Unit 3: Segmentation, Targeting and Positioning PDF

UNIT 3: SEGMENTATION, TARGETING AND POSITIONING 1. Segmentation: Consumer, international and business markets. Market segmentation requires dividing a market into smaller segments with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes....

UNIT 3: SEGMENTATION, TARGETING AND POSITIONING 1. Segmentation: Consumer, international and business markets. Market segmentation requires dividing a market into smaller segments with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes. A target market is a set of buyers who share common needs or characteristics that the company decides to serve. Segmenting consumer markets: - Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, cities or even neighbourhoods. - Demographic segmentation divides the market into segments based on variables such as age, life- cycle stage, gender, income, occupation, education, religion, ethnicity and generation. - Age and life-cycle segmentation divides a market into different age and life-cycle groups. - Gender segmentation divides a market into different segments based on gender. - Income segmentation divides a market into different income segments. - Psychographic segmentation divides a market into different segments based on social class, lifestyle or personality characteristics. - Behavioural segmentation divides the market into segments based on consumer knowledge, attitudes, uses of a product or responses to a product. Segmenting business markets: Consumer and business marketers use many of the same variables to segment their markets. Additional variables include: - Customer operating characteristics - Purchasing approaches - Situational factors - Personal characteristics Segmenting international markets: - Geographic location (Western Europe, LatAm…) - Economic factors (Income levels or overall economic development) - Political and legal factors (type and government stability) - Cultural factors (language, religion…) Intermarket segmentation involves forming segments of consumer who have similar needs and buying behaviours even though they are located in different countries. 2. Market targeting: attractiveness, assessment and selection. Requirements for Effective Segmentation: - Measurable - Differentiable - Accessible - Actionable - Substantial  Evaluating Market Segments: - Segment size and growth - Segments structural attractiveness - Company objectives and resources o Undifferentiated marketing targets the whole market with one offer. Mass marketing focuses on common needs rather than what´s different. o Differentiated marketing targets several different market segments and designs separate offers for each. Goal is to achieve higher sales and stronger position. More expensive than undifferentiated marketing. o Concentrated marketing targets a large share of a smaller market. Limited company resources. Knowledge of the market. More effective and efficient. o Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Local marketing and individual marketing. o Local marketing involves tailoring brands and promotion to the needs and wants of local customer segments (cities, neighbourhoods, stores). o Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers. Also known as one-to-one marketing – mass customization. 3. Differentiation and positioning. Differentiation: Differentiate market offers to create value. Company value proposition. Positioning: Place that the brand occupies in the consumer´s mind. A competitive advantage should be: 1. Important 2. Distinctive 3. Superior 4. Communicable 5. Pre-emptive 6. Affordable 7. Profitable