CHOOSING VALUE

MBA 649 : Marketing ManagementM Wahidul Islam

Fall 2014

LECTURE 6

PART 1SEGMENTATION

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-3BABY BOOMERS: A LUCRATIVE MARKET

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-4EFFECTIVE TARGETING REQUIRES…

Identify and profile distinct groups of buyers who differ in their needs and preferences

Select one or more market segments to enter Establish and communicate the distinctive

benefits of the market offering

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-5FORD’S MODEL T FOLLOWED A MASS MARKET APPROACH

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-6FOUR LEVELS OF MICROMARKETING

Segments

Local areas Individuals

Niches

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-7WHAT IS A MARKET SEGMENT?

A market segment consists of a group of customers who share a similar set of needs

ad wants.

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-8PREFERENCE SEGMENTS

Homogeneous preferences exist when consumers want the same things

Diffused preferences exist when consumers want very different things

Clustered preferences reveal natural segments from groups with shared preferences

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-9NICHE MARKETERS

Enterprise Rent-A-Cartargets the insurance-replacement market

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BASKIN ROBBINS FOCUSES ON LOCAL MARKETING

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-11WHAT IS CUSTOMERIZATION?

Customerization combines operationally driven mass

customization with customized marketing in a way that empowers

consumers to design the product and service offering of their choice.

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SEGMENTING CONSUMER MARKETS

GeographicGeographic

DemographicDemographic

PsychographicPsychographic

BehavioralBehavioral

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-13

DEMOGRAPHIC SEGMENTATION

Age and Life CycleAge and Life Cycle

Life StageLife Stage

GenderGender

IncomeIncome

GenerationGeneration

Social ClassSocial Class

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TOYOTA SCION TARGETS GEN Y CONSUMERS

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DOVE TARGETS WOMEN

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BEHAVIORAL SEGMENTATION

Decision Roles Initiator Influencer Decider Buyer User

Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

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THE BRAND FUNNEL ILLUSTRATES VARIATIONS IN THE BUYER-READINESS STAGE

Aware Ever tried Recent trial Occasional user Regular user Most often used

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LOYALTY STATUS

Switchers

Shifting loyals

Split loyals

Hard-core

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FIGURE 8.3 BEHAVIORAL SEGMENTATION BREAKDOWN

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THE CONVERSION MODEL

Convertible Shallow Average Entrenched

Strongly

unavailableAmbivalent Available

Weakly

unavailable

Users Nonusers

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SEGMENTING FOR BUSINESS MARKETS

DemographicDemographic

Operating VariableOperating Variable

Purchasing ApproachesPurchasing Approaches

Situational FactorsSituational Factors

PersonalCharacteristics

PersonalCharacteristics

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STEPS IN SEGMENTATION PROCESS

Needs-based segmentation

Segment identification

Segment attractiveness

Segment profitability

Segment positioning

Segment acid test

Marketing-Mix

Strategy

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EFFECTIVE SEGMENTATION CRITERIA

MeasurableMeasurable

SubstantialSubstantial

AccessibleAccessible

DifferentiableDifferentiable

ActionableActionable

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FIGURE 8.4 PATTERNS OF TARGET MARKET SELECTION

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FIGURE 8.4 PATTERNS OF TARGET MARKET SELECTION

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FIGURE 8.4 PATTERNS OF TARGET MARKET SELECTION

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CREST WHITESTRIPS FOLLOWS A MULTISEGMENT STRATEGY

REFERENCES

Chapter – 4 Creating Customer Value, Satisfaction, and Loyalty Kotler, Philip, Keller, Kevin L., Koshy, Abraham

and Jha, Mithileshwar (2013-14) Marketing Management: A South Asian Perspective (14thEdition) Pearson Education Inc

PART 2Dealing with Competition

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FIGURE 1.1 FIVE FORCES DETERMINING SEGMENT STRUCTURAL ATTRACTIVENESS

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COMPETITOR ANALYSIS

What is a Competitor Analysis?A competitor analysis is a detailed analysis of a firm’s

competition. It helps a firm understand the positions of its major

competitors and the opportunities that are available.A competitive analysis grid is a tool for organizing the

information a firm collects about its competitors.

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IDENTIFYING COMPETITORS

Types of Competitors New Ventures Face

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SOURCES OF COMPETITIVE INTELLIGENCE1 OF 3

Collecting Competitive IntelligenceTo complete a competitive analysis grid, a firm must

first understand the strategies and behaviors of its competitors.

The information that is gathered by a firm to learn about its competitors is referred to as competitive intelligence.

A new venture should take care that it collects competitive intelligence in a professional and ethical manner.

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SOURCES OF COMPETITIVE INTELLIGENCE2 OF 3

Ethical ways to obtain information about competitors

• Attend conferences and trade shows.• Purchase competitor’s products.• Study competitors’ Web sites.• Set up Google and Yahoo! e-mail alerts.• Read industry-related books, magazines, and Web sites.• Talk to customers about what motivated them to buy your product as opposed to your competitor’s product.

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SOURCES OF COMPETITIVE INTELLIGENCE3 OF 3

• Many companies attend trade shows to not only display their products, but to see what their competitors are up to.• This is a photo of the the 2008 Consumer Electronics Trade Show in Las Vegas.

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COMPLETING A COMPETITIVE ANALYSIS GRID

Competitive Analysis GridA tool for organizing the information a firm collects

about its competitorsA competitive analysis grid can help a firm see how it

stakes up against its competitors, provide ideas for markets to pursue, and identify its primary sources of competitive advantage.

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COMPETITIVE A ANALYSIS GRID FOR EXPRESSO FITNESS

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FIGURE 11.6 SIX TYPES OF DEFENSE STRATEGIES

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FIGURE 11.7 OPTIMAL MARKET SHARE

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OTHER COMPETITIVE STRATEGIES

Market

Challengers

Market

NichersMarket

Followers

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MARKET CHALLENGER STRATEGIES

Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

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MARKET FOLLOWER STRATEGIES

Counterfeiter

Cloner

Imitator

Adapter

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NICHE SPECIALIST ROLES

End-User Specialist Vertical-Level Specialist Customer-Size Specialist Specific-Customer Specialist Geographic Specialist

Product-Line Specialist Job-Shop Specialist Quality-Price Specialist Service-Specialist Channel Specialist

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BALANCING ORIENTATIONS

Competitor-

Centered

Customer-

Centered

REFERENCES

Chapter – 4 Creating Customer Value, Satisfaction, and Loyalty Kotler, Philip, Keller, Kevin L., Koshy, Abraham

and Jha, Mithileshwar (2013-14) Marketing Management: A South Asian Perspective (14thEdition) Pearson Education Inc