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MM555 Week 3 Lecture
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MM555Module 3 Segmentation, Targeting & Positioning
Source:http://www.forbes.com/sites/sap/2012/12/03/6-steps-to-executing-a-content-strategy/
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Session Outline
Welcome
Review of Module 2
Internal Classes - Activity
Digging Deeper
Module 3: Segmenting, Targeting and Positioning
Break
Learning Activity
Next Steps
Marketing plan group time
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Module 3: Learning Objectives
1. Define the main steps in designing a customer-driven marketing strategy:
market segmentation, market targeting, differentiation, and positioning.
2. List and discuss the main bases for segmenting consumer and business
markets.3. Explain how companies identify attractive market segments and choose a
market-targeting strategy.
4. Discuss how companies differentiate and position t heir products for maximum
competitive advantage.
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Review of Module 2
Strategic Planning relating to Marketing and delivering
value.
Analysis of Internal and External Environmental Forces
SMART Objectives
Marketing Information Systems and Market Research
Process
4
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BRICS, CIVETS & the Next Eleven!Next week we are putting theory into practice
Take note of your assigned country.
o Group 1: China
o Group 2: India
o Group 3: Indonesia
o Group 4: Sub Saharan Africa
o Group 5: Australia
Locate at least 1 report that relates to that country. More if
you can. Bring along next week. We will be exploring
questions such as:o What are the opportunities?
o Where should organisations focus? Which industries? Markets?
o What is required for an organisation to succeed in that market?
This is an in-class activity. Just make sure you havesomething to work with!
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Sample Resources
Report| McKinsey Global Institute Manufacturing th e
future: The next era of global growth and inn ovationo http://www.mckinsey.com/insights/mgi/research/productivity_competitiveness_and
_growth/the_future_of_manufacturing
Report| It's a MAD world: How Mobile, Agile, Digital
employees and consumers are reforming Australiao http://www.accenture.com/Microsites/futurebusinesstrends/Pages/trend-one-
video.aspx
Report| The Rise of the African
Consumer o http://www.mckinsey.com/global_locations/a
frica/south_africa/en/rise_of_the_african_co
nsumer
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Your Task
Work out a system to review thematerial provided
Identify and synthesise the key issues, risks &opportunities that the class will need to know about.In doing this, you may wish to use one or more of the frameworks discussed regarding preparing aSituation Analysis
Identify where organisation’s should focus their attention and summarise the key success factors.
Put together a 5 minute presentation that wouldserve as the equivalent of an executive summary(but via a presentation) to the class
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Presentation
Take no more than 5 minutes You can present in a manner you feel
comfortable (e.g. PowerPoint, materialon a whiteboard, ‘stand-up’ delivery;a musical)
Focus on what the strategic marketingimplications are for your chosen business rather than merely repeating issues you have comeacross
Ensure that you cover the key success factors.
Are there any regional implications?
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DIGGING DEEPERIn the News; Out of Academia; Around the Grounds
“In each Module we encourageyou to hunt out the latest news;explore the research and scansocial media for what’s new,what’s important and what haspiqued your interest on the topicof marketing”
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…..What Caught Your Eye This Week?Source: http://thisweekin.com
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This Week’s Reading….…..Which Ideas Will You Hold Onto?
Bailey, C., Baines, P., Wilson, H. and Clar, M 2009 S egmentation
and customer insight in contemporary services marketing
practice: why grouping customers is no longer enough Journal of
Marketing Management Vol. 25, No. 3-4, pp. 227-252
O'Connell, A. 2008. Buying in: Harvard Business Review Sept
2008 Vol 86 Iss 9.
Court, D. and Narasimhan, L. 2010 Capturing the world's
emerging middle class. McKinsey Quarterly; Issue 3, p12-17, 6p,
1 Diagram, 1 Chart
Yankelovich,D. and Meer,D. 2006 Rediscovering Market
Segmentation Harvard Business Review, Feb
Refer to O’Connell 2008
article? What insights
have you found relating to
what YOU buy and who
YOU are
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MODULE 3: SEGMENTATION,
TARGETING & POSITIONING
Understanding the market and creating an identity
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Marketing Management Framework
The MM555 Marketing Management Framework drawson a number of sourcesincluding Iacobucci(2013), Armstrong et al (2012) and Gibbs(2009) and includesthe keyfactors which need to be taken into accountwhen developing a comprehensive marketing strategy.
Create Value
Product / Service
People
Processes
Physical Evidence
Capture Value
Price
CommunicateValue
Integrated MarketingCommunications
(includingPromotion)
Deliver Value
Placement Logistics
Customer Consider factors suchas decision making,
values, needs &wants
CompanyOr organisation. What
is our StrategicPurpose? Capabilities?
Weaknesses?
ContextWhat’s going on in
the macroenvironment?
CollaboratorsWho do we work with?Who are our partners?
CompetitorsWho are our current
and potentialcompetitors? Whereare they placed in the
market?
SegmentationBased on geographic,
demographic,psychographic and/or behavioural factors
TargetingConsider strategic fit;potential and defensibility
against competition
Analysis &Strategy
Planning &Implementation
PositioningYour place in the market space
Core benefit propositionUnique selling proposition
Positioning Statement
DifferentiationDifferentiating the marketoffering to create superior
customer value
Implementation, Monitoring &Measuring Outcomes
Marketing isabout creatingcustomer value
and profitablecustomer
relationships
Marketing Objectives
Focusfor
Module
3
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Marketing Management Framework
The MM555 Marketing Management Framework drawson a number of sourcesincluding Iacobucci(2013), Armstrong et al (2012) and Gibbs(2009) and includesthe keyfactors which need to be taken into accountwhen developing a comprehensive marketing strategy.
Create Value
Product / Service
People
Processes
Physical Evidence
Capture Value
Price
CommunicateValue
Integrated MarketingCommunications
(includingPromotion)
Deliver Value
Placement Logistics
Customer Consider factors suchas decision making,
values, needs &wants
CompanyOr organisation. What
is our StrategicPurpose? Capabilities?
Weaknesses?
ContextWhat’s going on in
the macroenvironment?
CollaboratorsWho do we work with?Who are our partners?
CompetitorsWho are our current
and potentialcompetitors? Whereare they placed in the
market?
SegmentationBased on geographic,
demographic,psychographic and/or behavioural factors
TargetingConsider strategic fit;
potential and defensibilityagainst competition
Analysis &Strategy
Planning &Implementation
PositioningYour place in the market space
Core benefit propositionUnique selling proposition
Positioning Statement
DifferentiationDifferentiating the marketoffering to create superior
customer value
Implementation, Monitoring &Measuring Outcomes
Marketing isabout creatingcustomer value
and profitablecustomer
relationships
Marketing Objectives
Chpt 1,2,14 Chpt 16 &17 Chpt 15 & 16 Chpt 10,16Chpt 15 & 16
Chpt 3Chpt 14
Chpt 5
Chpt 6,7 & 8 Chpt 9 Chpt 11,12 & 13 Chpt 10
Chpt 16
Chpt 16
Chpt 16
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SEGMENTATIONMarket Analysis
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
Summary of Segmentation, Targeting andPositioning
S
T
P
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
What is a market segment?
A market segment consists of a group of customers who
share a similar set of needs and wants.
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18
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
Segmentation
18
Segmentationis aboutidentifying groupsthat are similar toone another inBEHAVIOUR(=homogenouswithin)
But identifiedSegments maydiffer from oneanother (=heterogeneousbetween)
Marketers look at theentire set of potentialcustomers andclassify them insimilar groups or ‘segments’
Segments are often defined by more than ONE variable!
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
Mass Marketing
All customers are treated the same
Is usually more efficient but not effective in
meeting customer needs
Long live Mass Marketing!
Largest potential market
->Lower cost
->Lower prices or higher margins
Mass Marketing is dead!✘Media too expensive✘Markets too proliferated
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Toyota’s Segmentation
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
Segmenting Consumer Markets (B2C) *
Geographic
Demographic
Psychological
(Psychographic) Behavioural
Descriptive
characteristics
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VALS
Footer text - slideshow title
http://www.strategicbusinessinsights.com/vals/presurvey.shtml
Take the survey:
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B2B compared to B2C Segmentation
Primary distinction between B2B & B2C is the
sources of data are different
23
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Concept in Action: Discussion Question
Which variables would you segment on?
24
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How to Segment the Market
Begin with understanding the marketplace and then gather
information on the customer’s perspective A segment may look desirable in terms of size and growth but be saturated
with competitors and not consistent with firm goals
25
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TARGETINGIdentifying best segment to focus marketing efforts
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Evaluation of the Segment. Consider…
1. Data to identify segments?
2. Databases to access segments?
3. Profitability?
4. Fit with corporate goals?
5. Actionable?
Footer text - slideshow title
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Segmentation Strategies
28
Breadth strategyServe more thanone segment
Depth strategyServe onesegment well
Tailored strategyDifferent products for different segments
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
Targeting – Strategic Decisions
Decide to….
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POSITIONING STRATEGIES
How to stand stand out from the competition
Source: http://acornbbs.com/wp-content/uploads/2011/09/Rebel-Brown-Quote-Positioning.jpg
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30.07.2010Footer text - slideshow title
Writing a Positioning Statement
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Perceptual Map of Kellogg’s Products
Premium price
Value for Money
L e s s
N u t r i t i o u s
N u t r i t i o u s
Sustain
All Bran
Coco Pops
Honey n OatBake
Cornflakes
Rice Bubbles
Frosties
Complete
SultanaBran
Nutri-grain
Mini Wheats
Special K
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All 4 Ps Matrix
All 4P combinations are possibleHowever, some are more optimal than others
33
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Optimal Matches
16 combinations can be reduced to two
34
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Optimal Matches Aligned with Gurus
The two extremes in the matrix are consistent with
management gurusTreacy and Wiersema
1. Operational excellence (Southwest)
2. Product leadership (Johnson & Johnson)
3. Customer intimacy (Nordstrom)
Michael Porter
1. Keeping costs down and prices competitive
2. Leading by differentiation
3. Niche positioning
35
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Textbook Resource: Kotler, Keller, Burton: Marketing Management © 2009 Pearson Education Australia
STP Process Overview
Communicate to the market
M a r k e t R e s e a r c h
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Module 3: Learning ObjectivesChecking In…..
1. Define the main steps in designing a customer-driven marketing strategy:
market segmentation, market targeting, differentiation, and positioning.
2. List and discuss the main bases for segmenting consumer and business
markets.
3. Explain how companies identify attractive market segments and choose a
market-targeting strategy.
4. Discuss how companies differentiate and position t heir products for maximum
competitive advantage.
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15 min Break
38
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Next Steps Review the Material for Module 4: Consumer Behaviour
Complete the required reading:o Kumar, V., Rajkumar Venkatesan and Werner Reinartz. 2006. "Knowing
what to sell, when, and to whom." Harvard Business Review 84 (3): 131-
137.
o Piskorski, Mikolaj Jan. 2011. "Social strategies that work." Harvard
Business Review 89 (1): 116-122.
o Thomas, Jacquelyn S. 2004. "Getting the most out of all your customers."
Harvard Business Review 82 (7/8): 116-123.
Work on Situation Analysis for Applied Project
Watch for Announcements
Don’t forget to Dig Deeper!