture 7- slide 8

    Geographic segmentationConsumer Markets

  • Lecture 7- slide 9

    Geographic segmentationConsumer Markets

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  • Lecture 7- slide 10

    Market Segmentation

    Demographic segmentation

    divides the market into

    groups based on variables

    such as age, gender, family

    size, family life cycle, income,

    occupation, education,

    religion, race, generation,

    and nationality

    Segmenting Consumer Markets

  • Lecture 7- slide 11

    Market Segmentation

    Age and life-cycle stage segmentation is the

    process of offering different products or using

    different marketing approaches for different age

    and life-cycle groups

    Gender segmentation divides the market based on

    sex (male or female)

    Income segmentation divides the market into

    affluent or low-income consumers

    Demographic segmentation

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  • Lecture 7- slide 12

    Demographic Segmentation

  • Lecture 7- slide 13

    Market Segmentation

    Psychographic segmentation

    divides buyers into different

    groups based on social class,

    lifestyle, or personality traits

    Segmenting Consumer Markets

  • Lecture 7- slide 14

    Market Segmentation

    Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product

    Occasions

    Benefits sought

    User status

    Usage rate

    Loyalty status

    Segmenting Consumer Markets

  • Lecture 7- slide 15

    Occasion Segmentation

  • Lecture 7- slide 16

    Psycographic and Behavioural segmentation

  • Lecture 7- slide 17

    Market Segmentation

    Multiple segmentation is used to identify smaller,

    better-defined target groups

    Geodemographic segmentation is an example of

    multivariable segmentation that divides groups

    into consumer lifestyle patterns

    Using Multiple Segmentation Bases

  • Lecture 7- slide 18

    Market Segmentation

    PRIZM NE classifies every American

    household into 66 unique

    segments organized into 14

    different social groups.

    These groups segment people and

    locations into marketable groups of

    like-minded consumers that exhibit

    unique characteristics and buying

    behavior based on a host of

    demographic factors

    Using Multiple Segmentation Bases

  • Lecture 7- slide 19

    Calvin Klein uses several layers of segmentation

  • Lecture 7- slide 20

    Primary segmentation variables for business markets

    Demographics: industry, company, location.

    Operating variables: technology, user/non user status.

    Purchasing approaches: purchasing function organisation, power structure, nature of existing relationships, general purchase policies, purchasing criteria.

    Situational factors: urgency, specific application, size of order.

    Personal characteristics: buyer-seller similarity, attitudes towards risk, loyalty.

  • Lecture 7- slide 21

    Source: Adapted from Thomas V. Bonoma and Benson P. Shapiro, Segmenting the Industrial Market(Lexington, MA: Lexington Books, 1983); see also John Berrigan and Carl Finkbeiner, Segmentation Marketing: New methods for capturing business (New York: Harper Business, 1992).

    Primary segmentation variables for business markets

  • Lecture 7- slide 22

    Source: Adapted from Thomas V. Bonoma and Benson P. Shapiro, Segmenting the Industrial Market(Lexington, MA: Lexington Books, 1983); see also John Berrigan and Carl Finkbeiner, Segmentation Marketing: New methods for capturing business (New York: Harper Business, 1992).

    Primary segmentation variables for business markets

  • Lecture 7- slide 23

    Market Segmentation

    Geographic location

    Economic factors

    Political-legal factors

    Cultural factors

    Segmenting International markets

  • Lecture 7- slide 24

    Market Segmentation

    Intermarket segmentation divides

    consumers into groups with similar needs

    and buying behaviors even though they are

    located in different countries

    Segmenting Business Markets

  • Lecture 7- slide 25

    Developing market segments

    Research based exercise that incorporates several stages:

    Qualitative research: Exploratory techniques to determine motivations and attitudes.

    Quantitative research: Structured questionnaire to gain information.

    Analysis: Factor and cluster analysis. Automatic Interaction Detection and conjoint analysis.

    Validation: Statistical validation.

    Profiling: Distinguishing attitudes and behaviours.

  • Lecture 7- slide 26

    Market Segmentation

    To be useful, market segments must be:

    Requirements for Effective Segmentation

    Measurable Accessible

    Substantial Differentiable

    Actionable

  • Lecture 7- slide 27

    Requirements for effective segmentation

    Measurability

    Degree to which size, purchasing power and profits of a market segment can be measured.

    Accessibility

    Degree to which a market segment can be reached and served.

    Substantiality

    Degree to which a market segment is sufficiently large or profitable.

    Actionability

    Degree to which effective programmes can be designed for attracting and serving the given market segment.

  • Lecture 7- slide 28

    What is market targeting?

    Market targeting involves evaluating

    the various segments identified

    during the segmentation process

    and deciding how many and which

    segments it can serve best.

  • Lecture 7- slide 29

    Market Targeting

    Target market consists of a set of buyers

    who share common needs or characteristics

    that the company decides to serve

    Selecting Target Market Segments

  • Lecture 7- slide 30

    Market TargetingEvaluating Market Segments

    Segment Size and Growth Analyze sales, growth rates and expected profitability.

    Segment Structural Attractiveness Consider effects of: Competitors, Availability of

    Substitute Products and the Power of Buyers & Suppliers.

    Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages.

  • Lecture 7- slide 31

    Undifferentiated (or Mass) marketing

    Differentiated (or Segment) marketing

    Concentrated (or Niche) marketing

    Micromarketing

    Target marketing strategies

  • Lecture 7- slide 32

    Target marketing strategies

    Undifferentiated (or Mass) marketing: Assumes market is homogenous and uses the same product, promotion and distribution to all consumers.

    Differentiated (or Segment) marketing: Adapting a companys offerings so they more closely match the needs of one or more segments.

    Concentrated (or Niche) marketing: Adapting a companys offerings to match the needs of one or more sub-segments more closely where there is little competition.

    Micromarketing: Marketing programmes tailored to narrowly defined geographic, demographic, psychographic behavioural segments.

  • Lecture 7- slide 33

    Micro marketing

    Local Marketing

    Tailoring brands and promotions to the needs and wants of local customer groups.

    Individual marketing

    Tailoring products and marketing programmes to the needs and preferences of individual customers.

    Mass customisation

    Preparing individually designed products and communication on a large scale.

  • Lecture 7- slide 34

    Marketing Differenziato Colgate identifica diversi segmenti-

    target offrendo loro diversi tipi di dentifricio

  • Lecture 7- slide 35

    Marketing Concentrato (o di Nicchia)

    Morgan Cars serve una nicchia di mercato, producendo macchine

    sportive tradizionali fatte a mano per baby boomers

  • Lecture 7- slide 36

    Marketing individuale

  • Lecture 7- slide 37

    Market Targeting

    Undifferentiated marketing targets the

    whole market with one offer

    Mass marketing

    Focuses on common needs rather than whats

    d