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Process of identifying distinct, relevant, market needs that can be best served separately than through a generic strategy
More commonly known as STP Segmentation Targeting and Positioning
What is the definition of segmentation
y Process of dividing the market in fragments or parts that have
similar needs y These segments are deemed to be better served separately rather than by one product or strategy
a review of the current market and an assessment of the product range that covers each relevant segment. (conduct the usual market audit) .The Marketing Management Process y Assessment ends and where Segmentation begins for new products getting into the new category y For old products.
How does segmentation REALLY EVOLVE Demystifying all the myths about this process .
Once upon a time in LaLa Land y The guru discovered.Guru . that by placing dark colored cellophane in his eyes. it made his eyes. And viola!!!! Sunglasses!!!! y Am I a genius or what«. =) . y So he went back to his lab and tinkered and placed colored cellophane on his glasses«. during a hot summer day.
you have to look like one =P ² naks!) . To be a guru. y Everybody loved the product and everybody bought the new GURU shades (me tagline pa«.Business person yata si guru y He made one model and sold the model to everyone in the market.
The sales were brisk and Guru made a fortune« y Next time makita nyo si Guru palibre kayo«.Clean . =D y But there were greedy people from the LaLa Land and is envious of Guru Shades. y One of them is Mr.
y He went up to 5th floor library for two years and thought about his idea. Clean was studying carefully y I have two options y To come up with a better designed pair of shades y Or to come up with a shades that is cheaper.Mr. .
y FGM simply said that in a market with a new product.But lo and behold y Fairy Godmother Ming was joyfully flying through the halls of LaLa Land and saw Mr. there would always be space for everyone. . pragmatic and in deep thought. y FGM landed and asked MC what his problem is. Clean. problematic.
BLING! MC is now enlightened .
MC decided to attack y Target the same market as Guru shades but I would price my product a bit lower. y This would enable MC to capture market share y Naks low price strategy si MC me lahing Chinese din pala .
He is the owner of 35% the market Guru Shades is left with 65%« .MC did earn his share«.
And the plot thickens« y MC is aggressive y Guru is upset «.. (umuusok ang ilong at umiitim ulit ang buhok) y And more people are looking into the category as the summer heats up!!! y New player comes in« with lots of cash to dispense and lots of wits«. .
Sister Shades!!!!!! How did Sister Shades got the idea? .
=P . Hindi sya beauty sa shades na yun«. they thought one product could fit all« y Sister Shades tried the Guru shades and Clean shades and she was disappointed. With minimal marketing strategy know how.Simple y Guru Shades and Clean Shades looks the same.
CheCheng!!! y Idea came from her own that there is a space in the market that would appreciate better looking shades and this would be the female market y Mas kikay y Mas beauty .
And then there were others y Shades for the elite y Shades for the yuppies y Shades for babies y Shades for oldies (mataas ang grado at baduy) wehehehe .
The end of it all«. Guru·s share is now only 2% and the shades market is cluttered by as much as 500 market players .
y Draw out market sizing and existing competitor profile in each segment y Formulate a SWOT analysis based on the relevant market segments .Segmentation Process EXISTING PRODUCTS y Integrate ideas in Consumer Behavior Analysis.
Three Approaches in Market driven strategy y Mass Marketing y Cater to all y Target Marketing y Select segment or group of segments that has the same needs and wants y Niche Marketing y Select one segment and choose to compete strongly (usually a very small segment) .
Corned Beef Example y Argentina caters to the mass market y Class A. B. C and D y The product and the brand appeals to a very broad range of consumers y Marketing efforts are concentrated in appealing to the masses y And below the line efforts are used to target specific segments .
B and C y Joni·s goes for the C and D y Julia·s Bakeshop targets and lower C and D .Niche Marketing y Choosing a segment and specializing in it y Kink Cakes chose to specialize on special event pastries y Goldilocks and Red Ribbon competes for the mass market specifically A.
Profiling y Process of identifying market segment user characteristics y User segment can be DESCRIBED IN 3 WAYS y DEMOGRAPHIC y BEHAVIORAL y PSYCHOGRAPHIC .
Demographic y Segmentation based on their personal statistics y Age y Gender y Social economic class y Occupation .
y Gun market y Hunters y Police y Hobbyists y Hobbyist could further be segmented into the following y Young y Old y Rich y Richer
y How the consumers use the product or the rate they use it. y Rate of usage y User state y Place of usage y Type of industry
y Heavy drinkers y Social drinkers y Non drinkers
y Chain smokers y Social smokers y Pretending to be smokers
Psychographic y What they think of themselves when they use the product y What are they thinking prior to purchase y What they think of themselves in relation to the product .
Examples y Weight conscious y Health conscious y Critical y ´Inµ y Discriminate taste .
Example of a Market Driven Segmentation Approach Entry level drinkers Advanced drinkers Teenagers Adventurous. pre disposed to try. Ego Want to enjoy life with good health through healthy lifestyle Yuppies Sophisticated Executives Health Drinkers Retirees . individuality search More money to spend. Social Drinker Care about image.
Market Segmentation Process for NEW PRODUCTS y Find the most dominant segmentation base drivers y Cars = Socio economic segmentation y Clothes = demographics -> economic y Description of segments through other brand segmentation bases y Demographic => Behavioral / Psychographic .
Step #2: SWOT for each y Analyze the segments by formulating a SWOT analysis for each segment y Implement a CPM for each segment A Brand B C .
Next Steps y Choose the segments where you would have the best chance of winning y Target that segment for the following reasons y y y y Best chance to win Most profitable Most strategic Stop gap measure .
y Market Targeting is a process of allocation of company effort and resources towards a certain market segment. y Targeting is a match between the company·s products and services and the inherent NEEDS AND WANTS characteristics of the target segment y WRONG TARGET«. . LOW PROBABILITY OF SUCCESS«.Targeting is a decision«.
Types of target market y Multiple segments y Especially if the needs are homogenous y Single segment y Primary target market (PTM) y Main focal point of all marketing programs y Secondary target market (STM) y Used only as a consideration for marketing programs .
After Targeting«. y POSITIONING!!!!!!!!!!!! ..
Positioning Preface y Conjoint Analysis y Measurement of importance attributes relative to category y Competitive Importance Attributes Analysis y Drawing of perceptual map per product attribute analysis y Positioning .
Conjoint Analysis Example y Ballpens y Attributes deemed as important y Point ² sharpness y Smoothness in writing y Ink color ² how dark is the ink y Barrel and design y Positioning should be based on an attribute that is solely your brand·s .
Positioning Main strategic point of the marketing management process .
Own a word in the consumer·s mind«« Promil? ² Gifted Colgate = Flouride Polo = Mint with a hole KFC = Chicken Volvo = Safety .
y Missing word is Sustainable y Coin this into a positioning statement y Generate a slogan (work of the ad agency) .How is positioning done y After choosing the target segment y Evaluate competition y Choose a USP (Unique Selling Proposition) .the difference you choose to communicate to your market.
Why is Positioning important? y Create a distinction between our brand and its competitors y Reason for buying y Serves as a guide for marketing mix execution .
Examples: Flouride and healthy teeth for the family White teeth. fresh breath for the young Cheap Global brand .
What happens if you are not differentiated? .
What happens if you are too differentiated? Not mass market Differentiated and focused market .
What is Positioning? y Creating a distinct and relevant differentiation between the brand and it·s competitors y Key words y Distinct ² being different y Relevant ² difference being important .
BETTER! .Distinct y Does not resemble another brand·s position y Based on actual product or corporate differentiation and core competence y Advantage should be sustainable and cannot be copied by competitors y Advantage means that the company can do it best«.µNO OTHER BRAND CAN DO IT BETTERµ y Not based on a basic product promise y Lasang Orange Talaga ² tagline for Orange juice y Natural«« -.
RELEVANCE y The advantage / positioning should be: y Important to the target market y Wanted by your target market y It is would be bought by your target segment due to this positioning y Intention to buy is important .
Positioning alternatives y Price ²We are cheaper y Product attribute ²What the product has or what they can do (Colgate with 2 flouride) y Product category ²We·re a different animal y Product Source ² coming from a place where it is known (Pampanga Tocino) y User Segment ² we belong to a different market (Gatorade ² Sports Drink) y Benefit ² what they can get from the product y Against competition .
Cheaper Positioning Not necessarily cheaper but best value for money .
Product Attribute At first it was differentiated according to the beer having less calories Then all the brands followed . .
Product Category Now it is differentiated as a whole new category But within this category. they still have to position among themselves .
Batangas beef etc The Philippines has a very strong Ice Cream equity .Product Source Or you brands that gloats with New Zealand Milk. American made. German sausages.
Sa mga nag tagumpay Can be used as a snob appeal .User Segment Where celebrities work out For the people who know .
Benefit Whiter Skin Younger Skin .
Mintee y Mint Candy (obvious ba) y Last for 16 hours in your mouth y Dries fast (recyclable) y No sugar y Good for your teeth ² dental supplement attributes y Slogan making contest .
Samples y Its mint to be y Pwedeng ibulsa hanggang bukas y Mintee « Ngayon at Bukas .
Fresh. Alfaro and J.Slogan winning entries y y y y y G. Impossible to be Real Dator and Javier ² Sinless Mint y Complete with justification and rationale y Not the correctness of the positioning but the route towards the correct slogan . Santos Laquian and Carandang Cabrera and Ong ² Sexy. Have it All Huang and Eia Santos.
The right positioning route y Segment the market y studying consumers extensively y Analyze the competition and the environment y Choose a position that is unique and valued by competition y Communicate this differentiation .
Top 5 answers are on the board y Each pertains to the brand with various associations y Based on a survey conducted on 100 people y Here are the results .
yClear ySweet yFun 54 39 17 .
y Girl y Power / Success y Affordale / Cheap y Black / Colored 52 35 10 7 .
Assumption / Assumptionista .
ySosyal / rich yEnglish Speaking ySmart / Intimidating yParty / Fun yFashionista / Pretty 27 25 20 15 13 .
Case: Assumption Natives Products: Turon Bibingka Puto Etc .
Consumer Segments and description y College y Looks sosyal and snobish y Age range from 17 to 23 y Budget is not a concern y Good taste and patronizes the products that taste good rather than the brand y Price conscious .
High school y Impulse buyers y Rich kids y Brand conscious y Limited time to go to canteen and eat y Used to grand lifestyle y Fun loving y Quite proud of being Assumptionistas .
Grade School y Limited budget y Limited time y Rich kids y Product loyal and brand loyal y Friends are the best influencers .
Task«.Brand y Make a product description of your brand y Study the competitors of your target segment y Make a positioning proposal . y Provide the target market and positioning of this product y Name your product ..
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