Transcript Lecture 10x
Lecture 9 E-Marketing Segmentation, Targeting, Differentiation, and Positioning Strategies Instructor: Hanniya Abid Assistant Professor COMSATS Institute of Information Technology Lets see how Coca cola has used e-Marketing techniques Objectives After this lecture , you will be able to: Outline the characteristics of the three major markets for e-business. Explain why and how e-marketers use market segmentation to reach online customers. List the most commonly used market segmentation bases and variables. Objectives, cont. Outline the five types of Internet usage segments and their characteristics. Describe two important coverage strategies emarketers can use to target online customers. Define differentiation and positioning and give examples of companies using them. The 1-800-Flowers Story Jim McCann started 1-800-Flowers as a traditional retailer in New York City in 1976. In 1995, he extended the brand to the Internet. He used SAS data mining software to identify customer segments for better targeting. The software analyzed the clickstreams and purchasing patterns of the firm’s 21 million customers. THE 1-800-FLOWERS STORY, CONT. In Q4 2009, the firm’s Web site had 767,360 daily visitors, $238.5 million in sales and drew 656,000 new customers. Why do you think better segmentation and targeting lead to reduced phone time and lower costs? Segmentation & Targeting Overview Marketing segmentation is the process of grouping individuals or businesses, according to use, consumption, or benefits of a product or service. Market targeting is the process of selecting market segments that are most attractive to the firm. Three Markets Three important markets sell to and buy from each other: Business Market: Marketing of products for use in the business operation, as components, or for resale. Government Market: Federal, state, county, city, and foreign governments. Consumer Market: The consumer market involves marketing goods and services to end consumers. Three Basic Markets Market Segmentation Bases and Variables Marketers create segments to identify and reach the right people at the right time. Geographic location Demographics Psychographics Behavior with regard to the product Companies can also combine bases, such as geodemographics (geography and demographics) Geographic Segments Product distribution strategy is a driving force behind geographic segmentation. Countries may be segmented based on Internet usage. (statistics from 2012) China has 384 million users. U.S. has 234 million users . Japan has 96 million users. Pakistan has 30 million users Top Internet Languages Geographic markets may also be evaluated by infrastructure variables and language spoken. Demographic Segments In developed nations, users are much like the mainstream population demographically. The heaviest Internet penetration in 2010: 18-29,, suburban, earn Three market segments are of great interest to emarketers. Millennials Younger generation Online opinion leaders Millennials Of those born between 1979 and 1994, most use the Internet. “Confident, connected, and open to change.” 75% have a social networking profile, 83% sleep with their cell phones, and 80% sent a text message in the past 24 hours. This group is a marketing proving ground for the future. Younger generation The number younger internet users online is increasing. Kids 8-12 do a number of activities online: Play online games (78.1%) Homework (34.2%) Music (28.6%) Videos (26.2%) Surf Web (22.7%) E-mail (20.4%) Ethnic Groups Minority groups are important online markets. English-speaking minorities have a increasing Internet adoption rate. Influentials Influentials are individuals who influence others, driving change. A survey was conducted to identify these. Psychographic Segments User psychographics include: Personality Values Lifestyles Activities Interests Opinions Interest Communities 10 important types of online communities, including social networking. Ways to target online communities. Provide online chats, bulletin boards, and events. Advertise on another firm’s community site. The firm can join the community and post as a member. Attitudes and Behaviors Psychographic information helps e-marketers define and describe market segments. Some marketers believe that a segment’s attitudes toward technology can help determine buying behavior. Forrester Research measures attitudes toward technology with a system called Technographics. Forrester identified 10 consumer Technographics segments in the U.S. (Exhibit 8.10). Consumer Techno graphics Segments Behavior Segments Two common segmentation variables are benefits sought and product usage. Marketers using benefit segmentation form groups of consumers based on the benefits they desire from product. Marketers often segment by light, medium, and heavy product usage. Marketers can segment users as brand loyal, loyal to a competitive product, switchers, and nonusers. Benefit Segments To determine benefits sought, marketers can look at what people actually do online. Online activities Popular Web sites Most popular, according to comScore.com: Google Yahoo! Microsoft AOL Facebook Usage Segments Marketers can segment according to how consumers use the Internet. Home and work access Mobile access Biggest use is for text and Web browsing. Social Media Engagement Segments Targeting Online Customers E-marketers select a targeting strategy. Which targets to serve online Which locations Other factors Two targeting strategies are well-suited for the Internet. Niche marketing Micromarketing The Internet’s big promise is individualized targeting. Differentiation Online Kotler defines differentiation as the process of adding meaningful and valued differences to distinguish the company’s offering from the competition. There are a number of differentiation dimensions and strategies for their accomplishment. Differentiation Dimensions A firm can differentiate along 5 dimensions: Product Service Personnel Channel Image Internet-specific Differentiation Strategies There are 6 differentiation strategies unique to online businesses. Site Environment/Atmospherics Easy downloads, accurate and clear information, easy navigation. Build Trust Strong brand recognition. Privacy policy. Safe and encrypted payment process for transactions Internet-specific Differentiation Strategies, Cont. Efficient and Timely Order Processing Pricing Majority of firms today differentiate themselves in other ways besides pricing. Customer Relationship Management (CRM) Managing long-term relationships with customers. Invite User-generated Content The key is to trust customers, listen, respond, and learn. Positioning Positioning is the process of creating a desired image for a company and its products in the minds of a chosen user segment. The e-marketer’s goal is to build a position on one or more bases that are relevant and important to the consumer. Firms can position brands, the company, the CEO, or individual products. Bases And Strategies for Positioning Product or service attributes Technology position Benefits position User category position Competitor position Integrator position Summary E-business occurs primarily in three markets Marketing segmentation for E-Marketing Strategies to Niche and Micro marketing Differentiation and positioning One last thing… Visit Google and Bing and look for a local grocer in your area. Compare the searches based on effectiveness of results and how easy are they to use Visit a site of a local retailer and identify what makes the site trustworthy.