UNDERSTANDING

THE MARKET
Part III
 Markets and Target Markets

Market Target Market

■ It is composed of consumers ■ the target market of a
with enough purchasing product and service with
power, and willingness to the specific segment of
buy a particular products consumers will most likely
and services. This may buy and acquire it.
include people with different
lifestyles, values in life,
education and income
levels.
■ To have better understanding of the consumers,
one needs to have a good understanding how to
do Segmentation, Targeting and Positioning
(STP) to be able to utilize the knowledge on how
to serve the customers right and make them a
happy customer of one’s business.
1. MARKET SEGMENTATION
■ It is the division of the total market into smaller,
relatively homogenous groups by which you have a
good chance to become effective in your selected
customer.
■ It has 4 basic requirements:
a) must present measurable purchasing power and size; i.e., women influence 80% of
the goods that’s why most of the pictures used are usually women
b) must be served and reached effectively through promotion
c) sufficiently large to give them good profit potential need to be identified
d) segments that match a firm’s marketing capabilities must be identified (and
at times limited to only a certain niche rather than spreading into too many small
markets)
 Types of Market Segmentation
1. Geographic Segmentation – divides an overall market into smaller
groups based on location. For example, the product offered in Baguio City is
totally different to what is being offered in Valenzuela City.

2. Demographic Segmentation – defines groups according to their personal

traits such as gender, age, income, occupation, education, sexual orientation,
household size and stage in family life cycle and it is the most common used
method of doing market segmentation.

2.1 Segmenting by Gender – is an obvious variable that helps to

define the markets for certain products. Ex: Celine focuses on
shoes only for women.
2.2 Segmenting by Age – is the distributions of each group
that differentiate consumer needs and wants. Ex: Milk
product. S26 milk for infant. Sustagen milk for toddlers,
Promil Preschool for preschool kids.

2.3 Segmenting by Family Lifecycle – as people move from

one stage to another, their preferences and buying habits
change. Ex: a family with children and without children.

2.4 Segmenting by Income– is a common basis for

segmentation, since the term ‘market’ refers to people with
purchasing power. Ex: professionals working in Manila versus
a construction workers working in the province have different
preferences in buying foods.
3. Psychographic Segmentation – divides a population into
groups that have similar psychological characteristics, values and
lifestyles.
Lifestyle – is a person’s mode of living or daily operations, a
composite of psychological profiles, needs, motives, perceptions
and attitudes. Ex: a lifestyle of a manager versus an ordinary
worker.
 Market Segmentation of Metro Manila Consumers
1. The Smooth Highly sociable, secure and active but conservative, have positive
Sailors (34%) self-concept, currently-conscious and prefer the simple and
essential
2. The High Spirits The most vibrant and fun-loving, would like to maintain a high
(31%) social profile, appear to be trend-setter, typically image and health
conscious, and would rather go out with friends than stay at home

3. The Tight Guards Majority in this group may occasionally face financial constraints,
(23%) seem to put a lot of importance on trust and rely on information on
brands from their friends
4. The Home-makers Compromised mainly of women, espoused traditional values, even
(5%) with regard to their roles in the family and society, are home
buddies or house-proud types
5. The Bystanders Passive people, usually ‘painfully shy’ and not inclined to socialize,
(7%) are not driven to achieve anything, they are bargain hunters and
opt to buy cheap goods with multiple uses
2. MARKET TARGETING
■ It involves the decision to select segments and choose
the best action plans to reach the identified segments.

Targeting Choices by Derek F. Abell

1. Single Segment Concentration – where one product is
geared towards one market segment in a niche strategy
2. Selective Specialization – where the firm aims different
product variant at different segments with the idea of one
product per segment
3. Product Specialization – where the firm aims particular
product variants at one particular market segment

4. Market Specialization – where the firm aims a variety of

product variants at one particular market segment

5. Full Market Coverage– where the firm uses

undifferentiated marketing, aiming a variety of product across
a variety of segments.
2. MARKET POSITIONING
■ It refers to the placing of the product or the service in a
particular perceptual position within the mind of the
consumer.

Unique Selling Proposition – marketing strategy of

differentiating a product or service by focusing on unique
features that are not offered by the competitors. After
identifying your preferred segment, targeting and position, it
will give you a clearer view how you can make your product
and service be different from other products in the community.
This is called Unique Selling Proposition.
A Better Understanding of Customer: Putting
Yourself in their Shoes

Question #1: If you were the prospect being

approached, what would it take to get your attention?

Question #2: What can you add to your business

that your competition doesn’t offer?
Differentiation:

• WHO you are.

• WHAT you do better.
• WHY you are the best agent for the job at hand.
• WHAT makes you different.
• WHY should someone do business with you.
• WHAT are you famous for.
• WHAT is your appeal to sellers and buyers that is
unique and distinct.
Ideas to consider: Motives for Buying
• Uniqueness • Desire for Gain
• Specifics • Fear of Loss
• Comfort and
• Relevance Convenience
• Believability • Security and
• Conciseness Protection
• Pride of Ownership
• Satisfaction of
Emotion
• Satisfaction of Ego
Activity #5:

“Shop Your Competition”

The goal should be to turn it around and get out in front of the
competition.
Mechanics:
1. The students will be grouped into four (4) and they will be given
assigned company.
2. The group will develop a clear sense of who their competitors are.
3. They will highlight what makes their assigned company better by
presenting features which are not available in their rival company.
4. Present in class and communicate how THEY and THEIR
assigned company can satisfy those needs and wants best for your
company.
 Customer Validation
A. INTERVIEW – interviewing customer is a common mechanism for
gathering direct response from the customer. They are usually done
one-on-one with an individual customer or with a small number of
people from the same business or family unit. Customer interviews
provide opportunity to get in-depth information from a single
customer

This can be more time-consuming than focus groups, but

because you are speaking directly with a single customer, you can
focus on their particular experience, and also hear directly from
them.
B. Focused Group Discussion (FGD) – it involves a small number of
people (usually between 4-15, but typically 8) brought together with a
moderator to focus on specific topic. Focus groups aim at a discussion
and produce qualitative data that may or may not be representative of
the general population.

FGD have the advantage of allowing participants to hear and

respond to what each other would say. With the help of a skilled
moderator, a focus group can highlight key issues without
decentralizing into group think.
C. Survey – it is another way to gather information from customer that
really does a big help in the improvement of product. With the help of
Facebook and Twitter, it has never been easier to poll customers and get
their opinions.

A survey is a questionnaire which is used to poll specific audience

to gain a deeper understanding of their opinions. Online surveys are
often used to better understand customer’s opinions and tastes about
certain products.
 THE
IMPORTANCE OF
MARKETING MIX
Part 4
 The Marketing Mix
These are the very important tools of employing marketing in your
business. They are areas where entrepreneurs need to make decisions.
These decisions affect the nature of the offering, position or package of
benefits that the business offers to the customers. The tools are
commonly known as the 4P’s or 7P’s.

Mix is used to explain the idea that any one time the marketer will
select a set of tools from the marketing toolbox or the Marketing Mix
in specific proportions to solve specific problems – these are the
important ingredients for you to cook the right taste and quantity that
will make your customer be satisfied in what you will be offering.
Tools in Marketing Mix

1. Product
2. Price
3. Promotion
4. Place (Distribution)
5. People
6. Process
7. Physical Evidence
1. PRODUCT – quality, features, options, style, brand name, packaging,
sizes, services, warranties, returns
2. PRICE – list price, discount, allowances, payment periods, credit terms

3. PROMOTION (communication) – advertising, personal selling, sales

promotion, public relations, direct marketing

4. PLACE (distribution) – channel, coverage, locations, inventory,

transport

Broom and Bitner extended the traditional 4P (McCarthy) framework to

7 reflects mostly on the service economy
5. PEOPLE – the attitudes of staff, training of staff, internal relations, the
observable behavior of staff, the level of service-mindedness in the
organization, the consistency of appearance of staff, customer-customer
contacts

6. PROCESS (set of activities that results in delivery of products or services

benefits)– degree of customer contact, quality control standards, quality
assurance, payment methods (degree of convenience), queuing systems for
customers, waiting times

7. PHYSICAL EVIDENCE (the environment in which the service is delivered)–

buildings, furnishing/décor, layout, goods associated with the service e.g.
carrier bags, tickets, brochures, all the above can help shape customer’s
perceptions of the service
 Combining the Mix

This is the essence of doing marketing: identifying,

anticipating, and satisfying customer needs and wants in
the most profitable way possible: delivering profits to the
organization and value to customers at the same time
outperforming the competition.
 What is BRAND?

• designs, symbols or combination

• image or perception that describes and differentiate a
product from competitors
• it is when buyers relate it with a set of tangible and
intangible benefits that they get from the product or
service that they acquire
• it is the business promise to provide the same set of
benefits consistently to consumers.
 Building a Brand Name
Involves all the operations that are necessary to build
and nurture a brand into a consumer’s mind that will create
a healthy cash flow stream for the company after launch.

“A company’s brand is the primary source of its

competitive advantage and is a very valuable strategic
asset” --David Asker
 Brand Image
Building your entrepreneurial brand.

“A great brand taps into emotions. Emotions drive most, if

not all, of our decisions. A brand reaches out with a
powerful connecting experience. It’s an emotional
connecting point that transcends the product.”
--Scott Bedburry, Nike/Starbucks
Activity #6:
In 60 seconds, identify the company who uses the following
slogan:

1. “In The Service of the Filipino”

2. “You’re in Good Hands”
3. “The Quality You Can Trust”
4. “It’s Time Every Juan Flies”
5. “Hindi Umaatras and May Tunay na Lakas”
6. “ Never Had It This Good”
7. “We Are Changing Lives”, “The Power of Convergence”
 Brand Equity

 when you established a name and it becomes a brand, it

is said to have equity
 it is that the premium and reputable a brand can always
command and dictate the competition in the market
 Benefits of Creating a Power Brand

 buyers will not change no matter what the others offer

because they already put a lot of trust in the brand
 buyers are satisfied and there’s no reason to change
 buyers are satisfied and would sacrifice just to get the
brand
 buyers value the brand and see it as companion
 customer creates a strong relationship on the brand
 Competitive Advantages of Brand Equity

 it reduces marketing costs and expenses

 can easily charge a premium price
 can easily introduce brand extensions and new
products
 can compete with others when it comes to price
competition
 Advantages of Branding
 Easy for the businesses to trace problems and process orders
because of its identity or attachment of brand in the product
 it provide legal security to the product exclusivity offered
by the company
 provides an opportunity to develop loyal and profitable
group of buyers
 creates corporate image and identity
 reduces harm to company reputation if the brand fails due to
its established reputation
 How to Measure Brand

The premium brand can command in the market and they

usually dictate the level of competition in the market area. It
also distinguish products and services away from others in the
market – Value proposition.

Brand reputation aligns what it says about the brand in

advertising with what it actually delivers and that’s how you
will create a strong brand, delivering what you promise that
lead to generation of enormous profits and expanding future
strategic opportunities.
 Example:

SM because of how they created their brands, they

now expanded their operation to different sectors of
industry with a good record of profit like SM
Residence, BDO bank, Bonus products available in
the hypermarket.
 What do power brands have that others don’t?

 a distinctive product
 delivering brand promise
 Personality (emotional bond with customer, generates
relationship measurably stronger than ordinary brands)
 Presence (seems to be present everywhere, enforcing
distinctiveness, successful brand extensions)
 Brand managers companies need:

 superior insight into customer needs

 ability to devise products/services that powerfully
meet those needs
 agility to redefine its offering as those needs
change
 creativity to produce exciting and compelling
advertising
Tangibles of strong Intangibles of
brands
strong brands
 Shape  company name
 Brand name
 Color  Slogan and its underlying association
 Size  Perceived quality
 brand awareness
 Model  customer base
 Price  Trademarks and patents
 Channel relationships
 Feature  Customer loyalty
 Benefits  Customer confidence
 competitive advantage