Transcript Chapter 8 Segmenting and Targeting Markets

8
Segmentation & Target
Marketing
Dr. Close
Finding Markets
• Markets = people with needs/wants and
the ability and willingness to buy
• Types of markets:
– Generic
• People with broadly similar needs (social)
• Diverse ways of satisfying (restaurants, movies)
– Products
• Very similar needs (thirsty for soft drinks)
• Very close substitutes (Coke vs. Pepsi, and what
else?)
Close substitutes or no?
Pepsi vs Coke
What’s the Difference?
Market
Market
Segment
People or organizations with needs or wants
and the ability and willingness to buy.
A subgroup of people or organizations sharing
one or more characteristics that cause them to
have similar product needs.
The process of dividing a market into
Market
meaningful, relatively similar, identifiable
Segmentation segments or groups.
Market Segmentation
• Dividing market into meaningful, similar groups
(or aggregating those with similar needs)
• Why is segmentation important?....
• Markets have a variety of product preferences
• Marketers can better define customer needs
• Decision makers can define objectives and
allocate resources more accurately
Criteria for Segmentation
Substantiality
Segment must be large enough to
warrant a special marketing mix.
Identifiability
and Measurability
Segments must be identifiable and
their size measurable.
Accessibility
Members of targeted segments must
be reachable with marketing mix.
Responsiveness
Unless segment responds to a
marketing mix differently, no separate
treatment is needed.
So, A Good Segment is…
• Homogenous within: members are similar
• Heterogeneous between: outsiders differ
(choose the best)
• Substantial: large enough for profit (Ned
Flanders)
• Operational: workable (identify then
access  China)
Bases for Segmenting Markets
Geography
• Region
• Market size
• Market
density
• Climate
Demographics
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Age
Gender
Income
Ethnicity
Family life
cycle
Psychographics
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Personality
Motives
Lifestyle
Geodemographics
Benefits
• Benefits
sought
Usage Rate
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Former
Potential
1st time
Light or
irregular
• Medium
• Heavy
Demographic Segmentation:
Family Life Cycle
Psychographic Segmentation
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Personality (cars)
Motives (emotions)
Lifestyles (outdoor)
Geodemographics (PRIZM)
Benefit Segmentation
• Group consumers via needs/wants (NOT
by gender, age, lifestyle etc.)
• What do you want from your cell phone?
Usage Rate Segmentation
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Group by amount/rate of consumption
Former apple users
Potential apple users
Light apple users
Heavy apple users
80/20 principle of demand
6 Steps to Segment a Market
Select
a market
for
study
Choose
bases
for
segmentation
Select
descriptors
Profile
and
analyze
segments
Select
target
markets
Design,
implement,
maintain
marketing
mix
Strategies for Selecting Target
Markets
Options…
– Undifferentiated Targeting
• One market, one mix (plain toilet paper)
• Any other examples?
– Concentrated Targeting
• Multiple markets & mix for each
• Examples include Ford, Lincoln, Mercury, and what else?
– Multi-segment Targeting
• Multiple markets share mix (bad idea)
• Advantages = Greater financial success; Economies of scale
Disadvantages= High costs; Cannibalization
Strategies for Selecting Target
Markets
• Options
– Undifferentiated Targeting
• One market, one mix (plain toilet paper)
• Any other examples?
– Concentrated Targeting
• Multiple markets & mix for each
• Examples include Ford, Lincoln, Mercury, and what else?
– Multi-segment Targeting
• Multiple markets share mix (bad idea)
• Example: network television and any more?
One-to-One Marketing
One-to-One
Marketing is...
Has a Goal of…
Individualized
Cost Reduction
Information-Intensive
Customer Retention
Long-Term
Increased Revenue
Personalized
Customer Loyalty
One-to-One Marketing
Trends
•One-size-fits all marketing is lame.
•Direct/personal marketing will grow to meet
needs of busy consumers.
•We will be loyal to companies that have
earned—and reinforced—our loyalty.
•Mass-media approaches will decline as
technology allows better customer tracking.
Marketing Strategy
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Matching opportunity with resources and
business objectives
Goals:
1. SCA
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Enduring superiority of a business
BEST: from many parts (Wal-Mart)
2. Breakthrough opportunity
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Conditions right for SCA
Positioning
Developing a marketing mix
to influence potential
customers’ overall
perception of a brand,
product line, or organization
in general.
How is Wal-Mart
Positioned?
Positioning
Bases
Attribute
Price and Quality
Use or Application
Product User
Product Class
Competitor
Emotion
Positioning of
Procter & Gamble
Detergents
Brand
Positioning
Tide
Cheer
Bold
Gain
Era
Dash
Oxydol
Solo
Dreft
9
Ivory
Snow
LO
Ariel
Tough, powerful cleaning
Tough cleaning, color protection
Detergent plus fabric softener
Sunshine scent, odor-removing
Stain treatment and stain removal
Value brand
Bleach-boosted formula, whitening
Detergent and fabric softener in liquid form
Cleaning for baby clothes, safe
Fabric & skin safety on baby clothes
Tough cleaner, aimed at Hispanic market
Market
Share
31.1%
8.2%
2.9%
2.6%
2.2%
1.8%
1.4%
1.2%
1.0%
0.7%
0.1%
Effective
Positioning
1. Assess the positions occupied by
competing products
2. Determine the dimensions underlying
these positions
3. Choose a market position where
marketing efforts will have the
greatest impact
Product
Differentiation
A positioning strategy
that some firms use to
distinguish their
products from those of
competitors.
Are distinctions real or
perceived?
Perceptual
Mapping
Daimler Chrysler:
Do they need a reposition?
(Changing consumers’ perceptions of a brand
in relation to competing brands)
Summary
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Generic vs product markets
Segmentation: Criteria
Bases for segmenting
Strategies of segmentation
(effective)Positioning/repositioning, bases
Any questions?