marketing and segmentation. suppose a teenage girl is looking for a pair of jeans. what influences...
TRANSCRIPT
Marketing and
Segmentation
Suppose a teenage girl is looking for a pair of jeans.What influences her?
1. Demographics2. Psychographics3. Perceptual clues4. Symbolism5. Past experience6. Group dynamics
RitualsFamilyReference groupsRace & ethnic factorsSocial classSubcultureCulture
Market Segmentation
“Smart marketing starts with smart segmentation.”
Jeffrey J. Fox
Target Market: A group of people or organizations which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members
Market Segment: Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs
Market Segmentation: The process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs
Marketing Concept:“All marketing strategies shouldbe based on known customerneeds and or wants.”
Segmentation is the practical application ofmarketing research and consumer behavior.
Reminder:The “marketing mix” consists of:
ProductPricePromotionDistribution (Place)
Almost no one tries to sellto everyone!
Undifferentiated
Concentrated
Major kinds:
1.Undifferentiated marketing strategy:Generic DifferentiationSame marketing mix for ALL segmentsOverlooks segment differences4-Ps designed for everyoneAdvantage:
Concentrated resources
Major kinds:
1.Undifferentiated marketing strategy:Generic DifferentiationSame marketing mix for ALL segmentsOverlooks segment differences4-Ps designed for everyoneDisadvantage:
4-Ps for everyone?Competing against focused firms
Major kinds:
2. Single Marketing Strategy:Targeted Differentiation Niche MarketingGo after one segment (ethnic marketing)Advantage: Sharp focus… good expertise
efficiency… high profitsgives smaller firms a chancegood place to start
Major kinds:
2. Single Marketing Strategy:Targeted Differentiation Niche MarketingGo after one segment (ethnic marketing)Disadvantage:
More risk… eggs in one basketCompetition can wipe you out
Major kinds:
3. Full-coverage marketing strategy:Segmented DifferentiationTreat each segment as separate market4-Ps designed for every marketAdvantage:
Focus…
Major kinds:
3. Full-coverage marketing strategy:Segmented DifferentiationTreat each segment as separate market4-Ps designed for every marketDisadvantage:
Development costs(must weigh increased costsincreased sale)
Major kinds:
4. Concentrated marketing strategy:Hybrid DifferentiationSingle product to several segment
5. MicromarketingLocal marketing and individual marketing
Mass CustomizationBuild-to-Order (BTO)
To work, segments must have:
1. Substantiality Must be large enough
enough money, customers, etc
enough room to grow
Basic marketing rule:
The best product, best prices, andbest business in the world
will fail if there are no customers!
To work, segments must have:
2. Identifiablity Must be able to identify segment
and measure it
To work, segments must have:
3. Reachability Must be accessible
must be actionable
(can action be taken?)
The Segmentation Tradeoff:Synergies vs. Cannibalization
• Organizational Synergy
• Cannibalization
• “Tiffany/Walmart” Strategiestwo-tier products
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Increased customer value through efficientmarketing and manufacturing
The five key steps in segmenting and targeting markets that link market needs to a
firm’s marketing program
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Criteria to Use in Forming the Segments
• Simplicity and Cost-Effectiveness of assigningpotential buyers to Segments
• Potential for increased Profit
• Similarity of needs of potential buyerswithin a Segment
• Potential of a marketing action to reacha Segment
• Difference of needs of buyers among Segments
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Step 1.
Common Segments
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Step 1.
GeographicalClimate
RegionCity sizePopulation density
Market Segmentation
1.Geographic
Market Segmentation
1.Geographic2.Demographic
Common Segments
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Step 1.
DemographicsAge (Generational marketing)
Gender (?)Marital statusIncomeEducationOccupationRacial and Ethnic
Market Segmentation
1.Geographic2.Demographic3.Psychographic
Common Segments
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Step 1.
PsychographicsPerceptionGender (?)MotivationPersonalityAttitudes
http://www.expedia.com/Waterloo-Hotels-Baymont-Inn-Suites-Waterloo.h17890.Hotel-Information?chkin=10%2F29%2F2013&chkout=10%2F30%2F2013&rm1=a2&hwrqCacheKey=3ac1ed16-2067-4bf3-b2a0-8b521c84be7aHWRQ1381949822543&c=30126d42-02ed-4261-9ade-64b0ef193af1
&
Market Segmentation
1.Geographic2.Demographic3.Psychographic
The Nine Nations
Common Segments
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Step 1.
LifestyleCombination of:
PlacePersonProducts
VALs
Common Segments
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Step 1.
UsageUse-related
usage ratebrand loyaltyawareness
Use-situationwhere… when… why… with whom
http://www.youtube.com/watch?v=vbsyEI78m5s
Common Segments
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Step 1.
BehavioralProduct featuresUsage rates (frequency)80/20 ruleLong tail
Selling small amounts to few customers,
BUT have lots of things to sell (Netflix)
Common Segments
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Step 1.
Socio-culturalCulture and subcultureSocial classReligion
Social class may be hard to define, but we all know it when we see it.
Segmentation bases, variables, and breakdowns for U.S. consumer markets
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The five key steps in segmenting and targeting markets that link market needs to a
firm’s marketing program
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Target Marketing
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Step 2:
Marketing positioning
Arranging for a product to occupy a clear, distinctive , and desirable place relative to competing products in the minds of target consumers.
Product positioning: is theplace an offering occupies in a consumer’s mind on important
attributes relative to competitive products.
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Product differentiation: is a marketing strategy that involvesa firm using different marketing mix activities to help consumers perceive the product as being
different and better than competing products.
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Prince Sports targets racquets at specific market segments
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Market-product grids show alternative strategies for a lawnmower manufacturer
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Step 3
The five key steps in segmenting and targeting markets that link market needs to a
firm’s marketing program
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Criteria to Use in SelectingTarget Markets
Those that divide a market into Segments
• Two Types of Criteria
Those that actually pick the Target Segments
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STEP 4: SELECT TARGET MARKETS
Criteria to Use in Selecting Target Markets
• Market Size
• Expected Growth
• Competitive Position
• Cost of reaching the Segment
• Compatibility with organizationalobjectives and resources
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Perceptual Map Example
A Perceptual Map to Repositionchocolate milk for adults:
• Identify Important Attributes for Adult Drinks
• Discover How Customers See Chocolate Milk
• Reposition Chocolate Milk to Make ItMore Appealing to Adults
• Discover How Adults See Competing Drinks
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A perceptual map: is a means of displaying or graphing in two
dimensions the location of products or brands in the minds of consumers to
enable a manager to see how consumers perceive competing
products or brands, as well as the firm’s own product or brand.
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A perceptual map of the location of beverages in the minds of American adults
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The strategy American dairies are using to reposition chocolate milk to reach adults
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Step 5
Do it!