Transcript CH06 - Surej P John

Marketing : An Introduction
An Asian Perspective
Armstrong, Kotler
& da Silva
6
Segmentation, Targeting, and
Positioning: Building the Right
Relationships with the Right
Customers
© Armstrong, Kotler & da Silva
Marketing : An Introduction
An Asian Perspective
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ROAD MAP: Previewing the Concepts
• Define the three steps of target marketing: market
segmentation, market targeting, and market
positioning.
• List and discuss the major bases for segmenting
consumer and business markets.
• Explain how companies identify attractive market
segments and choose a target marketing strategy.
• Discuss how companies position their products for
maximum competitive advantage in the
marketplace.
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An Asian Perspective
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An Asian Perspective
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P&G
Detergents
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An Asian Perspective
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P&G
Shampoo
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An Asian Perspective
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Opening Case – Procter & Gamble
Strategy
• Sells multiple brands within the same product category for
detergents, soaps, and other goods.
• Laundry detergents ( TIDE, CHEER, GAIN etc.)
• Shampoo ( Pantene, Head & Shoulders, Aussie, Herbal
Essences etc.)
• Deodorant ( Secret, Sure, Old Spice)
• Each brand features a different mix of benefits and appeals to a
different segment.
• Tide provides “ fabric cleaning and care at its best”. It’s the all
purpose family detergent that “helps
• Product modifications appeal to different niches within certain
segments.
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Marketing : An Introduction
An Asian Perspective
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The result
• P&G generates revenues in excessive of
$4 billion in U.S. laundry detergent market
alone.
• Tide has 34% share of powder and 24%
share of liquid market segments.
• Combined, all P&G brands account for
75% share of powder and 55% share of
liquid detergent markets.
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An Asian Perspective
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Market Segmentation
• The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
• A market segment consists of consumers
who respond in a similar way to a given
set of marketing efforts.
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Marketing : An Introduction
An Asian Perspective
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Target Marketing
• Involves
evaluating each
market segment’s
attractiveness and
selecting one or
more segments to
enter.
• Target segments
that can sustain
profitability.
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Marketing : An Introduction
An Asian Perspective
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Market Positioning
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers
• Setting the competitive positioning for the
product and creating a detailed marketing
mix
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An Asian Perspective
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Steps in Market Segmentation, Targeting,
and Positioning
Figure 6.1
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An Asian Perspective
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Segmentation types:
1. Geographic segmentation
2. Demographic segmentation
3. Psychographic segmentation
4. Behavioral segmentation
5. Benefits sought
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Marketing : An Introduction
An Asian Perspective
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Marketing : An Introduction
An Asian Perspective
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Geographic Segmentation
• Geographic segmentation calls for dividing the
market into different geographical units such
as nations, cities, or even neighborhoods.
– A company may decide to operate in one or few
geographical areas, or to operate in all areas but pay
attention to geographical differences in needs and
wants.
– Many companies today are localizing their products,
advertising, promotion and sales efforts to fit the needs
of individual regions, cities.
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Marketing : An Introduction
An Asian Perspective
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An Asian Perspective
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Demographic Segmentation
•
•
•
•
•
•
Income
Population
Age distribution
Gender
Education
Occupation
What are the trends?
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Demographic segmentation
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An Asian Perspective
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Demographic Segmentation
• Demographic factors are the most popular
bases for segmenting customer groups.
• One reason is that customer needs, wants and
demands often vary closely with demographic
variables.
• Another is that demographic variables are easier
to measure than most other types of variables.
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An Asian Perspective
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THAILAND-Demographic facts
Nationality: --Thai.
Population (2009 est.): 67.0 million.
Labor force (2009 est.): 38.4 million.
Annual population growth rate (2009 est.): 0.5%.
Ethnic groups: Thai 89%, other 11%.
Religions: Buddhist 93%-94%, Muslim 5%-6%, Christian 1%,
Hindu, Brahmin, other.
Languages: Thai (official language)
Education: Years compulsory--9.
Literacy--94.9% male, 90.5% female.
Life expectancy--70.51 years male, 75.27 years female.
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Age Segmentation
• Global Teens–young
people between the ages of
12 and 19
– A group of teenagers
randomly chosen from
different parts of the world
will share many of the same
tastes
• Global Elite–affluent
consumers who are well
traveled and have the money
to spend on prestigious
products with an image of
exclusivity
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Gender Segmentation
• In focusing on the
needs and wants of
one gender, do not
miss opportunities
to serve the other
• Companies may
offer product lines
for both genders
– Nike, Levi Strauss
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Income based segmentation
• Income segmentation is dividing a market into
different income groups.
– Identifies and targets the affluent for luxury goods.
– People with low annual incomes can be a lucrative
market.
– Some manufacturers have different grades of
products for different markets.
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Unilever-Soaps
• Lower income- Life buoy, Lyril etc.
• Middle income- LUX
• Higher income - DOVE
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Psychographic segmentation
• Psychographic segmentation divides buyers into different groups
based on social class, lifestyle, and personality characteristics.
• People in the same demographic group can have very different
psychographic makeup.
• Following are the main bases of psychographic segmentation
– Social class
– Lifestyle
– Personality
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Psychographic Segmentation
• Grouping people according to attitudes, values, and lifestyles
Porsche example from SRI International
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Top Guns (27%): Ambition, power, control
Elitists (24%): Old money, car is just a car
Proud Patrons (23%): Car is reward for hard work
Bon Vivants (17%): Car is for excitement, adventure
Fantasists (9%): Car is form of escape
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Social class & Lifestyle
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Behavioral segmentation
• Behavioral segmentation divides buyers into
groups based on their knowledge, attitudes,
uses, or responses to a product.
• Many marketers believe that behavioral
variables are the best starting block for
building market segments.
• Focus on whether people purchase a product
or not, how much, and how often they use it
• User status
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Behavioral segmentation
OCCASIONS
•Buyers can be grouped accordingly to occasions when they
get the idea to buy, actually make their purchase, or use their
purchased item. Occasion segmentation can help firms to
build up product usage.
•Some holidays , such as Mother’s day , Father’s day ,
Valentines day etc. are promoted partly to increase the sales
of chocolates, candies, flowers, cards etc.
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Benefit Segmentation
• Benefit segmentation focuses on the value equation
– Value=Benefits/Price
• Benefit segmentation requires finding the major
benefits people look for in the product class, the
kinds of people who look for each benefit and the
major brands that deliver each benefit.
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User status & Usage rate
USER STATUS
•
Markets can be segmented into Non Users, Ex.Users, Potential Users, First time Users,
and Regular users of the product.
•
For example, Blood banks cannot rely only on regular donors. They must also recruit
new first time donors, and remind ex. Donors- each will require different marketing appeals.
USAGE RATE
•
Markets can also be classified into LIGHT, MEDIUM, HEAVY product users. Heavy
users are often a small percentage of the market but account for a high percentage of total
consumption.
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Loyalty status
• A market can also be segmented by consumer
loyalty
• Other consumers are somewhat loyal- they are
loyal to two or three brands of a given product or
favor one brand while sometimes buying others.
• Still other buyers show no loyalty to any brand.
They either want something different each time
they buy or they buy whatever on sale
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Requirements for Effective
Segmentation
Accessible
Measurable
Substantial
Differentiable
© Armstrong, Kotler & da Silva
Actionable
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An Asian Perspective
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Evaluating Market Segments
• Segment Size and Growth
– Analyze current segment sales, growth rates, and
expected profitability.
• Segment Structural Attractiveness
– Consider effects of: competitors, existence of
substitute products, and the power of buyers &
suppliers.
• Company Objectives and Resources
– Examine company skills & resources needed to
succeed in that segment.
– Offer superior value and gain advantages over
competitors.
© Armstrong, Kotler & da Silva
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An Asian Perspective
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Determining Market Segment Attractiveness
Figure 6.4
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An Asian Perspective
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Target Marketing Strategies
Figure 6.5
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Marketing : An Introduction
An Asian Perspective
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Undifferentiated Marketing
• Focus is on common (not
different) needs of
consumers.
• Product and marketing
program are geared to the
largest number of buyers.
• Uses mass advertising and
distribution and aims to
give the product a a
superior image .
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Concentrated Marketing
• The focus is acquiring a large share of one
or a few segments of niches.
• Generally, there are fewer competitors.
• The Internet is ideal for targeting small
niche markets.
• There is some risk in focusing on only one
market.
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Concentrated Marketing
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Differentiated Marketing
• Firm targets several
market segments and
designs separate offers
for each.
• The goal is to have
higher sales and a
stronger position with
each market segment.
• This approach increases
the costs of doing
business.
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Micro Marketing
The practice of tailoring products and marketing programs to suit the
tastes of specific individuals and local customer groups- It includes
Local marketing and Individual marketing.
– Local Marketing: Tailoring brands and promotions to the needs and wants
of local customer groups—cities, neighborhoods, specific stores.
– Individual Marketing: Tailoring products and marketing programs to the
needs and preferences of individual customers.
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Positioning for Competitive Advantage
• Product’s position is the way the
product is defined by consumers on
important attributes.
• The place the product occupies in
consumers’ minds relative to
competing products.
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An Asian Perspective
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Positioning
• Product position: The way the product is defined
by consumers on important attributes – the place
the product occupies in consumers minds relative
to competing products.
• People compare products position based on
– Attribute or Benefit
– Quality and Price
– Use or User
– Competition
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Positioning Map
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Product vs. Brand Positioning
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©2011 Pearson Education, Inc. publishing as Prentice Hall
Positioning Map
© Armstrong, Kotler & da Silva
Marketing : An Introduction
An Asian Perspective
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Choosing a Positioning Strategy
#1 Identify a
set of possible
competitive advantages on
which to build a position
#2 Choose the right
competitive advantages
#3 Select an overall
positioning strategy
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Marketing : An Introduction
An Asian Perspective
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Identifying Possible Competitive Advantages
• Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value.
• Competitive advantage – extent to which a
company can position itself as providing
superior value.
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Marketing : An Introduction
An Asian Perspective
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Identifying Possible Competitive Advantages
Product
Differentiation
Services
Differentiation
(e.g., consistency,
durability, reliability,
repairability)
(e.g., speed, convenience,
careful delivery)
Channel
Differentiation
People
Differentiation
Image
Differentiation
(e.g., hiring, training
better people than
competitors)
© Armstrong, Kotler & da Silva
(e.g., convey benefits and
positioning)
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An Asian Perspective
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Product Differentiation
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An Asian Perspective
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Services Differentiation
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An Asian Perspective
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Channel Distribution
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An Asian Perspective
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People
Differentiation
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An Asian Perspective
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Image Differentiation
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An Asian Perspective
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Choosing Right Competitive Advantages
Important
Profitable
Distinctive
Affordable
Superior
Communicable
Preemptive
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Marketing : An Introduction
An Asian Perspective
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An Asian Perspective
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