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Overview: Segmentation, Targeting & Positioning
Why do this?
Market Segmentation - Principles
± Geographic ± Demographic ± Psychographic ± Behavioral ± Other (anything!) No single best way to segment a market. Often best to combine variables and identify smaller, betterdefined target groups.
suburban. San Francisco ± Population Density: rural. Mexico. southern. European Union. etc. ± City or Metro Size: New York. semi-tropical .Geographic Segmentation Divide markets into different geographic units. Pacific Rim. East Coast. Mountain. urban ± Climate: northern. Western Europe. etc. ± Country Region: Pacific. tropical. Examples: ± World Region or Country: North America.
. ± Usually the worst variable to use.Demographic Segmentation Use Differences in: ± age. family size. family life cycle. income. gender. occupation. education. and religion ± Most frequently used segmentation variable Ease of measurement and high availability. race.
lifestyle. . or personality characteristics. People in the same demographic classification often have very different lifestyles and personalities.Psychographic Segmentation Psychographic segmentation divides a market into different groups based on social class.
ex-users. regular users. Loyalty Status ± Nonusers. Usage Rate ± Light. firsttime users. medium. heavy.Behavioral Segmentation Occasion ± Special promotions & labels for holidays. potential users. Benefits Sought ± Different segments desire different benefits from the same products. ± Special products for special occasions. .
Loyalty Status Segmentation Hard-core Split loyals Shifting loyals Switchers .
User & Loyalty Status Segmentation .
S.Geodemographic Segmentation PRIZM. Census data ± Profiles on 260. neighborhoods ± 62 clusters or types . by Claritas ± Organized by ZIP code ± Based on U.S.000+ U.
Claritas Prizm .
so few firms target this segment.Requirements for Effective Segmentation Segments must be ± Measurable ± Accessible ± Substantial ± Differentiable ± Actionable Lefties are hard to identify and measure. .
profitability and growth rates Segment Structural Attractiveness ± Competition.Evaluating Market Segments Segment Size and Growth Potential ± Sales. substitute products. new entrants (Porter s Five Forces) Company Objectives and Resources ± Core competencies ± What business do we want to be in? . ± buyers & supplier power.
Overview .Targeting Segments .
Market Preference Patterns .
Undifferentiated (Mass) Marketing ± Ignores segmentation opportunities .
etc. Dreft.Differentiated (Segmented) Marketing ± Targets several segments and designs separate offers for each. Gain. Diet Coke. etc. Scion. Corolla. Sprite.) ± Toyota (Camry. etc.) . Cheer. ± Coca-Cola (Coke.) ± Procter & Gamble (Tide. Prius.
Question du Jour Should the same company produce and market brands that compete with each other? .
Niche Marketing ± Targets one or a couple small segments ± Niches have very specialized interests .
Micromarketing Tailoring products and marketing programs to suit the tastes of specific individuals and/or locations. .
Flexible Marketing Offerings Naked /Core solution ± Product and service elements that all segment members value Discretionary options ± Some segment members value ± Options may carry additional charges .
Patterns of Target Market Selection: Product x Market Matrices .
Socially Responsible Targeting Controversies and concerns ± Targeting the vulnerable and disadvantaged Cereal. Cigarettes. Fast-food ± The Catch-22 of Targeting Psychological Reactance Failure to target seen as prejudice . Alcohol.
Positioning The place a product occupies in consumers minds relative to competing products. .
Positioning Example eBay¶s positioning: No matter what ³it´ is. you can find ³it´ on eBay! .
To busy mobile professionals who need to always be in the loop.Positioning Example To (target segment and need) our (brand) is a (concept) that (point-of-difference). . Blackberry is a wireless connectivity solution that allows you to stay connected to people and resources while on the go more easily and reliably than the competing technologies.
Orientation Dimensions .Positioning Maps: Luxury SUVs Price vs.
.Positioning Strategy Competitive advantages Points of Parity Points of Difference => Differentiation Positioning results from differentiation and competitive advantages. Positioning may change over time.
Sources of Differentiation ± ± ± ± ± ± ± Product Design Quality Additional Services Image People (Staff) Price Other 6-29 .
.Choosing the Right Competitive Advantages The best competitive advantages are ± ± ± ± ± ± ± Important Distinctive Superior Communicable Pre-emptive Affordable (to company and consumer) Profitable Moral: Avoid meaningless differentiation.
Over-positioning: ± Giving buyers too narrow a picture of the product. . Muddled Positioning: ± Leaving buyers with a confused image of the product.Positioning Errors Under-positioning: ± Not positioning strongly enough.
Generic Product Positions & Value Propositions .
Question du Jour Which is more important: Product or Positioning? .
In-class Activity Describe how each of the following brands. or products is positioned: . companies.
In-class Activity. Part 2 Choose one of the companies/brands and ± Identify relevant direct competitors ± Choose the two dimensions that are most important to consumers ± Develop a perceptual positioning map ± Are there any opportunities in this category? .
In-class Activity. Part 3 Choose a company and invent a segmentation scheme for that company s customers using the variables we discussed in class. .