Description
Various steps in segmentation, targeting and positioning, levels of market segmentation, positioning strategies, BCG matrix.
1
Market Segmentation, Targeting and Positioning
The Starting Point
2
?
? 1.
Mass Marketing:
The Seller engages in – Mass marketing>mass production>mass distribution>and mass promotion
ONE PRODUCT FO ALL BUYERS.
It creates the largest potential market>leads to lower costs>lower prices>higher margins
Segment Marketing
3
?
?
?
?
Role of Marketer The marketer does not create the segments The marketer identifies the segments and decide which one to target The company can better design>price>disclose& deliver the product to satisfy the target market.
Benefits of Segmentation
4
? ? ? ?
Effective use of resources Gain a focus Create Value for a target market Positioning
5
Steps in Market Segmentation, Targeting, and Positioning
1. Identify bases for segmenting the market 2. Develop segment profiles
Market Segmentation
Market Targeting
3. Develop measure of segment attractiveness 4. Select target segments 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
Market Positioning
Step 1. Market Segmentation Levels of Market Segmentation
6
Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
(no segmentation, i. e. a commodity)
Different products to one or more segments
Same product to all consumers
Mass Marketing
Segment Marketing
(some segmentation, i.e. Thumsup)
Steps in Market Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify segmentation variables and segment the market
2. Develop profiles of resulting segments
Market Targeting
3. Evaluate attractiveness of each segment 4. Select the target segment(s)
Market Positioning
5. Identify possible positioning concepts for each target segment
6. Select, develop, and communicate the chosen positioning concept
Basic Market-Preference Patterns
(a) Homogeneous preferences (b) Diffused preferences (c) Clustered preferences
Creaminess
Sweetness
Sweetness
Creaminess
Sweetness
Creaminess
Step 2. Market Segmentation
Levels of Market Segmentation
Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments (more segmentation) Micromarketing Products to suit the tastes of individuals and locations (complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers
Bases for Segmenting Consumer Markets
Geographic
Region, City or Metro Size, Density, Climate
Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits, Uses, or Attitudes
Step 3. Market Segmentation
11
Geographic Segmentation
International
National
Regional/City
Geographic Bases
?
Region
• Density
• Climate
• Population
Step 4. Market Segmentation
Bases for Segmenting Business Markets
Personal Characteristics Demographics
Situational Factors
Bases for Segmenting Business Markets
Operating Characteristics
Purchasing Approaches
Step 5. Market Segmentation
14
Demographic Segmentation
?
Dividing the market into groups based on variables such as: ? Age ? Gender ? Family size or life cycle ? Income ? Occupation ? Education ? Religion ? Race ? Generation ? Nationality
Step 6. Market Segmentation
15
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
Step 7. Market Segmentation
16
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
Behavioral Bases
?
User Status & Brand Loyalty
• Personality/Lifestyle • Social Class • • • • Occasion Readiness to Buy Benefits Sought Usage Rate
Step 8. Market Segmentation
Segments must respond differently to different marketing mix elements & programs
Requirements
18
for effective segmentation
• Size, purchasing power, profiles of segments can be measured.
Measurable
Accessible
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve. • Effective programs can be designed to attract and serve the segments.
Substantial
Actionable
Evaluating Market Segments
19
? ?
?
Segment size and growth Segment structural attractiveness Company objectives and resources
Step 9. Market Targeting
20
Market Coverage Strategies
A. Undifferentiated Marketing
Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix
B. Differentiated Marketing
Market
Segment 1
Segment 2 Segment 3
C. Concentrated Marketing
Segment 1 Segment 2 Segment 3
Step 10. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s). Look for Competitive Advantages.
22
Choosing a market-coverage strategy
Company resources ? Degree of product homogeneity ? Market homogeneity ? Competitors’ strategies
?
Five Patterns of Target Market Selection
Single-segment concentration
M1 M2 M3 P1 P2 P1 P2
M1 M2 M3
P1 P2
Selective specialization
Product specialization
M1 M2 M3
P3
P3
Market specialization
P3
Full market coverage
M1 M2 M3 P = Product M = Market P1 P1
M1 M2 M3
P2
P3
P2
P3
Step 11. Market Targeting
Company Resources Product Variability
Choosing a Market-Coverage Strategy
Product’s Life-Cycle Stage Market Variability
Competitors’ Marketing Strategies
designing the company’s offering and image to occupy a distinctive place in the the target market’s mind.
Positioning is the act of
26
Step 12: Positioning for Competitive Advantage
?
Product’s Position - the way the product is defined by consumers on important attributes the place the product occupies in consumers’ minds relative to competing products. Marketers must:
? Plan
positions to give their products the greatest advantage in selected target markets
Positioning Strategies
27
?
?
? ? ? ?
Positioning by specific product attributes Positioning by benefits Positioning for user category Positioning for usage occasion Positioning against another competitors Positioning against another product class
28
Steps to Choosing and Implementing a Positioning Strategy
Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation. ? Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP). ? Step 3. Communicating and Delivering the Chosen Position.
?
The BCG Competitive Advantage Matrix
Number of Approaches to Achieve Advantage
Few Many Specialized
Size of the Advantage
Large
Volume
Small
Stalemated
Fragmented
Product Differentiation
30
Physical attributes ? Service differentiation ? Personnel differentiation ? Location ? Image differentiation
?
Product Differentiation
Form
Features
Performance
Quality
Conformance Quality
Durability
Reliability
Repairability
Style
Design
Services Differentiation
Ordering Ease
Installation
Customer Consulting
Miscellaneous Services
Delivery
Customer Training
Maintenance & Repair
Which differences to promote?
33
?
?
? ?
?
? ?
Important to customers Distinctive Superior Communicable to customers Preemptive Affordable Profitable
Image Differentiation
Media Atmosphere
Symbols
Events
Important Profitable Distinctive
Differences Worth Establishing
Affordable Preemptive Superior
Perceptual Map
Positioning map of service level versus price. Source:
MARG, 2007
36
Positioning Strategies
?
Product Attributes
• Benefits, Problem Solutions & Basic Needs •Cholesterol Free Oil
hara • • Specific Use : Gift for all Events Titan • Against Other Products: Tata salt Vs. Captain Cook • Product User :Fashion loving , Well to do Consumers :Vimal fabrics • Against a Competitor •Price & Quality
doc_801305073.ppt
Various steps in segmentation, targeting and positioning, levels of market segmentation, positioning strategies, BCG matrix.
1
Market Segmentation, Targeting and Positioning
The Starting Point
2
?
? 1.
Mass Marketing:
The Seller engages in – Mass marketing>mass production>mass distribution>and mass promotion
ONE PRODUCT FO ALL BUYERS.
It creates the largest potential market>leads to lower costs>lower prices>higher margins
Segment Marketing
3
?
?
?
?
Role of Marketer The marketer does not create the segments The marketer identifies the segments and decide which one to target The company can better design>price>disclose& deliver the product to satisfy the target market.
Benefits of Segmentation
4
? ? ? ?
Effective use of resources Gain a focus Create Value for a target market Positioning
5
Steps in Market Segmentation, Targeting, and Positioning
1. Identify bases for segmenting the market 2. Develop segment profiles
Market Segmentation
Market Targeting
3. Develop measure of segment attractiveness 4. Select target segments 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
Market Positioning
Step 1. Market Segmentation Levels of Market Segmentation
6
Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
(no segmentation, i. e. a commodity)
Different products to one or more segments
Same product to all consumers
Mass Marketing
Segment Marketing
(some segmentation, i.e. Thumsup)
Steps in Market Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify segmentation variables and segment the market
2. Develop profiles of resulting segments
Market Targeting
3. Evaluate attractiveness of each segment 4. Select the target segment(s)
Market Positioning
5. Identify possible positioning concepts for each target segment
6. Select, develop, and communicate the chosen positioning concept
Basic Market-Preference Patterns
(a) Homogeneous preferences (b) Diffused preferences (c) Clustered preferences
Creaminess
Sweetness
Sweetness
Creaminess
Sweetness
Creaminess
Step 2. Market Segmentation
Levels of Market Segmentation
Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments (more segmentation) Micromarketing Products to suit the tastes of individuals and locations (complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers
Bases for Segmenting Consumer Markets
Geographic
Region, City or Metro Size, Density, Climate
Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits, Uses, or Attitudes
Step 3. Market Segmentation
11
Geographic Segmentation
International
National
Regional/City
Geographic Bases
?
Region
• Density
• Climate
• Population
Step 4. Market Segmentation
Bases for Segmenting Business Markets
Personal Characteristics Demographics
Situational Factors
Bases for Segmenting Business Markets
Operating Characteristics
Purchasing Approaches
Step 5. Market Segmentation
14
Demographic Segmentation
?
Dividing the market into groups based on variables such as: ? Age ? Gender ? Family size or life cycle ? Income ? Occupation ? Education ? Religion ? Race ? Generation ? Nationality
Step 6. Market Segmentation
15
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
Step 7. Market Segmentation
16
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
Behavioral Bases
?
User Status & Brand Loyalty
• Personality/Lifestyle • Social Class • • • • Occasion Readiness to Buy Benefits Sought Usage Rate
Step 8. Market Segmentation
Segments must respond differently to different marketing mix elements & programs
Requirements
18
for effective segmentation
• Size, purchasing power, profiles of segments can be measured.
Measurable
Accessible
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve. • Effective programs can be designed to attract and serve the segments.
Substantial
Actionable
Evaluating Market Segments
19
? ?
?
Segment size and growth Segment structural attractiveness Company objectives and resources
Step 9. Market Targeting
20
Market Coverage Strategies
A. Undifferentiated Marketing
Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix
B. Differentiated Marketing
Market
Segment 1
Segment 2 Segment 3
C. Concentrated Marketing
Segment 1 Segment 2 Segment 3
Step 10. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s). Look for Competitive Advantages.
22
Choosing a market-coverage strategy
Company resources ? Degree of product homogeneity ? Market homogeneity ? Competitors’ strategies
?
Five Patterns of Target Market Selection
Single-segment concentration
M1 M2 M3 P1 P2 P1 P2
M1 M2 M3
P1 P2
Selective specialization
Product specialization
M1 M2 M3
P3
P3
Market specialization
P3
Full market coverage
M1 M2 M3 P = Product M = Market P1 P1
M1 M2 M3
P2
P3
P2
P3
Step 11. Market Targeting
Company Resources Product Variability
Choosing a Market-Coverage Strategy
Product’s Life-Cycle Stage Market Variability
Competitors’ Marketing Strategies
designing the company’s offering and image to occupy a distinctive place in the the target market’s mind.
Positioning is the act of
26
Step 12: Positioning for Competitive Advantage
?
Product’s Position - the way the product is defined by consumers on important attributes the place the product occupies in consumers’ minds relative to competing products. Marketers must:
? Plan
positions to give their products the greatest advantage in selected target markets
Positioning Strategies
27
?
?
? ? ? ?
Positioning by specific product attributes Positioning by benefits Positioning for user category Positioning for usage occasion Positioning against another competitors Positioning against another product class
28
Steps to Choosing and Implementing a Positioning Strategy
Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation. ? Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP). ? Step 3. Communicating and Delivering the Chosen Position.
?
The BCG Competitive Advantage Matrix
Number of Approaches to Achieve Advantage
Few Many Specialized
Size of the Advantage
Large
Volume
Small
Stalemated
Fragmented
Product Differentiation
30
Physical attributes ? Service differentiation ? Personnel differentiation ? Location ? Image differentiation
?
Product Differentiation
Form
Features
Performance
Quality
Conformance Quality
Durability
Reliability
Repairability
Style
Design
Services Differentiation
Ordering Ease
Installation
Customer Consulting
Miscellaneous Services
Delivery
Customer Training
Maintenance & Repair
Which differences to promote?
33
?
?
? ?
?
? ?
Important to customers Distinctive Superior Communicable to customers Preemptive Affordable Profitable
Image Differentiation
Media Atmosphere
Symbols
Events
Important Profitable Distinctive
Differences Worth Establishing
Affordable Preemptive Superior
Perceptual Map
Positioning map of service level versus price. Source:
MARG, 2007
36
Positioning Strategies
?
Product Attributes
• Benefits, Problem Solutions & Basic Needs •Cholesterol Free Oil
hara • • Specific Use : Gift for all Events Titan • Against Other Products: Tata salt Vs. Captain Cook • Product User :Fashion loving , Well to do Consumers :Vimal fabrics • Against a Competitor •Price & Qualitydoc_801305073.ppt