chapter 5 –segmentation and product positioning
TRANSCRIPT
8/3/2019 Chapter 5 –Segmentation and product positioning
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Market Segmentation
it is the process of dividing a
market into groups of similar
consumers.
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Benefits of Market
Segmentation : It enables the company to develop a positioning and
marketing mix strategy that can satisfy a smaller,more focused range of customer¶s needs and wants
It leads to a more efficient use of resources,especially in communications and distribution.
It reduces competitive pressures because the firm isfocused on its niche or a combination of niche
groups seeking similar benefits It enables the company to have a better
understanding of its target market and employ thebest ways to reach them instead of trying to serve all
or different markets at the same time.
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The Market Segmentation and
Positioning Process: Scan the Firm¶s Situation
Determine consumer needs and wants
Segment the market Develop product positioning
Choose segmentation strategy
Implement
Segmentation
Strategy
Undertake periodic Evaluation
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Scan the firm·s current situation
In undertaking this phase , the firm has to lookinto strengths and weaknesses and consider opportunities and threats
Competitors have to be studied closely in thecontext of the global, local, and industrydynamics currently interplaying.
The firm has to look into its grand goals andfunctional objectives vis-a-vis human, financial,technology and information resources and
operational implementation.
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Determine Consumer Needs and
Wants Accurate knowledge of consumer needs and wants
are critical to the adoption of valuable marketing
strategies.
Consumer needs and wants are evolving and will
be commonly used for segmentation purposes.
Changes in lifestyles. Adjustments in group norms
and revolution in technology are some significant
modifiers of cosumer needs and wants.
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Segment the MarketThe market segmentation process The process of segmenting the market may be
conducted by using either or both general ways.
Approaches: A priori Segmentation - the marketing manager
established a criterion for marketsegmentation even before any marketresearch has been conducted.
Post hoc Segmentation ± involves initially undertakingmarket research where the bases of marketsegmentation will be from the results of research findings.
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Bases for Market Segmentation :
Benefits Segmentation
Psychographic Segmentation
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Traditional Segmentation Bases
of Consumer Needs:Segmentation
Base
Examples of Market Segments
Geographic
Continents Asia, North America, South America, Europe and Africa
Regions Southeast Asia, Caribbean, Eastern Europe
Type of
Economy
Developed, Developing, underdeveloped
Cities Florida, London, Manila, Tokyo, Singapore
Provinces Cebu, Davao, Ilocos Norte, Samar, Butuan
Type of
Settlement
Urban, Rural
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Demographic
Gender Male, Female, ³In-between´
Civil Status Single, Married, divorced, separated, widow/ widower,Single
Parent
Age Infant, Toddler, Teenager, Work Beginner, Yuppies, Middle Age,Matured, Retirees
Income A, B, C, D, E
Education Illiterate, Grade school, high school, vocational, college,
masters/ doctoral
Profession Unemployed, White color worker, executive, farmer, teacher,
retirees, OFW, Housewife, mother,
Blue color worker, owner, military , student, religious
Family Size Bachelor, Small family, Husband and Wife , Big Family
Social
Religion Catholic, Iglesia ni Kristo, Buddhist, Protestant, Born-again,
Muslims
Social Class Upper, middle, lower middle class
Race Brown, yellow, whiteNationality Filipino, Chinese, Japanese, American, Indonesian, Greek,
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Benefit Segmentation
-it is often believed that customers largely buy andpatronize a product or service in terms of thevalue that they can derive from such items.
-Benefits refer to the worth of an item in themarket.
-Benefit may be exhibited in different forms likeadvantage gained, help given, profit earned, pluspoints added to, significance presented,
usefulness provided, and convenience enjoyed.
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Benefit
Segmentation
Variables
Examples of Market Segments
Sensory Segment Practical Segment
Principal Benefit
Desired
Gentle to the
hands
Fragrant
Needs very little
washing
Cleans clothes
Demographic
Users
Housewives Working mothers
Brands Favored Tide, Surf Generic
Physical Form of
detergent
Bar Liquid
Acceptability of
Price
Competitive Cheap
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Psychographic Segmentation
It centers on the personal attributes of
the consumers.
It includes beliefs, attitudes, thoughts,
feelings, opinions, activities, hobbies
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Example of Psychographic Segmentation:Actualizers -are consumers who have the highest incomes.
-they have high self-esteem and abundant resources that they can indulgein any or all self-orientations.
-image is important to them as an expression of taste, independence and
character.
Fulfilleds -are consumers who belong to the high-resource group.
-They are principle oriented.
-They are mature, responsible and well-educated professionals.
-Their leisure activities center on their homes but they are well-informed about
what goes on in the world.
-They are open to new ideas and social change.
-They have high incomes but are practical consumers.
Believers -consumers who belong to the low-resource group but are principle-oriented.
-They are conservative and predictable consumers who favor American
products and established brands.
-Their lives are centered on family, church, community and nation.
-They have modest (not large) income.
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Achievers -are consumer who belong to the high-resource group.
-They are status-oriented.
-They are successful and work-oriented people who get
their satisfaction from their job and families.
-They are politically conservative who respect authority
and status quo.
-They favor established products and services that show
off their success to their peers.
Strivers -are consumers who belong to the low-resource group and
status-oriented.
-they have values very similar to the achievers but have
fewer economic, social, and psychological resources.
-Style is extremely important to them as they strive to
emulate people they admire and wish to be like.
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Experiencers -are consumers who belong to high-resource group.
-They are action oriented.
-They are the youngest of all segments with a median age of 25.
-They have lots of energy which they pour into physical exercise and social
activities.-They are avid consumers spending heavily on clothing, fast food, music
and other youthful favorites with particular emphasis on new products
and services.
Makers -are the consumers who belong to the low-resource group.-They are action-oriented and practical people who value self-sufficiency.
-They are focused on family, work and physical reaction.
-They have little interest in the broader world.
-They appreciate practical and functional products.
Strugglers -are the consumers who have the lowest income.
-They have too few resources to be included in any consumer slef-orientation.
-They are the oldest of all the segments with a median age of 61. ±Within their
limited means, they tend to be brand-loyal consumers.
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Develop Product Positioning
At this point, firm should have an idea of the marketsegment it wants to capture with its product.
Several positioning strategies can be adopted:
1. Prestige
2. Flashy image3. Efficiency
4. Economy
5. Quality
6. Versatility
One of the progressive ways of product positioning isreaching out to every customer. It involves customizingthe product to each customer.
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Choose Segmentation Strategy
Four alternatives in choosing appropriate
segmentation strategy
The company may decide not to join the
market.
The firm may decide not to segment at all but
instead to simply mass market.
The firm may decide to market to one segment
It may want to market to more than one
segment.