Segmentation, Targeting, and Positioning PDF

Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers  “Our key to market leadership is effective market segmentation, targeting and dominating one market segment at a time.” -Simplicio “Jun” Umali Jr....

Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers  “Our key to market leadership is effective market segmentation, targeting and dominating one market segment at a time.” -Simplicio “Jun” Umali Jr. President, Gardenia Bakeries Phils., Inc. 8 -  Objectives Be able to define the three steps of target marketing: market segmentation, target marketing, and market positioning. Understand the major bases for segmenting consumer and business markets. 8 -  Objectives Know how companies identify attractive market segments and how they choose a target marketing strategy. Comprehend how companies position their products for maximum competitive advantage. 8 -  Definition Market Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes. 8 - Two Important Features 1. It defines needs and wants on which the groups strongly differ; 2. These needs and wants must be capable of being served by the firm. 8 -  Example Proctor and Gamble, has four types of toilet soaps: 1. Olay beauty bar which addresses the younger- looking skin need of women 2. Safeguard as the family health soap with superior skin germ protection 3. Zest for active and on-the-go young adults 4. Ivory in the mild soap/sensitive skin category. 8 -  Market Segmentation Topics Geographical segmentation Marketing mixes are customized geographically Segmenting Consumer Demographic segmentation Markets Most popular segmentation Segmenting Business Demographics are closely Markets related to needs, wants and Segmenting International usage rates Markets Psychographic segmentation Requirements for Lifestyle, social class, and Effective Segmentation personality-based segmentation Behavioral segmentation Typically done first 8 - Market Segmentation Geographic Segmentation Variables World Region Neighborhood or Country City or Region Metro Size State City Density Climate 8 -  Market Segmentation Demographic Segmentation Variables Age Occupation Gender Education Family size Religion Family life cycle Race Income Generation Nationality 8 - Market Segmentation Behavioral Segmentation Variables Occasions User Rates Benefits Loyalty Status User Status Readiness Stage Attitude Toward the Product 8 -  Market Segmentation Topics Demographic segmentation Industry, company size, location Segmenting Consumer Operating variables Markets Technology, usage status, Segmenting Business customer capabilities Markets Purchasing approaches Segmenting International Situational factors Markets Urgency, specific application, Requirements for size of order Effective Segmentation Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty 8 -  Market Segmentation Topics Geographic segmentation Location or region Segmenting Consumer Economic factors Markets Population income or level of Segmenting Business economic development Markets Political and legal factors Segmenting International Type / stability of government, Markets monetary regulations, amount Requirements for of bureaucracy, etc. Effective Segmentation Cultural factors Language, religion, values, attitudes, customs, behavioral patterns 8 -  Market Segmentation Topics Measurable Size, purchasing power, and Segmenting Consumer profile of segment Markets Accessible Segmenting Business Can be reached and served Markets Substantial Segmenting International Large and profitable enough to serve Markets Requirements for Differentiable Respond differently Effective Segmentation Actionable Effective programs can be developed 8 -  Target Marketing Evaluating Market Segments Segment size and growth Segment structural attractiveness Level of competition Substitute products Power of buyers Powerful suppliers Company objectives and resources 8 -  Target Marketing Target Marketing Strategies Undifferentiated (mass) marketing Differentiated (segmented) marketing Concentrated (niche) marketing Micromarketing (local or individual) marketing 8 -  Target Marketing Choosing a Target-Marketing Strategy Requires Consideration of: Company resources The degree of product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies 8 -  Positioning Positioning: The place the product occupies in consumers’ minds relative to competing products. Typically defined by consumers on the basis of important attributes. 8 -  Positioning Choosing a Positioning Strategy: Identifying possible competitive advantages Products, services, channels, people or image can be sources of differentiation. Choosing the right competitive advantage How many differences to promote? Unique selling proposition Positioning errors to avoid Which differences to promote? 8 -  Positioning Choosing a Positioning Strategy: Selecting an overall positioning strategy More for More Value Proposition More for the Same Value Proposition The Same for Less Value Proposition Less for Much Less Value Proposition More for Less Value Proposition 8 -  Positioning Choosing a Positioning Strategy: Developing a positioning statement Positioning statements summarize the company or brand positioning EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of- difference). Communicating the chosen position 8 -