Strategic Marketing Segmentation and Positioning PDF

Facultad de Comercio, Turismo y Ciencias Sociales “Jovellanos” STRATEGIC MARKETING U5 T5 segmentation and Positioning TOC 5.1 Market segmentation 5.2 Market targeting 5.3 Differentiation...

Facultad de Comercio, Turismo y Ciencias Sociales “Jovellanos” STRATEGIC MARKETING U5 T5 segmentation and Positioning TOC 5.1 Market segmentation 5.2 Market targeting 5.3 Differentiation and positioning 1  I Introduction I Introduction It is difficult to serve a whole market. Buyers may be: – Too numerous – Too widely scattered – Too varied in their needs and buying practise A company must identify the parts of the market that it can serve best and most profitably 2  5.1 Market Segmentation Markets within a market 5.1 Market segmentation Market segmentation – Dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes. – Consumers differ in: Wants Divide large & heterogeneous Resources Market markets into smaller segments Locations Segmentation that can be reached more Buying attitudes efficiently and effectively Buying practices 3 5.1 Market segmentation - consumer markets Segmenting consumer markets: – There is no single way to segment a market – Several variables to segment: Geographic Demographic Psychographic Behavioural 5.1 Market segmentation - consumer markets Geographic segmentation: – Dividing the market into different geographical units (nations, regions, cities or neighbourhoods) Tesco Metro: located in city centres and high streets of small towns Tesco Express: neighbourhood convenience stores -> food with an emphasis on higher-margin products and everyday essentials (and a petrol station) One Stop: very small stores that do not even carry the Tesco name 4 5.1 Market segmentation - consumer markets Demographic segmentation: – Dividing the market into groups based on age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality. – Age and life-cycle stage: Oral B – Gender: L’Oreal – Income: American Express 5.1 Market segmentation - consumer markets Psychographic segmentation: – Dividing buyers into different groups based on: Social class Lifestyle Personality characteristics 5  5.1 Market segmentation - consumer markets Behavioural segmentation – Dividing buyers into groups based on their knowledge, attitues, uses or responses to a product : Occasions: Samsonite User status: non-users, ex-users, first time users, regular uses Usage rate: light users, medium users, heavy users. Printers. Loyalty status: high loyalty users, medium loyalty users, no loyals. 5.1 Market segmentation - business markets Primary segmentation variables for business markets: – Demographics: – Personal characteristics: Industry Loyalty to their suppliers Company size Buyer seller similarities Location Attitudes toward risk – Operating variables: – Situational factors: Technology Urgency of demand User/non user status Size of order Customer capabilities – Purchasing approaches: Nature of existing relationships (with other suppliers) General purchase policies (leasing – purchase – rent) Purchasing criteria: quality, price, service 6 5.1 Market segmentation Measu rable Actionable Accessible Requirements for effective segmentation Differen Substantial tiable 5.2 Market Targeting Aim… 7  5.2 Market targeting Target market: – consists of a set of buyers who share common needs or characteristics that the company decides to serve. Evaluating market segments: – Segment size and growth – Segment structural attractiveness – Company objectives and resources 5.2 Market targeting Selecting market segments: – Why don’t we view every buyer as a separate target?. The trade-off: Economies of scale Value creation UNDIFFEREN DIFFEREN CONCEN MICRO TIATED TIATED TRATED MARKETING Targeting Targeting Broadly Narrowly 8 5.2 Market targeting Undifferentiated marketing: – aka Mass Marketing. – Centering on what is common amongst consumers – Targeting the whole market with one offer – Problem: it is difficult to compete with more focused firms All buyers in MARKETING MIX 1 segment 5.2 Market targeting Differentiated Marketing: – aka Segmented Marketing. – Centering on different needs and wants of several segments – Mean several Marketing Plans, Marketing Research, Advertising programs and brand building MARKETING MIX 1 Segment 1 MARKETING MIX 2 Segment 2 MARKETING MIX 3 Segment 3 9 5.2 Market targeting Concentrated Marketing: – aka Niche Marketing (when segment is small). – Centering on needs and wants of one segment – Useful when company resources are limited. – Internet has opened a door for Niche Marketing companies targeting longtailers MARKETING MIX Segment 1 Segment 2 Segment 3 5.2 Market targeting Micromarketing: – Tailoring offers to meet the needs of specific individuals and locations. – Local marketing: Eroski Hypermarkets and local food products. – Individual marketing: aka One-To-One Marketing Relationship marketing taken to the extreme MARKETING MIX Segment 1 Segment 2 Segment 3 10 5.2 Market targeting How to choose a targeting strategy: – Company resources: if low… concentrated makes sense – Product variability: uniform products call for undifferentiation – Product’s life-cycle: Undifferentiation on introduction Differentiation and micromarketing on maturity – Market variability: If consumers are alike: undifferentiation – Competitor’s strategy: If competition is differentiated, undifferentiation can be suicidal 5.3 Differentiation and positioning 11 5.3 Differentiation and positioning Product position: – The way the product is definted by consumers on important attributes – The place the product occupies in consumers’ minds relative to competing products – “Products are created in the factory. Brands are created in the mind”. A positioning map – obtained through Market Research 12 5.3 Differentiation and positioning The three steps: Identify sources of differentiation Choose the right competitive advantages Select an overall positioning strategy 5.3 Differentiation and positioning Identify sources of differentiation: Product Services Channels People Image 13 5.3 Differentiation and positioning Choose the right competitive advantages: – How many: The Unique Selling Proposition (Rosser Reves) Succesful examples of several competitive advantages: El Corte Inglés – Which ones: Those that are: Important Distinctive Superior Communicable Not easy to copy Affordable Profitable 5.3 Differentiation and positioning Select an overall positioning strategy 14 5.3 Differentiation and positioning Developing a positioning statement: – To (target segment and need) our (brand) is (concept) that (point of difference). 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