Target Market - Part 1 PDF

Marketing Management: MKT2311: Session 05 – Part 01: Target marketing Sanju Wickramasinghe Department of Marketing Bachelor of Business Administration Degree Faculty of Management and Finance Univers...

Marketing Management: MKT2311: Session 05 – Part 01: Target marketing Sanju Wickramasinghe Department of Marketing Bachelor of Business Administration Degree Faculty of Management and Finance University of Colombo 1  Introduction to Segmenting, Targeting & Positioning “If you try to be everything to everyone, you’ll end up becoming nothing to anyone 2  Introduction to Target marketing Markets consist of buyers & they are different There are three major steps in target marketing. 3  Segmenting, targeting, and positioning (STP) refer to three marketing strategy steps designed to help the firm allocate its resources to reach its most valuable customers. It enables companies to identify the most profitable market segments, target them effectively, and create an unique value proposition. STP forms the foundation of a marketing strategy and provides a basis for decision- making on product, price, place, and promotion. 4  What is Market Segmentation? Market Segmentation can be defined as: "the act of dividing a market into distinct groups of buyers who have different needs, characteristics, or behavior and who might require separate products or marketing programs." The purpose of segmentation is to identify and serve different groups of customers more effectively by tailoring marketing efforts to their specific needs and preferences 5 Bases for Segmentation 6  Geographic Segmentation Dividing the market into different geographical units, such as nations, states, regions, counties, cities, or neighborhoods. Examples : 1. KFC and McDonald use geographical segmentation to tailor its menu offerings to local tastes and preferences. 2. Coca-Cola uses geographical segmentation to tailor its advertising campaigns to local cultural and social norms. For example, in the Middle East, Coca-Cola has launched campaigns during the holy month of Ramadan. The purpose is to connect with consumers during this important religious period. 7 Several geographic parameters (or types of market segmentation) Location This variable can impact geographic segmentation by covering a small area, like a neighborhood, or a large area like a continent, with towns, cities, states and countries in between. Examples: 1. Uniliver delivers different product portfolios – They introduced more mouth wash options for countries where people do not often use toothbrush to brush their teeth. But they promote toothbrush and toothpaste brands in Asian countries 2. Nike in the US is likely to focus on American football and baseball , while you’re unlikely to see American football or baseball commercials in Europe – you’ll see product ads for Soccer (Football in Europe) instead American football.mp4 8  Climate Involves selling products that are appropriate for the climate, weather, and season in a particular area. For example, if you’re planning a trip to Antarctica, warm clothes and boots will be crucial to keep you comfortable and safe. Therefore, if you’re a winter boots manufacturer, your product marketing strategy revolves around targeting people who are searching for holidays in that region. It's more than a jacket _ The North Face.mp4 9 In class work Think, If you need to promote winter leather jackets in Sri Lanka, how you are going to segment the market ? Which geographic parameter/s will you be using ? 10  Culture You may have to adapt your products to take account of cultural variations and sensitivities. Examples: 1. Hindus don’t eat beef — and the cow is considered sacred. Since the majority of the population follows Hinduism, there’s no (less) beef on McDonalds ’menus in India. There’s also no (less) pork menus out of respect for Muslims. 2. Also, different countries will enjoy different flavors and often have unique items, such as Thailand McDonald’s (Samurai Pork Burger) vs. UK McDonald’s (Mozzarella Dippers). 11  Population Population density or population type will help make effective marketing campaigns because you’re more likely to relate to and serve customers within your target audience groups. A brand may choose to market in cities rather than rural areas because there are simply more target buyers, and urban distribution is easier. For example, in China and Japan, capsule hotels are an increasingly popular method of accommodation for Japanese citizens who want to keep costs low. For tourists, on the other hand, demand for traditional hotels is on the up. Capsule hotel concept a hit in Milan _ AFP.mp4 Language Ex: A newspapers producer should produce Tamil language newspaper for Jaffna 12  Demographic Segmentation Dividing the market into groups based on variables (parameters) such as; Age Gender Family size or life cycle Income Occupation Education Religion Race Generation Nationality Examples : 1. Companies that sells soft drinks based on age Elephant house Nektar for children, Elephant house cream soda for youth 2. Surf excel for high income earners, sunlight for low income earners 13 What are the parameters they have used in these commercials ? Elephant House Cream Soda TVC 2017 (1).mp4 Wild Stone Intense Deos #IntensifyYourGame.mp4 MAGGI - Broad Noodles Family Pack.mp4 DFCC Credit Cards TVC - Sinhala.mp4 The Group Study.mp4 14  Psychographic Segmentation Dividing a market into different segments based on social class, lifestyle, or personality characteristics. Examples : 1. Rolex targeting the affluent and status-conscious. 2. Redbull targets different lifestyles and personalities – mainly who are enregetic, adventurous and outgoing 15  Personality Personality is the unique set of traits and behaviors that define our personal identity. Different personality traits such as, Openness: Willingness to embrace new experiences and ideas. Conscientiousness: Organized, clear-headed, and attentive to details. Extroversion: Outgoing and energized in social settings. Agreeableness: Empathetic and kind, with a tendency to avoid conflict. Neuroticism: Emotionally unstable and susceptible to negative emotions. Everyone Can Shine with New Rin - Banker.mp4  Lifestyle Lifestyle is a way to group people by the way they live life and express themselves through their activities, interests, and opinions. It can include hobbies, habits and spending patterns, and reflects what individuals truly value as they invest their time, money, and energy to meet self-defined standards. For instance, a fitness apparel company can customize its marketing messages to appeal to health-conscious individuals by emphasizing the importance of an active lifestyle and presenting their items in workout settings. B-Boy Victor _ World of Red Bull Commercial 2016.mp4 17  Behavioral Segmentation Dividing the market into groups based on variables such as: Occasions Benefits User status Usage rate Loyalty status Readiness stage Attitude toward product Examples : See how Sephora uses a “Shop by Concern,” category to find out more about what benefits and features are most important to each shopper. 18  Benefits seeker Group customers based on the benefits they're looking for in a product, service or company to encourage them to buy. This can include factors such as convenience, affordability, performance, status, and innovation. Examples: 1. buying toothpaste has several benefits: clean teeth, fresh breath and healthier gums and whiter teeth. 2. of skincare. Consumers who buy skincare products do so for various reasons. Here are some segmentation examples for the different benefits customers may prioritize: Oily skin fix Removes dark circles Smells gorgeous Price Non-irritating ingredients for sensitive skin Vegan or cruelty-free company ethics 19  Occasion Purchasing Occasion-based segmentation is often used by businesses to tailor their marketing efforts to specific occasions or events that are important to their customers. Holidays and celebrations: - consumers who purchase products or services related to holidays and celebrations such as Thanksgiving, Valentine’s Day, or Halloween. යහගුණ පිරි ආහාර සංස්කෘතීන්, ආගම් හා පරම්පරා එක්කරයි. Nestle with Avurudu -AD Films.mp4 Special events: This group purchases products or services related to special events such as weddings, birthdays, and graduations. Seasonal occasions: summer vacations, winter sports, and back-to-school. 20  Loyalty In this segmentation strategy, customers are grouped based on their past behavior, including their purchasing history and their level of engagement with your brand. Starbucks, for instance, has a loyalty program that rewards customers for purchasing using their app. An app user can collect points as they complete a Starbucks purchase and use them later on a free drink or food item. Starbucks-preview.jpg Usage Heavy users (Super users) —purchase most frequently Medium users (Average users/Mid-level users) — Customers that semi-regularly, but not very frequently, use or purchase your products (often time- or event-based) Light users — Customers that use or purchase much less than other customers, sometimes even only once 21 22 Criteria for Effective Segmentation - MASDA Measurable: The size, purchasing power, and characteristics of the segment should be measurable. Accessible: The segment should be effectively reached and served with marketing mix. Substantial: The segment should be large and profitable enough to serve. Differentiable: The segments are conceptually distinguishable and respond differently to marketing elements and programs. Actionable: Effective marketing programs can be designed for attracting and serving the segments. 23 In class activity 1. Analyze market segmentation with respect to the Siddhalepa brand 2. How an organic food producer can use segmentation and how it differs from other ordinary vegetable farmers H.W Find out some key multinational brands’ market segmentation practices 24