Lecture 3 STP PDF

International Business Marketing MARKEC04 A-cluster (1st year, 1st semester) Lecture 3 Segmentation, Targeting and Positioning Marketing: Real People, Real Choices Eleventh Edition, Global Edition Chapter...

International Business Marketing MARKEC04 A-cluster (1st year, 1st semester) Lecture 3 Segmentation, Targeting and Positioning Marketing: Real People, Real Choices Eleventh Edition, Global Edition Chapter 7 Segmentation, Target Marketing, and Positioning Copyright © 2023 Copyright © 2023 Pearson Pearson Education Education Ltd. All Rights Ltd. All Rights Reserved. Reserved. Learning Objectives 7.1 Identify the steps in the target marketing process. 7.2 Understand the need for market segmentation and the approaches available to do it. 7.3 Explain how marketers evaluate segments and choose a targeting strategy. 7.4 Recognize how marketers develop and implement a positioning strategy. 7.5 Understand the importance of target marketing and the three steps—segmentation, targeting, and positioning—for managing a successful career. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Customers Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  7 Segmentation Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Target Marketing: Select and Enter a Market In our modern, complex society, it is a mistake to assume everyone’s needs are the same. Market fragmentation occurs when diverse interests and backgrounds of individuals create greater diversity in needs and wants. Technological and cultural advances have Consider the choice you made as a fueled growing fragmentation of markets. consumer of higher education. Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  Target Marketing Strategy Dividing the total market into different segments on the basis of customer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Step 1: Segmentation Segmentation is the process of dividing a larger market into smaller pieces based on meaningful, shared characteristics. – Useful in both consumer and B2B contexts – Many different dimensions, or segmentation variables, that marketers can utilize Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Segmenting Consumer Markets Consumer markets can be segmented by demographic, geographic, psychographic, and behavioral criteria. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Demographic Segmentation: By Gender Many products appeal to one gender or the other Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Demographic Segmentation: By Family Life Cycle Family needs and expenditures change over time. – As families move through stages, different product categories ascend or descend in importance. – Even if importance is constant, needs within category may change (e.g., furniture). What purchase categories would be of rising importance for young newlywed couples? Expectant parents? Empty nesters? Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Demographic Segmentation: By Income and Social Class Income – Strongly connected to buying power, used by marketers to better match products to consumer groups based on their discretionary and non-discretionary income. Social Class – Upper class, middle class, and lower class – Many consumers buy according to an image they’d like to portray, not their actual level. – For instance, “easy credit” may lead consumers to buy cars and homes they can’t truly afford. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Geographic Segmentation Geographic segmentation facilitated by G I S tailors products to specific geographic area based on people’s preferences. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Segment by Psychographics Uses psychological, sociological, and anthropological factors to categorize customers. – Shared activities, interests, and opinions (“A I O’s”) E-sports is a booming market, as millions of members of the gamer generation watch their favorite players and teams compete. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Segment by Behavior Behavioral segmentation categorizes consumers based upon how they act toward, feel about, or use a good or service – Users/non-users – 80 / 20 rule – Customer loyalty – Experiential loyalty – Usage rate – Long tail approach – Usage occasions Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  18 Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Segment B2B Markets Segmentation also useful for B2B firms! – Helps B2B companies understand needs and characteristics of potential customers Firms can be categorized based on: – Organizational demographics – Production technologies used – User/non-user Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  Disruption in Segmentation: When Everybody’s a Segment of One Predictive analytics, driven by AI lets marketers know what a customer is likely to need and want before customer acts. Anticipatory shipping relies on AI to supply the customer with the product. The segment of one means tracking the preferences of a single customer and then tailoring products or ads. Generally, younger generations respond to digitally driven solutions. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Step 2: Targeting The next step is targeting, in which marketers evaluate the attractiveness of each potential segment and decide in which groups of the groups they will invest marketing resources to try to turn them into customers. – Selected groups are known as target markets, the segments on which an organization focuses its marketing efforts. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Phases of Targeting Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Phase 1: Evaluate Market Segments A viable market segment should: – have members with similar wants and needs that are different from those in other segments. – be measureable in size and purchasing power. – be large enough to be profitable. – be efficiently reachable by marketing communications. – have needs the marketer has the expertise and resources to satisfy better than the competition. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Phase 2: Develop Segment Profiles After segments are identified, marketers should develop profiles or descriptions of the typical customers within a segment. – Segment profiles provide detailed descriptions of the typical customers in terms of demographic, location, lifestyle, and product-usage characteristics. – Personas are descriptions of fictional characters created by marketers to represent each user type. Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  25 Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Phase 3: Choose a Targeting Strategy Undifferentiated targeting strategy: A Benefits from economies of scale broad spectrum of people Differentiated targeting strategy: one Must make sure offerings retain distinctive or more products for each of several images customer groups with different needs Concentrated targeting strategy: one or more products to a single segment Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Choose a Targeting Strategy Customized marketing strategy – Tailoring specific products to individual customers – Common in personal and professional services, and in industrial marketing – Mass customization is the extreme case, which involves modifying a basic product to meet the needs As a P R stunt, Dominos created and tastes of an individual customized billboards specifically consumer. targeting “holdouts” who hadn’t yet tried its new pizza versions. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Step 3: Positioning Positioning is the process by which marketers develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Steps in Positioning Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Step 1: Analyze Competitors’ Positions Understand the positioning of both direct and indirect competitors. Are your product’s benefits superior to those of competitor products? Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  Step 2: Define Your Competitive Advantage Provide a reason why consumers will perceive your product as better than the competition. Positioning Statement: An expression of a product’s positioning that is internally developed and maintained in order to support the development of marketing communication that articulates the specific value offered by a product – Successful brand positioning should align clearly with the company’s competitive advantage(s). Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Step 3: Finalize the Marketing Mix Marketing mix elements should support a distinctive brand image and value proposition for the target market. Marketing mix elements (product, price, place, and promotions) must all match the selected segment(s). Copyright © 2023 Pearson Education Ltd. All Rights Reserved.  Step 4: Evaluate Responses and Modify as Needed Repositioning establishes a new position in response to market changes. – Commonly used to change the brand image – Repositioning can breathe life into “retro” brands. Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Perceptual Map Copyright © 2023 Pearson Education Ltd. All Rights Reserved. Perceptual Map Copyright © 2023 Pearson Education Ltd. All Rights Reserved. The End Copyright © 2023 Pearson Education Ltd. All Rights Reserved.