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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Strategic Market Segmentation Chapter # 5Segmentation & Market-Driven Strategy
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.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Strategic Market Segmentation Chapter # 5Segmentation & Market-Driven Strategy
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.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Strategic Market Segmentation Chapter # 5
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
Strategic Market Segmentation Chapter # 5Segmentation
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
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STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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;
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Thanks
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Thanks
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Thanks
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Thanks
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
Thanks
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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.
Blekinge Institute of Technology
SE-371 79 Karlskrona
+46 455 38 50 00
www.bth.se/eng
STRATEGIC MARKETING MANAGEMENT CHAPTER -5
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
Blekinge Institute of Technology
SE-371 79 Karlskrona
+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.