session two - the right product for the right people

8/8/2019 Session Two - The Right Product for the Right People

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M a r k e t i n g m a n a g e m e n t

S e s s i o n T w o

THE RIGHT PRODUCT FORTHE RIGHT PEOPLE


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Planning & Starting a New BusinessEMBA N643. Instructors Bio

Tom Byers is a professor at Stanford Universitywhere he focuses on high-growth entrepreneurshipeducation.

He is the founder and a faculty director of theStanford Technology Ventures Program (STVP),

which serves as the Entrepreneurship EducationCenter for the Engineering School.
http://stvp.stanford.edu/http://stvp.stanford.edu/


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Instructors Bio (cont.)

Tom has a wide range of business experienceincluding being on the founding team of SymantecCorporation as Executive Vice President .

Tom started his professional career at Accenture.

Tom is co-author of the McGraw-Hill textbook

Technology Ventures: From Idea to Enterprise andon the governing boards of MyThings and Flywheel

Ventures.
http://techventures.stanford.edu/http://techventures.stanford.edu/http://techventures.stanford.edu/http://techventures.stanford.edu/


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Look at this bottle of water

Make a list of all the types of people you think wouldbuy this product.

Then a reason why each group would buy it.

ExampleMothers of school age childrenBecause it will fit in their lunch box.


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Learning Outcomes

That is exactly what this lecture is all about,understanding and be able to work with concepts of

1.Whole market segmentation2.Product Differentiation

3.Targeting the segments of interest

4.Positioning your product for this segment

Or finding the current easiest sale.


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The Segmenting Process

Segment

Target

Position


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Evaluating the Definitions

Marketers can divide the market into groups ofsimilar customers, where the important

differences between those groupsrelate totheir product preferences and buying

behaviour.

Hooley et al. (2008: 206)


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Why Segment Markets?

Segmentation may identify new market opportunities

Enables segmented markets to be differentiated

Differentiation is a means of gaining a competitiveadvantage

Consumers with similar characteristics can have

their needsmet with a single marketing strategy

Marketing communications will have relevance toconsumer through targeting


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The Segmentation Process Macro Level

1. Macro Level

This identifies;

market we arecurrently in

market we would liketo be in

the customer

the competitors

generic businessneeds

IBMs Mission Statements is;

We are in the businessto help customers solve

problems through the use ofadvanced information

technology. We are creatingvalue by offering the

solutions, products andservices that help customers

to succeed. (We help you.)


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2. Micro Level Segmentation

Segmentation AnalysisSub-dividing product markets into groups of buyers (sameneeds/expectations)

Market Targeting

Selecting segments to match company resource/capabilities

Market PositioningDeciding how the company wants to be perceived by theconsumer. How distinct from the competition?

Marketing CommunicationsDevelop and deploy targeted campaigns to positionproduct.


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The Process

Segment

Target

Position


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The Process

Segment

Target

Position


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The Process

Segment

Target

Position


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The Process

Segment

Target

PositionBigger the overlap here the

better = why?


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Segment based on ?

So for car market it may be

Gender

Family size

Income

Price and value

But ethnicity?


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Segmentmentation based on ?

So what about for thepost-graduatestudent market?

Who does CERTtarget?

Why?


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Segment based on ?

So what about for thepost-graduatestudent market?

Segment on..

Country of origin

Discipline studiedIncome of family

Others????


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Some Segmentation Methods

Geographic (Descriptive)Dividing the market into different geographical units -nation, state, regions...

Eg. cake in Ontario= not so sweet cake in Quebec = very sweet

Demographic (Descriptive)Dividing the market into different ages, sex, family size,

income, occupation, lifecycle, social class.

Eg. McDonalds - families with kidsBurger King - teenagers


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UK Social Economic Groups

social grade/social statusoccupationAupper middle class higher managerial,

administrative or professional B middle classintermediate managerial, administrative or

professional C1 lower middle class supervisory orclerical, junior managerial, administrative orprofessional C2 skilled working class skilled manual

workers D working class semi and unskilled manualworkers E those at lowest level of subsistence statepensioners or widows (no other earner), casual orlowest grade workers


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Think

What is aa religious person?

student?

non-working mother?Often it is not money earned but shared values,attitudes and behaviors.

I use these groupings a lot in my lectures so learnthem please.


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Loyalty and Usage Segmentation

Loyalty1. Hard core loyals only use one brand

2.Split loyals have a portfolio of brands

3.Shifting loyals - are loyal to one brand at a time

4.Switchers no loyalty, very promotion/price led.UsageLight. Medium and heavy product users.

Many businesses hunt only to grow, new business is bestgenerated by upping both loyalty or usage.


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Psychographic/Lifestyle Segmentation

Supplements demographics by adding lifestyle, personality andbehaviour characteristics.

Eg. Social Class (B) / Lifestyle (fast cars and parties)Personality (ambitious, impulsive, high spender)

Advantages

identifies consumer attitudes, interests,opinions

provides continuous/trend data.

Disadvantages

the data is highly interpretative?


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Benefits/Needs Segmentation

Based onpriority needs and their relative importance to theconsumer.

What does Kia provide me with that Ford doesnt?

Advantages

product market position identified

identifies differential (competitive)advantage

Disadvantages

qualitative nature = highly interpretative


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Occasional / Product Use Segmentation

What occasions is the product used for, can youintroduce new ones?

Can you find new uses and users for this product?

Breakfast cereals.


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VALS

Developed by Mitchell (1978)

Based on Maslows 1954 Model of Human Needs.

Values, Attitudes, Lifestyles (VALS)

Used to predict consumer behavior and designmarketing positioning. Each of these categoriescontain similar people.


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Example model - VALS


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Targeting Strategies

Mass Market Strategy One product/service to many Low cost No relationship Slowly disappearing

Single Segment Strategy Single product to one segment Increasingly used High relevance and loyalty

Multi-Segment Strategy Different product to many segments Clear focus on needs, wants,

demographic, psychographics
http://images.google.co.uk/imgres?imgurl=http://newsimg.bbc.co.uk/media/images/39418000/jpg/_39418575_clublogo.jpg&imgrefurl=http://news.bbc.co.uk/2/low/business/3163077.stm&usg=__WGW9E1D88OVdqNY2tbq67MW3Fmg=&h=152&w=203&sz=15&hl=en&start=16&sig2=Q0XDjMcgiOgZfGZ6up8vAw&tbnid=RyTPEuLB7G6HmM:&tbnh=79&tbnw=105&ei=pZcqSeGeF83K-Qbxs9GnAw&prev=/images?q=club+18-30&gbv=2&hl=en&sa=Ghttp://www.tellaballoon.com.au/images/TAB_9399_2.jpghttp://www.jaxquickfit.com.au/working_alt/NewsAd/images/continental2.jpg


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But remember....

No point using segmentation techniques that are notMARS-ABLE.

Measurable - need broad idea of total population

Accessible - got to be able to reach them

Relevant suit product

Sufficient size - got to be worth botheringwith


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Plus you always need numbers in this business.

No numbers means no measurement which means nobusiness control, no sense of where you are.


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Starting points Future casting

Where should the focus be?

Trends in the marketplace...

What's growing?

Whats declining?

Who are the opinion formers now?

More businesses fail from not following thechanging market than any other reason.


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Starting points to attract customers

Current customer base - replicate

Current competitor base - steal

People similar to the above - attract

Very different types because you are repositioning .

There is only one pie, your new customershave to come from somewhere.


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Competitive Positioning Strategies

The choice of target marketsegments determines wherethe business will compete. Butother firms will also beseeking to compete in thesesegments, creating customerchoice.

Positioning is the act ofdesigning the companys

offering and image so thatthey occupy a meaningful

and distinct competitiveposition in the targetcustomers mind.

Kotler (2003)


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What makes us different?

Firms must create a sustainable differential advantagetoattract these choices. The firm must, therefore, meet threecriteria;

1. Customer benefit - offering some importantbenefit to the customer not the company.

2. Unique - benefit must not be obtainable fromanother company/product.

3. Differential must be sustainable.


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From these rules and consumer research one developsa positioning map.

This allows you to know:

Where you are now

Where you want to go


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Positioning Map

Develop a perceptualmap based on

consumer decisionmetrics consumersdecide.


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Positioning

Develop aperceptual map That is relevant to your

target audiencedecision makingpriorities


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Positioning



That shows whereyou currently areverses maincompetition


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Positioning



That shows wereyou currently areverses maincompetition

And where our brand willmove (if at all) as a result ofthe advertising working


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Positioning

Axis must bebi- polar and

the mostrelevant


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10

20

30

40

50

60

70

0 10 20 30 40 50 60

CH4

Living

:K Commercial TV Segmentednd Positioned

ITV1Five

Sky 1

UKTV Gold 4

ITV2

: / , - . : , ,Source BARB Infosys TV Jan Jun 08 Base All adults network homes

SkySports

1

% -6 34YoungerOlder

Downmarket

Upmarket

ITV3

ore 4

ilm 4

DaveTotal

FiveUS

Total

FiveLife

Total

%

ABC1


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Another one for cars.


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Niche Marketing

Aniche market is a focused, targetable portion of amarket.

By definition, then, a business that focuses on a nichemarket is addressing a need for a product or service

that is not being addressed by mainstreamproviders. You can think of a niche market as anarrowly defined group of potential customers.

For instance, instead of offering cleaning services, a

business might establish a niche market byspecializing in blind cleaning services.


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So why is all this important?

It is wasteful and often futile to aim advertising ateverybody. The effort is diluted and diffused andmight result in most people thinking .thisadvertising is not for me!..There needs to be a

precise definition of the people the advertising isintended to reach

Adapted from Broadbent 1984


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As a result of this process

You should have decided precisely whoyou intend to be exposed to theadvertising & other Mar Comms.

If more than one group targeted -prioritise e.g. primary and secondaryaudiences and know why.


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Aqualisa Quartz Case Study

1. Do a SWAT analysis for the Quartz shower.2. Which market segment will you target and why?3. How will you position your product? Customers will

buy this product because..4. How would you use the 4 Ps.5. Suggest a key consumer insight to promote for yourmarketing communications campaign.

You have 90 mins.

session two - the right product for the right people

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