Transcript Marketing fundamentals – MARKET SEGMENTATION Learning

MARKET SEGMENTATION,
TARGETING AND
POSITIONING
MARKET SEGMENTATION
MARKET SEGMENTATION
Learning objectives
At the end of this lesson, you should be able to
understand the following:
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What is market segmentation
The reasons for segmenting the market
The bases for segmenting the market.
The importance of segmenting the market.
The criteria for segmenting the market.
Segmentation variables in consumer and organisational markets.
The importance of segmenting the market
How companies identify attractive market segments and choose a market
coverage strategy.
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MARKET SEGMENTATION
Definition
What is market segmentation?
Market segmentation is the process of identifying and
classifying customers according to their different needs
and wants.
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Market segmentation means dividing a market into distinct groups
of buyers with different needs, characteristics or behaviour, who
might require separate products or marketing mixes.
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MARKET
SEGMENTATION. Definition continues
Marketing Fundamentals-
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It is the division of market in to distinct groups of
customers and using the marketing mix to target customers
in these groups.
It is the splitting up of customers in to segments and using
the marketing mix to target customers.
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SIX STEPS IN MARKET SEGMENTATION,
TARGETING AND POSITIONING
1. Identify bases for
Segmenting the market
2. Develop profiles of
Resulting segments
3. Develop measures
Of segment
attractiveness
4. Select the target
Segment (s)
5. Develop positioning
For each target segment
6. Develop marketing mix
For each target segment.
LEVELS OF MARKET SEGMENTATION:
Mass marketing: Using almost the same product,
promotion and distribution for all consumers.
 Segmenting markets/ segment marketing: Adapting a
company’s offerings so they more closely match the needs
of one or more segments.
 Niche marketing: Adapting a company’s offerings to more
closely match the needs of one or more sub segments
where there is often little competition.
 Micromarketing: A form of target marketing in which
companies tailor their marketing programmes to the needs
and wants of narrowly defined geographic, demographic,
psychographic or behavioural segments:
Examples of Micromarketing: Local marketing and individual
marketing.
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Marketing fundamentals- MARKET SEGMENTATION
REASONS FOR SEGMENTING THE MARKET
Because of differences that exist among customers with
regards to the following:
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Age
Psychology
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Sex
Life cycle
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Marital status
Life style.
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Behaviour
Location
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Income
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Culture
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Social status
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Inadequate resources to mass market (satisfy the whole
market).
Marketing Fundamentals
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Marketing fundamentalsMARKET SEGMENTATION
THE CRITERIA FOR SEGMENTING THE MARKET
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Identifiable: You must first of all identify the segment you want to target. It may be children, the young or
older population or you may decide to target just the male or female population: What is important is the
marketer should identify the market segment.
Profitable: The segment should be profitable. This means that only those segments which the business can
get more profit should be targeted. The segment targeted should be able to raise money for the organisation.
Recognisable: The marketer should be able to recognise the segment and its needs. The segment should also
recognise the fact that they have been segmented.
Accessible: The business should be able to get access to the particular market segment. Goods and services
should reach the segment targeted. The segment should be able to get the products of the organisation.
Promotion and advertisement should be able to reach the segment. If the marketer cannot get access to the
segment, then it will be difficult to satisfy the market segment.
Actionable: The business must take action to provide the products needed by this segment. Customer
complaints and queries should be dealt with in the fastest and reliable way as possible to satisfy the segment.
Stable (reliable): The segment targeted should be a reliable segment. The segment should’nt appear today
and disappear tomorrow, therefore before targeting a particular segment, the business should make sure the
segment is reliable. It is the responsibility of the business to also should reliability and consistency in the
provision of goods and services to the particular segment. Customers should have the goods they need at all
time at the right price, quantity and quality. Customer complaints should also be dealt with in the fastest way
possible.
Substantial: The segment should be large enough so that the business can also get more profit. The business
should focus on segments with many customers so that the profitability can be substantial.
Measurable: The Marketer should be able to measure the amount of people in a particular segment, the
resources needed satisfy customers in the segment and also the cost and benefit of targeting a particular
segment.
Affordable: The business should be able to take care of the needs and wants of a particular segment.
Businesses shouldn't target segments that they won’t be able to provide the products needed by the segment.
Part of customer satisfaction is to provide the products they need, but in a case where a business cannot meet
up with the demand, need and want of customers then customers will not be satisfied and it is to the
detriment of the business.
BASES FOR SEGMENTING THE MARKET IN CONSUMER MARKET
EGMENTATION IN CONSUMER MARKET
Demographic: Segmentation according to
age,gender,income,occupation, marital status and Life cycle,
education, religion, race, nationality, family size, family life cycle.
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Geographic: Segmentation according to regions, country size, cities size,
town, villages, continents, density & climate.
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Psychographic: Segmentation according to social class, lifestyle, personality.
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Behaviour: Segmentation according to purchase occasion, benefit sought,
loyalty status, readiness state, attitude towards product, User status, usage rate,
purchase occasion, loyalty status
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Geo-demographic: Segmentation according to geography and demography.
This is used by ACORN: The post office also uses this.
SEGMENTING INDUSTRIAL
MARKETS
MARKET TARGETING
MARKET TARGETING
Learning Objectives:
After completing this chapter, you should be able
to:
1. Define market targeting
2. Explain the targeting strategies
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M1
M2
M3
Targeting
P1
Single segment
target
Male
populatio
n
P2
e.g Male population
P3
P1
M1
M2
Male
female
M3
P1
P2
Old
Product specialisation
Old
Middle
age
P3
M1 M2
P1
P2
M2
P3
M3
children
P2
M1
Suit
male
Shoes
male
Shirt
male
Multi-segment
target
M1
M2
M3
P1
P2
M3
P3
Market
Specialisation
Full market coverage
P3
M=Market and P= Product
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Targeting Strategies
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Segment 1
MARKETING MIX
Segment 2
Concentrated strategy/marketing
Micro marketing
Niche marketing
Segment 3
Segment 1
MARKETING MIX 1
MARKETING MIX 2
Segment 2
MARKETING MIX 3
Segment 3
Differentiated strategy/marketing
Individual Marketing
MARKETING MIX
Undifferentiated strategy/marketing
Mass Marketing
e.g. (Shoe Zone, Microsoft, Dell)
Whole
market
MARKET POSITIONING
Learning Objectives
After reading this chapter, you should be able to:
1.
Define market positioning
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Explain the positioning strategies – explain how companies
can position the market and their products for maximum
competitive advantage in the market place.
3.
Define differentiation.
4.
Explain why companies seek to differentiate their products,
markets and use positioning strategies.
5.
Examine the positioning map of an organisation
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List and discuss the principal ways in which companies can
differentiate their products.
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MARKET POSITIONING
POSITIONING
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Positioning means designing a product to occupy a distinct and valued place in
the minds of customers.
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Companies can position the market in terms of price, product, quality, brands,
promotion, and customer service.
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The essence of positioning is to enable the company to have more competitive
advantage over its competitors.
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When positioning, the company should identity customers needs, produce the
product targeted at customers.
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The product packaging, labelling, styling, branding, designing, pricing,
promotion and distribution should seriously be analysed.
A good marketing programme such as marketing research,
Marketing mix, segmentation, targeting, new product
development and market expansion will boost the company’s
competitive advantage.
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POSITIONING
Companies need to find out what position they are
in, in relation to their competitors.
Am I a market leader or a market follower? This is a
question that should be asked by organisations.
 Marketing planning, and marketing
strategies should be implemented to enable
the company to have competitive
advantage.
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POSITIONING
KEYS TO SUCCESSFUL POSITIONING
Consistency
Clarity
Successful positioning
Credibilit
y
Source: Principles and practice of marketing- 2nd edition by David Jobber
Compet
itivenes
s
Jude Asongwe
POSITIONING
POSITIONING MAP OF SUPERMARKETS:
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High price
A
B
C
D
Wide product range
X
Low price
. ..
G
Narrow
product range
F
E
A PERCEPTUAL MAP OF SUPERMARKETS
Source: Principles and practice of marketing- 2nd edition by David Jobber
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KEY DEFINITIONS
Segmentation:
The act of dividing a market in to distinct group of
customers who share the same market characteristics.
Targeting:
The act of focusing on the particular segment or segments and providing
the products needed by that particular segment.
Positioning:
It means making a product to occupy a distinct and valued place in the
minds of customers.
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REVISION QUESTIONS
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Explain the value of market segmentation, targeting and positioning in modern
businesses today.
Explain what is market segmentation, targeting and positioning.
Explain the criteria for segmenting the market
Examine the bases for market segmentation
Explain the various targeting strategies that businesses can use to target customers.
•Jude
•Asongwe