Review:

Marketing is the idea of creating value

and exchange relationships.

Markteting's function within

the firm is to help the firm to
create a product or service that
is valued enough so that the
company can make money.

Think: Who are the competitors for

my specific company?

Principles of Marketing –Focus on Segmentation, Targeting and

Positioning

Principles of Karen Becker

You cannot be all things to all You have to find your people. Not everyone is going to buy the same toilet paper.
people – find your people! Different groups of people are looking for different things to buy.

In terms of
environmental impact, it's
a huge env. drain.

If we are concerned by
water storages and
deforestation, statistics
are important. this can
limit our market. This is a
huge env. impact.

Some are env. friendly,

some are bamboo, some
made a recyclable paper,
some dissolve easier,
some bleach free -- bunch
of difference attributes for
toilet paper. If there are so
many attributes for toilet
paper, imagine the range
for sneakers. Which is a
category that has blown
up.
This process of taking the market and finding your people your customers is called STP.
Segmentation: grouping customers based on relative needs and interests. Online vs in person. Taking all people who are potential
users and grouping them into smaller pieces.
Targeting: Choose one of those groups to say this is my primary group and this is my secondary group.
Positioning: This process is using the marketing mix to align the product or service to the needs and wants of the customer.
 Segmentation and Targeting
Segmentation - process of
dividing potential customers
into groups to better
understand them

Targeting - determining
which segments are most
likely to become customers
and directing marketing
efforts to best satisfy them
 GLOBAL DOG FOOD MARKET � envision
� inteligence

■ North America
■ Europe
■APAC
oo ar e 1s pr
■ South America
ch $100 Billion by 20
■ Middle EaS: & Africa
(2019-2024)
NORTH AMERICA IS
MAJOR MARKET

DRIVERS RESTRAINTS & OPPORTUNITES

• Growing awareness among CHALLENGES
consumers towards dogs health
• Higher rate of obesity in • Rising demand for variations in the
• Adoption of more number of
dogs. taste of dog food with proper
dogs and considering as their
• Allergy to dogs with respect nutrition requirement
family members. to specific food products.
• Number of dog consume-rs treating
• Need of healthyfood to prevent
their dogs as their family members

W
overeating by dogs.

www.facebook.com/envisioninteligence/ twitter.com/envision_intel Im in.linkedin.com/company/envision-intelligence

Is there really that much differentiation in the dog food market? YES. Luxury pet food market is growing and it fits with
this idea of everyday luxury. Within the global dog food market, lots of ways you can chunk up the market.

How can you segment? By ingredient type(chicken or beef), by product type (dry, wet, crunchy, bones), by pricepoin, or
by region.
 Five Criteria for a Market
1. True need and/or want
2. Ability to pay for the
product via means
acceptable to the marketer
3. Willingness to buy the
product
4. Authority to buy the
product
5. Large enough to be
profitable
 Objectives of Segmentation
• To improve an organization’s understanding of who
their prospective customers are and how to serve them
• To reduce risk in deciding where, when, how, and to
whom a product, service, or brand will be marketed
• To increase marketing efficiency by directing effort
toward designated segment(s) in ways that are
consistent with that segment’s characteristics
 Segmentation Research
• Know your customers Look at automobile industry for Mercedes so you
can know the industry and different types of
customers. Cars for those who want to buy
• What motivates them expensive vs not expensive.

• What value do they seek Know customers and know the industry. What
separates your customers?

• What are the trends that separate customers

 Common Market Segmentation
Approaches

Starting from behavioral and going left. Demographics is becoming less important. For ex, it wouldn't make sense to
do makeup for boys and girls. Have a broad perspective. So they wouldn't start with demographic. For them,
behavioral would be the most important.
Combining Bases for Segmentation
• Clusters
– Geo-cluster approach
demographic + geographic
data
– Geographic + behavioral data
– Demographic + lifestyle or This is called nesting when we start big
behavioral segments and keep going narrow.

• Nested
– Demographic ->
psychographic -> loyalty
 Segmentation in Action

What products or
companies would find
this market
segmentation by family
life stage useful?
 Sample Market Segment Profile

What is a good segment for me? Do I want young singles? Do I want kids? People who are young with no kids....
Which are the segments that I want to target? Which will be most efficient?
 Ideal Market Segment
1. Can be measured
2. Is profitable
3. Is stable
4. Is reachable
5. Is internally homogeneous
6. Is externally heterogeneous
7. Is responsive
8. Is cost-effective
9. Helps determine the marketing mix
Once you have these segments done, then you want to choose a target segment that is big enough and you think will be profitable and receptive.
Beyond Meat

Choosing a Target Market

In

The target market should include only those segments

of a market that are both:
• Profitable to serve
• Likely to be receptive to the products a company
provides – what motivates the segment
 Selecting a Target Segment in Meat
Substitute
• Whose needs can you best satisfy?
• Who will be the most profitable customers?
• Can you reach and serve each target segment
effectively?
• Are the segments large and profitable enough to
support your business?
• Do you have the resources available to effectively
reach and serve each target segment?
 Targeting Strategies

Strategy Target Market Example

Mass marketing Everybody everywhere Target, Amazon

Differentiated Large groups within the

Costco, Sam’s Club
marketing total market
High penetration within
Niche Trader Joe’s, Stitch
smaller, specialized
marketing Fix
segments
Individual customers or
Micromarketing Groupon, Instacart
localized microsegments
I SOY-BASED
MYCOPROTEIN­
BASED

I WHEAT-BASED I OTHERS
�technavio

+62% $4.2bn Plant based category has

PLANT-BASED*
·growth in plant-based claims NPO
MEAT SUBSTITUTES**
.,Forecasled value or global meat
gorwn 62%. It's a massive
(Global, CAGR 2013-2017) substitutes market (US$, 2022)
group. 4.2billion.

EATING GREEN

=♦
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·:;•;�•• INSIGHTS Source: lnnova Market Inslgh1s. 2018
 Linking Target Market and
Marketing Mix
Marketing
Targeting Criteria
Element
Product What would make the ideal product for your target segment?
What special features or capabilities are critical for this
segment?
What unique problems does your product help them solve?
Promotion What are the best ways to get your target segment’s
attention?
What do you want this segment to remember about your
product?
Place / Where does this segment look or shop for your product?
Distribution What is the best way to get your product to your target
customers?
Price What price(s) are your target customers willing to pay?
How much is too expensive? How much is too cheap?
Using these 4 P's to create a certain perception for my product. How consumers view your certain product. How do I fit compared to other
people.

Positioning
Ex: What is your market share in the automobile industry?

What is the brand attitude?

• Strategic process to determine the place or “niche”

an offering should occupy in a given market, relative
to other customer alternatives
• When you position a product or service, you need to
understand
– Place
– Rank
– Attitude
– Outcomes

Mercedes: theres other cars out there that can do

the same thing. But your brand name is what
people go after. If you can build a brand, that will
be very helpful.
 Steps of the Positioning Process
1. Confirm your understanding of
market dynamics
2. Identify your competitive
advantages
3. Choose competitive
advantages that define your
market “niche”
4. Define your positioning
strategy
5. Communicate and deliver on
the positioning strategy
Step 1: Understand Market Dynamics

A firm understanding of your target market

includes these questions:

• In which product, service, or market category (also called

the “frame of reference”) do you plan to use this
positioning?
• Which target segment is your focus for the positioning
you are developing?
• What factors do these buyers evaluate when they make a
purchasing decision?
• How do these buyers view your competitors in the
category?
 Step 2: Identify Your Competitive
Advantages
A trait, quality, or capability that allows you to
outperform the competition

Comes from any or all of the following:

• Price
• Features
• Benefits
 Step 3: Choose Competitive
Advantages That Define Your Niche
 Step 4: Determine Positioning Strategy
Differentiator Positioning Strategy Examples

Category Benefit Position yourself as “owning” an Volvo = Safety

important benefit and delivering it better Hallmark = Caring shared
than anyone else Hawaii = Aloha spirit
Best fit for the Position yourself as an ideal fit for the Red Bull = Extreme
Customer customer’s personality, style, and Guess Jeans = Sexy chic
approach Virgin Atlantic = Ultra cool fun
Business Approach Position yourself with a distinctive Jimmy John’s = Unbelievably
approach to doing business fast
TurboTax = Easy DIY
Anti-Competition Position yourself as a preferred Apple = Think different
alternative to the competition Seven-Up = The Uncola

Price Position yourself according to pricing: Wal-Mart = Lowest prices

lowest cost, best value for the money,
luxury or premium
Quality Position yourself according to a quality
standard: high quality or else reliably
good quality at a reasonable price
Old Navy = Affordable fashion
Hearts on Fire = Perfection
Ritz Carlton = luxury
 Step 5: Communicate Position
Positioning Statement - One sentence that
concisely identifies the target market and what
you want customers to think about your brand
Includes:

1) the target market

2) the brand name
3) the key points of differentiation
4) the product/service category
5) why customers should believe the positioning claims
Positioning Statements
 Criteria to Evaluate Positioning
Statements
• Is it tailored to the target
market?
• Is it simple, focused, and
memorable?
• Does it provide an
unmistakable picture of
your product, service, or
brand?
• Can you deliver on the
promise you make?
• Does it provide
helpful direction for
designing the marketing
mix and other decisions?
The process of repositioning is when you had been defined a certain way, but then you need to update your image, or shift, because your old
views may not align with your current views, for example. Ex: Burberry changed their logo because it was an old fashioned font.

Repositioning
• Its more than a logo or
package change

• Requires intimate
understanding of new
position

• Requires long-term
commitment
Reasons to Consider Repositioning
1. Competition
• New competitors entering or leaving the market; competitors joining
forces
• Competitor’s innovation that threatens to make your offering obsolete;
competitive pricing strategies
2. Market environment
• Economic slow-down or recovery
• Changes in consumer confidence, the political climate, or social forces like
the movement around social responsibility and sustainability
• Radical shifts – coronavirus
3. Consumer trends
• Changing tastes and preferences
• Evolving attitudes and behaviors
• New segments emerging as targets
4. Internal environment
• Changes in organizational leadership and strategy
• Acquisition or development of new technology
• Introduction of innovation that offers new competitive advantages and
differentiators
Repositioning

“Gucci has woven e-commerce, social

media, digital marketing, gaming and
the integration of mobile apps into the
tapestry of its legacy offline business.
…the modern consumer’s relationship
with Gucci is holistic, which has
resulted in huge returns from longtime
customers and new converts alike.”
 For this week:
• News Brief – find an article related to S-T-P -- think: who are your people?

– Format:
• Paragraph 1 -- Introduction and Summary (including hyperlink/footnote), \
• Paragraph 2 -- How the item fits with class material (illustrates, contradicts, or presents something
new)
• Paragraph 3 -- Conclusion and key learnings

• Activity 2 – Create an S-T-P report for your company (this will be section 2 of your
final report)
– How might you segment all the potential customers (what does the universe of customers
look like), which criteria make the most sense and why (remember the reports should be data
driven, so find research)
– Identify your primary and secondary target markets – what characteristics do they have, why
have you chosen these markets, are they viable markets
– How is your company positioned within these markets – how do consumers in these markets
”perceive” your company
– Are there markets that are currently not being served or positions within the markets that are
open – this might point to an innovation for your group’s final portion of the project
– Create 2 different perceptual maps using different criteria
• Explain why you have chosen these 2 combinations of criteria and what you learn from the mapping
• These can be in the appendices of your report