basic06_ppt.ppt 221KB Nov 01 2010 08:16:58 PM

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Chapter Six

Segmentation, Targeting,

and Positioning:

Building the Right Relationships

with the Right Customers

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Roadmap:

Previewing the Concepts

1. Define the three steps of target marketing: market segmentation, market targeting,

and market positioning.

2. List and discuss the major bases for segmenting consumer and business markets.

3. Explain how companies identify attractive market segments and choose a target

marketing strategy.

4. Discuss how companies position their products for maximum competitive

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6-3

Strategy

 _{Sells multiple brands}

within the same product category for detergents, soaps, and other goods.

 _{Each brand features a}

different mix of benefits and appeals to a different segment.

 _{Product modifications}

appeal to different niches

within certain segments.

P & G – Segments the Market

Case Study

The Payoff

 _{P&G generates revenues} in excessive of $4 billion in U.S. laundry detergent

market alone.

 _{Tide has 34% share of}

powder and 24% share of liquid market segments.

 _{Combined, all P&G brands} account for 75% share of powder and 55% share of liquid detergent markets.

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6-4

Steps in Target Marketing

 _{Market segmentation}

– Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors requiring separate products or marketing mixes.

 _{Target marketing}

– Evaluating each segment’s attractiveness and selecting one or more to enter.

 _{Market positioning}

– Setting the competitive positioning for the

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6-5

Market Segmentation



_{Key variables:}

– Geographic

– Demographic

– Psychographic

– Behavioral



_{No single way to segment a market.}



_{May combine more than one variable to}

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6-6

Market Segmentation



_Geographic:

– World region or country – Region of country

– City or metro size – Density or climate

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6-7

Market Segmentation



_Demographic:

– Age, gender, family size, family life cycle, income, occupation, education, race,

religion, etc.

– The most popular bases for segmenting customer groups.

– _{Easier to measure than most other types}

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6-8

Market Segmentation



_{Age and Life-Cycle Stage:}

– Example: P&G has different toothpastes for different age groups.

– _{Avoid stereotypes in promotions.} – _{Promote positive messages.}

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6-9

Market Segmentation



_Income:

– Identifies and targets the affluent for luxury goods.

– _{People with low annual incomes can be a} lucrative market.

– Some manufacturers have different grades of products for different markets.

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6-10

Market Segmentation



_{Psychographic:}

– Social class – Lifestyle

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6-11

Market Segmentation



_Behavioral:

– Occasion segmentation

• Special promotions and labels for holidays.

– (e.g., Hershey Kisses)

• Special products for special occasions. – (e.g., Kodak disposable cameras)

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6-12

Market Segmentation



_Behavioral:

– Benefits Sought

• Different segments desire different benefits from products.

– (e.g., P&G’s multiple brands of laundry

detergents to satisfy different needs in the product category)

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6-13

Market Segmentation



_Behavioral:

– User Status

• Nonusers, ex-users, potential users, first-time users, regular users

– _{Usage Rate}

• _{Light, medium, heavy} – _{Loyalty Status}

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6-14

Market Segmentation



_{Best to use multiple approaches in}

order to identify smaller, better-defined

target groups.

– _{Start with a single base and then expand}

to other bases.

– Geodemographic segmentation is becoming more common.

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6-15

Market Segmentation



_{Geodemographic:}

– Claritas, Inc.

– Potential Rating Index for Zip Markets (PRIZM)

– _{Based on U.S. Census data}

– _{Profiles on 260,000 U.S. neighborhoods} – _{62 clusters or types}

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6-16

Segmenting Business Markets



_{Consumer and business markets use}

many of the same variables for

segmentation.



_{Business marketers can also use:}

– _{Operating Characteristics} – _{Purchasing Approaches} – _{Situational Factors}

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6-17

Segmenting International

Markets



_{Factors used:}

– Geographic location – Economic factors

– _{Political and legal factors} – _{Cultural factors}



_{Intermarket segmentation:}

– _{Segments of consumers who have similar}

needs and buying behavior even though they are located in different countries.

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6-18

Requirements for Effective

Segmentation



_Measurable



_Accessible



_Substantial



_{Differentiable}



_Actionable

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6-19

Evaluating Market Segments

 _{Segment Size and Growth}

– Analyze current segment sales, growth rates, and expected profitability.

 _{Segment Structural Attractiveness}

– Consider competition, existence of substitute products, and the power of buyers and

suppliers.

 _{Company Objectives and Resources}

– Examine company skills & resources needed to succeed in that segment.

– _{Offer superior value and gain advantages over}

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6-20

Target Marketing Strategies



_{Undifferentiated (mass) marketing}

– Ignores segmentation opportunities



_{Differentiated (segmented) marketing}

– Targets several segments and designs separate offers for each



_{Concentrated (niche) marketing}

– _{Targets one or a couple small segments}



_{Micromarketing (local or individual}

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6-21

Micromarketing



_{Tailoring products and marketing}

programs to suit the tastes of specific

individuals and locations.

– Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities,

neighborhoods, specific stores.

– _{Individual Marketing:}_{Tailoring products} and marketing programs to the needs and preferences of individual customers.

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Choosing a Market Coverage

Strategy



_{Factors to consider:}

– Company resources – Product variability

– Product’s life-cycle stage – Market variability

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6-23

Socially Responsible Targeting

 _{Smart targeting helps both companies and}

consumers.

 _{Target marketing sometimes generates}

controversy and concern.

– Vulnerable and disadvantaged can be targeted.

– Cereal, cigarette, beer, and fast-food marketers have received criticism.

– Internet has raised fresh concerns about potential targeting abuses.

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6-24

Positioning for Competitive

Advantage



_{Product’s position is the way the}

product is

defined by consumers

on

important attributes, or as the place the

product occupies in consumers’ minds

relative to competing products.

– _{Perceptual position maps can help define}

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6-25

Choosing a Positioning Strategy



_{Identify a set of possible competitive}

advantages on which to build a

position.



_{Choose the right competitive}

advantages.

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6-26

Identifying Possible

Competitive Advantages



_{Key to winning target customers is to}

understand their needs better than

competitors do and to deliver more

value.



_{Competitive advantage}

_{– extent to}

which a company can position itself as

providing superior value.

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6-27

Identifying Possible

Competitive Advantages



_{Product differentiation}



_{Services differentiation}



_{Image differentiation}

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Positioning Errors



_{Underpositioning:}

– Failing to really position the company at all.



_{Overpositioning:}

– Giving buyers too narrow a picture of the company.



_{Confused Positioning:}

– Leaving buyers with a confused image of a company.

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6-29

Choosing Right Competitive

Advantages



_Important



_Distinctive



_Superior



_Communicable



_Preemptive



_Affordable



_Profitable

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Overall Positioning Strategy



_{Full positioning of the brand is called}

the brand’s

value proposition.



_{Potential value propositions include:}

– _{More for More}

– More for the Same

– _{The Same for Less} – _{Less for Much Less} – More for Less

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Communicating and Delivering

the Chosen Position



_{Company must take strong steps to}

deliver and communicate the desired

position to target consumers.



_{The marketing mix efforts must support}

the positioning strategy.



_{Must monitor and adapt the position}

over time to match changes in

consumer needs and competitors’

strategies.

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Rest Stop:

Reviewing the Concepts

1. Define the three steps of target

marketing: market segmentation, market targeting, and market positioning.

2. List and discuss the major bases for segmenting consumer and business markets.

3. Explain how companies identify

attractive market segments and choose a target marketing strategy.

4. Discuss how companies position their products for maximum competitive

(1)

Identifying Possible

Competitive Advantages

 _{Product differentiation}

 _{Services differentiation}

 _{Image differentiation}

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Positioning Errors

 _{Underpositioning:}

– Failing to really position the company at all.

 _{Overpositioning:}

– Giving buyers too narrow a picture of the company.

 _{Confused Positioning:}

(3)

Choosing Right Competitive

Advantages

 _Important

 _Distinctive

 _Superior

 _Communicable

 _Preemptive

 _Affordable

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Overall Positioning Strategy

 _{Full positioning of the brand is called}

the brand’s value proposition.

 _{Potential value propositions include:}

– _{More for More}

– More for the Same

– _{The Same for Less} – _{Less for Much Less}

(5)

Communicating and Delivering

the Chosen Position

 _{Company must take strong steps to}

deliver and communicate the desired position to target consumers.

 _{The marketing mix efforts must support}

the positioning strategy.

 _{Must monitor and adapt the position}

over time to match changes in

consumer needs and competitors’ strategies.

(6)

Rest Stop:

Reviewing the Concepts

1. Define the three steps of target

marketing: market segmentation, market targeting, and market positioning.

2. List and discuss the major bases for segmenting consumer and business markets.

3. Explain how companies identify

attractive market segments and choose a target marketing strategy.