Segmentation, Tarketing & Positioning for Competitive Advantage

8/3/2019 Segmentation, Tarketing & Positioning for Competitive Advantage

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Segmentation, Targeting &

Positioning for CompetitiveAdvantage

Prof. Rushen Chahal

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Marketing Process Involves

Market orientation as philosophy

Market segmentation

Targeting market

Positioning

Marketing mix

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Marketing Strategy

Select base for segmentation and identify appropriatemarket segments.

Evaluate and appraise the market segments resulting from

the first step. Select an overall market targeting strategy and specific

target segments.

Tailoring a distinct position in selected markets

Developing marketing mixes that serve desired positioningstrategy in the marketplace

Auditing marketing environments and efforts

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Importance of

Segmentation and Targeting

The focus of a successful marketing program is thecustomer. Effectively marketing must fully understand the

needs. Customers with decent life and individualism have

Heterogeneous demands, This has given rise to needsegmenting.

The process of understanding the customer and choosing agroup of customer you can serve best is targeting.

So target a segmentation is core of the marketing process.

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Identify the TotalMarket

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Objective 3

Identify Total MarketIdentify Total Market

Effective SegmentationEffective Segmentation

Bases for SegmentationBases for Segmentation

Select Target SegmentSelect Target Segment

Positioning StrategyPositioning Strategy

Marketing MixMarketing Mix

Monitor, Evaluate andMonitor, Evaluate and

ControlControl


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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 potentialcustomers for a product category.

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Segmentation and Effectiveness

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Objective 3


EffectiveEffective

SegmentationSegmentation






ControlControl


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Segmentation

Segmenting means dividing a heterogeneousdemanding markets into homogenous groups basedon similar characteristics or traits

Heterogeneous demand- different groups ofcustomers have differing needs from specificproducts.

Homogeneous segment- the separation of marketsinto distinctive groups based on homogeneouscharacteristics.

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Criteria for

successful segmentation

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Criteria for


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Clear differences

in consumerpreferences for a

product must

exist.


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Criteria for


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Difference

preferences for a

product must beidentifiable and

capable of being

related tomeasurable

variables.


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The proposed

market segmentmust have enough

size and

purch

asing powerto be profitable.

Criteria for



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Criteria for


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Companies must

be able to respond

to difference

preferences with

an appropriate

marketing mix.


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Criteria for


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The proposed

market segment

must be readilyaccessible and

reachable with

market programs.


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Determine Bases for Segmentation

15Objective 3


EffectiveEffective SegmentationSegmentation






ControlControl


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Bases for Segmentation

To divide a market into segments, firms use

segmenting criterion that describe thecharacteristics of each part of the market.

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Segmentation BaseSegmentation Base

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SituationSituation


PsychographicPsychographic


GeographicGeographic


Behavior/UsageBehavior/Usage


DemographicDemographic


BenefitsBenefits--SoughtSought



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Segmentation Base

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Life-cycleLife-cycle

Social classSocial classSocial classSocial class

Income LevelIncome LevelIncome LevelIncome Level

EthnicEthnicEthnicEthnicEducationEducationEducationEducation


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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base

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SituationSituation













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Segmentation Base

Localizes its marketing efforts to specific

geographic regions

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SituationSituation













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Segmentation Base

Grouping customers together based on

social class, lifestyles and psychological

characteristics (attitudes, interests andopinions)

Useful but more difficult to identify and

measure compared to demographicvariables

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SituationSituation













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Segmentation Base

Markets can be segmented based

on the benefits that consumersdesire from using a specific

product

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SituationSituation













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Segmentation Base

Purchase situation or occasion

Physical surroundings

Social surroundings

Temporal perspective

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SituationSituation













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Segmentation Base

Markets can be segmented by how often or howheavily consumers use a specific product

Paretos Principle or 80/20 Principle - 80% of revenuegenerated by 20% of customers

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Light Users

80%

Light Users

80%Heavy Users

20%

Heavy Users

20%


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Segmentation Base

Information for segmenting marketsmay be obtained from database such

as Census, State Statistics, ACORN

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Segmenting Business Markets

While the steps in the target market selectionprocess are essentially the same for businessmarkets, there are three major differences:

The purchasing process, which differs greatlyfrom the household consumer market.

The use of different segment variables, in simpleway, a Standard Industrial classification is often

employed

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Segmenting BusinessMarkets

Segmentation variables used to segment businessmarkets:

Size

Industry

Purchasing approaches

Product usage Situational factors (seasonal trend)

Geographic

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Select Segments for Targeting

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Objective 3


Determine Need forDetermine Need for


Determine Bases forDetermine Bases for






ControlControl


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Targeting

Targeting: choose the specific segment toward whicha firm directs its market efforts.

NicheMarketing: the process of targeting a small

market segment with a specific, specializedmarketing mix.

Micromarketing- the process of targeting smaller,more narrowly defined market segments.

On the individual consumer end of the continuum, afirm may decide to target individual consumers andpersonalize marketing efforts toward each.

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Target the MassMarket versus the

Individual Consumer

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Mass

Market

Niche Micro-

marketing The

Individual

Personal-

izationMicro-

marketingNicheStandardizedMarketing

Mix


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Advantage of Targeting Efforts

Cannot effectively serve all the segments, must

target marketing efforts to a segment or segments.

Marketing opportunities and unfilled gaps are

more accurately identified

Marketing mix is more delicately meet toe

potential customers needs

Offer the greatest potential to achieve profit orrelationship goals

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Targeting Strategy

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1.Undifferentiated marketing

2.Differentiated marketing

3.Concentrated marketing

4.Custom marketing


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Targeting Strategy

Companies might

develop one

marketing mix

strategy that isappropriate for all

members of the

total market.

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Undifferentiated targeting strategyUndifferentiated targeting strategy

Concentrated strategy

Differentiated strategy


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Targeting Strategy

Only one

marketing mix is

developed and

directed toward afew, or perhaps

one, profitable

market segments.

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Undifferentiated targeting strategy

Concentrated strategyConcentrated strategy

Differentiated strategy


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Targeting Strategy

Exists when a firm

develops different

marketing mix

plans specially

tailored for each of

two or more

market segments.

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Undifferentiated targeting strategy

Concentrated strategy

Differentiated strategyDifferentiated strategy


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Alternative of Targeting Strategy

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1. Single segment

2. Multi segment3. Product specialized

4. Market specialized

5. Full market coverage


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Select Positioning Strategy

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Objective 3


EffectiveEffective


Determine Bases forDetermine Bases for


Targeting SegmentTargeting Segment




ControlControl


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Positioning

Positioning

Kotler defined: designing an offer

so that it occupies a distinct and

valued place in the minds of thetarget customer.

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Positioning

Positioning

Image that customers have about a

product in relation to the

products competitors 43


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Positioning Strategy

Key to developing the appropriate

marketing mix is the positioning

strategy of the product.

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Presumptions of Positioning

All products have object and subject

attributes

Recognizable

Comparable

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Effective positioning

What consumers currently think about the

product, especially in relation to competing

products What the marketer wants consumers to

think about the product

Which positioning strategy will elevate theconsumers current product image to the

desired product image.

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Position Mapping- creating a visual

description about consumer

perceptions of a product on two or

more dimensions in relation to

competitors.

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The positioning strategy must determine where acompany wants to go

And how to get there by positioning the productaccording to any of the following ways:

Price/Quality Product Attributes

Product User

Product Usage

Product Class Competition

Symbol

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MarketingMix

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Objective 3








ControlControl


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MarketingMix

The final steps are to develop and a marketing

mix matched to the needs of the target market

This must support the chosen positional

strategy in the selected target markets

Therefore determine the 4Ps or 7Ps of its

marketing mix as a tool to achieve the desired

position

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Recognize 4Ps and the 7Ps

Productcustomer value

Pricecost

Placeconvenience Promotioncommunication

Peopleconsideration

Processesco-ordination

Physical evidenceconfirmation

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Marketing Strategy and the Marketing

Mix

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Objective 4

ProductPlace

(Distribution)

Promotion Price

Marketing

Mix


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Mix

Refers to goods, services, people, places and

ideas Household consumers

Business-to-business customers

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Product


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Mix

Marketing channel is the network of

organizations that create time, place and

ownership utilities for household

consumers and business customers.

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Place

(Distribution)


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Mix

IntegratedMarketing Communication (IMC)

System of management and integration ofmarketing communication elements

Advertising, publicity, sales promotion, personalselling, sponsorship marketing, and point-of-purchase communications

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Promotion

k h k


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Mix

Pricing decisions are complex and are driven by avariety of considerations including:

Customer demand, costs, information

availability, competition, profit motives, productconsiderations, and legal considerations

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Price

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Segmentation, Tarketing & Positioning for Competitive Advantage