ADM 2315 Marketing Management: Class 8 - Identifying Market Segments and Target Customers PDF

ADM 2315 | MARKETING MANAGEMENT Instructor: Dr. Yunzhijun Yu (Yuyu) Class 8 – Identifying Market Segments and Target Customers Sit together with your teammates! Agenda Starting Our Term Project: Developing a Marketing Plan Segmentation,...

ADM 2315 | MARKETING MANAGEMENT Instructor: Dr. Yunzhijun Yu (Yuyu) Class 8 – Identifying Market Segments and Target Customers Sit together with your teammates! Agenda Starting Our Term Project: Developing a Marketing Plan Segmentation, Targeting, and Positioning Definition of STP Segmentation Targeting Review: What is a Marketing Plan? A marketing plan is a written document that provides a “blueprint” of the actions required in order to achieve an organization’s marketing objectives. Not the same as a business plan (a more comprehensive document with details such as the corporate’s mission, visions, strategies, etc.). If an organization is structured around multiple strategic business units, or product/brand lines, a separate marketing plan is normally prepared for each. Why? To ensure the optimal allocation of marketing resources (time, money, and knowledge). Marketing Plan: Guidelines & Grading Rubric Make sure you read it! Group Activity: What Business Will You Focus On? Requirements: Develop a business idea – this business could be real or hypothetical. Focus on one product/service. Ensure the idea is feasible with a total capital of no more than $100,000. My recommendations: Start-up; Local (but scalable); Small but tangible Examples: a local bicycle repair shop, a student-run café, etc. What is YOUR business? Some sites that may help you with idea generations: Springwise (https://springwise.com/) Kickstarter (https://www.kickstarter.com/) Segmentation, Targeting, and Positioning Positioning For each target Segmentation Targeting segment, establish, communicate, and Identify distinct groups of Select one or more deliver the right buyers who differ in their market segments to benefit(s) for the needs and wants. enter. company’s market offering (developing a value proposition ad positioning). Market Segmentation Segmentation: the process of dividing or grouping buyers based on their needs, traits, or behaviors that might require separate marketing strategies or mixes. A market segment consists of a group of consumers who share a similar set of needs and/or profile characteristics. Four Different Types of Market Segmentation Demographic Geographic Psychographic Behavioural Segmentation Segmentation Segmentation Segmentation Age Zip code Value Usage Life-cycle stage City Goal Purchasing and Gender Province Need disposing habits Income Nation Lifestyle Loyalty status Race and culture Neighborhood Personality Buyer-readiness Time zone Interest stage Climate Belief Actions taken on a website/in a physical shop Requirements for Effective Segmentation Effective Market Segments Must be: Measurable Accessible Substantial Differentiable Actionable Requirements for Effective Segmentation Measurable: the market size, purchasing power, and profiles of the segments need to be measurable. “Parents in Fredericton with children aged 2-12, household incomes of $60,000+.” “People who are enthusiastic about dressing their kids up.” Requirements for Effective Segmentation Accessible: your customers can be reached and served. “Parents of young children who live in Fredericton, NB.” “Parents of young children who live in third-world countries with limited access to Internet.” Requirements for Effective Segmentation Substantial: the market segments are large or profitable enough to serve. “Parents of children under the age of 10, looking for eco-friendly or sustainable clothing options.” “Parents in Fredericton looking for Halloween costumes for their newborns.” Requirements for Effective Segmentation Differentiable: the segments should be conceptually distinguishable and respond differently to different marketing mix elements “Parents who prefer trendy, designer kids’ clothing.” (vs. “Parents who prioritize affordable, durable clothing.”) “Parents of boys vs. Parents of girls in Fredericton.” Requirements for Effective Segmentation Actionable: effective programs can be developed in actionable terms. “Parents who shop primarily online and use social media to discover kids’ clothing trends.” “Parents who want their children to ‘stand out’.” Group Activity: Segmentation Brainstorm and list 3-5 possible market segments using different segmentation criteria (e.g., geographic, demographic, psychographic, and behavioural). Some useful websites and external sources: Statistics Canada: https://www.statcan.gc.ca/en/start IBIS World (will need to be accessed through UNB Library) Identifying Target Customers Targeting: the process of identifying customers/segments for whom they company will optimize its offering. There are many techniques for identifying target customers! The Logic of Targeting Mass marketing: (sometimes called undifferentiated marketing) the firm ignores segment differences and goes after the whole market with one offer. Designs a marketing program for a product with a superior image that can be sold to the broadest number of buyers via mass distribution and mass communications. The Logic of Targeting Targeted marketing: sell different products to all the different segments of the market. One-to-one approach Mass customization – to meet each customer’s requirements. Strategic vs. Tactical Targeting Strategic targeting Focuses on customers whose needs the company can fulfill, by ensuring that its offerings are customized to Goal: Recruiting More International their needs. Students from Southeast Asia Higher-level, overarching concept that guides the business’s long-term Strategic targeting: we will focus our decisions about which markets or efforts on recruiting high-achieving, segments to serve. middle-to-upper income international students from Southeast Asia. Tactical targeting Tactical targeting: we will run localized Identifies the ways in which the digital marketing campaigns (e.g., company can reach these Instagram ads in Vietnam, Malaysia, and strategically important customers. Indonesia). Assessing Effectiveness of Strategic Targeting Target compatibility Can the company create superior value for target customers? Business infrastructure Access to scarce resources Skilled employees Technological expertise … What is the company’s core competency? Target attractiveness Can these customers create superior value for the company? Monetary value vs. strategic value Implementing Tactical Targeting Defining the customer profile: Demographic factors Geographic factors Behavioral factors Psychographic factors Bringing segments to life: Personas: detailed profiles of one, or perhaps a few, hypothetical target consumers, imagined in terms of demographic, psychographic, geographic, or other descriptive attitudinal or behavioural information. Group Activity: What is Your Customer Persona? Tip: You can include a customer persona in the appendix of your marketing plan! Next Class… Class 9 – Crafting a customer value proposition and positioning