Transcript Marketing Segmentation

Marketing Segmentation
Targeting and Positioning
Market Segmentation Defined
Market segmentation involves aggregating
prospective buyers into groups that:
1. Have common needs and
2. Will respond similarly to the marketing
action.
The groups that result from the
market segmentation process are
called market segments, a relatively
homogeneous collection of prospective buyers.
Product Differentiation Defined
Product differentiation, in the broadest sense,
involves a firm’s using different marketing mix
activities, such as product features and
advertising, to help consumers perceive the
product as being different and better than
competing products.
In a narrower sense, product differentiation
involves a firm’s selling two or more products with
different features targeted to different market
segments.
When to Segment Markets?
1. One Product & Multiple Market
Segments
2. Multiple Products & Multiple Market
Segments
3. Segments of One: Mass Customization
Five Steps in Segmenting and Targeting
Markets
•Form prospective buyers into
segments
Identify
market
needs
•Form products to be sold into
groups
•Develop a market-product grid
and estimate size of markets
•Select target markets
•Take marketing actions to reach
target markets
1. Forming buyers into segments
1. Potential for increased profit and ROI.
2. Similarity of needs of potential buyers within a
segment.(Homogeneity)
3. Difference of needs of buyers among
segments.(Heterogeneity)
4. Feasibility of marketing action to reach a
segment.
5. Simplicity and cost of assigning potential
buyers to segments.
Canadian Consumer Market Segmentation Variables
MAIN DIMENSION
SEGMENTATION
VARIABLES
TYPICAL
BREAKDOWNS
CUSTOMER CHARACTERISTICS
Geographic
Demographic
Region
City or Census
Metropolitan area
(CMA) size
Density
Climate
Atlantic, Quebec, Ontario, Prairies, British Columbia
Under 5,000; 5,000-19,999; 20,000-49,999; 50,000-99,999;
100,000-249,999; 250,000-499,999; 500,000-999,999;
1,000,000 or more
Urban; suburban; small town; rural
East; West
Gender
Age
Male; female
Under 6; 6-11; 12-17; 18-24; 25-34; 35-44; 45-54; 55-64; 65-74;
75 and over
Race
Life Stage
Income
White; Black; Asian; Native; other
Young single; young married; older married; etc.
Under $10,000; 10,000-19,9999; 20,000-29,999; 30,000-39,999
40,000-54,999; 55,000-74,999; $75,000+
Family size
Home ownership
Education
1; 2; 3; 4; 5 or more
Own home; rent home
Grade school or less; some high school; high school graduate;
some college; college graduate
Canadian Consumer Market Segmentation Variables
MAIN DIMENSION
SEGMENTATION
VARIABLES
TYPICAL
BREAKDOWNS
CUSTOMER CHARACTERISTICS
Behavioural
Psychographic
Benefits sought
Usage rate
User status
Loyalty status
Quality; service; low cost
Light user; medium user; heavy user
Non-user; ex-user; prospect; first-time user; regular user
None; medium; strong
Personality
Gregarious; compulsive; extroverted; introverted
Lifestyle (GoldFarb
Segments)
Structured; discontented; fearful; assured;
resentful; caring
2. From products to be sold into
groups
• The products a firm sells must be
formed into meaningful groups so
customers can relate to them.
• This is the reason supermarket products
are organized into similar groups by
aisles and department store offerings by
department
3. Develop a market-product grid and
estimate size of markets
PRODUCTS: MEALS
BREAKFAST
MARKETS
STUDENT
Dormitory
Apartment
Day Commuter
Night Commuter
NONSTUDENT
Faculty or Staff
Live in area
Work in area
0
1
0
0
0
0
1
LUNCH
BETWEENMEAL
SNACK
DINNER
AFTERDINNER
SNACK
1
3
3
0
3
3
2
1
0
2
1
3
3
1
0
2
3
1
3
1
2
0
1
2
1
0
1
0
Key: 3 Large market; 2 medium market; 1 small market; 0 no market
4. Select target markets
a) Criteria to Use in Picking the Target Segments
1. Size: The estimated size of the market to determine
whether or not it is worth going after.
2. Expected Growth: The size of the market may be small,
but if it is growing significantly it may be worth going after.
3. Competitive position: The less competition the more
attractive the market.
4. Cost of reaching the market: Is the market accessible to
a firm’s marketing actions? If not it should not be pursued.
5. Compatibility with the organization’s objectives
and resources.
b) Choose the segments
5. Take marketing actions to reach
target markets
• The purpose of developing a marketproduct grid is to trigger marketing
actions to increase revenues and
profits.
• Develop and execute an action plan.
Analyzing Market Segments
A cross tabulation, or “cross-tab” is . . . .
a method of presenting and relating data having two
or more variables. Cross tabs are used to analyze
and discover relationships in the data.
An important aspect of cross tabulations is
deciding which two variables should be paired
together for analysis.
Cross Tabulations
1. Paring the questions. Which questions to
cross tabulate.
2. Forming cross tabulations. Examining the
answers to the two chosen questions
1.
2.
3.
4.
Raw data
Row percentages
Column percentages
Total percentages
Cross Tabulations
A. ABSOLUTE FREQUENCIES
AGE OF
HEAD OF
HOUSEHOLD
(YEARS)
24 or less
25 to 39
40 or over
Total
ONCE
A WEEK
OR MORE
144
46
82
272
FREQUENCY
2 OR 3
TIMES
A MONTH
52
58
69
179
ONCE
A MONTH
OR LESS
19
29
87
135
TOTAL
215
133
238
586
B. ROW PERCENTAGES: RUNNING PERCENTAGES HORIZONTALLY
AGE OF
HEAD OF
HOUSEHOLD
(YEARS)
24 or less
25 to 39
40 or over
Total
ONCE
A WEEK
OR MORE
67.0%
34.6
34.4
46.4%
2 OR 3
TIMES
A MONTH
24.2
43.6
29.0
30.6%
ONCE
A MONTH
OR LESS
8.8
21.8
36.6
23.0%
TOTAL
100.0%
100.0
100.0
100.0%
Product Positioning
Product Positioning refers to the place an offering
occupies in consumers’ minds on important attributes
relative to competitive offerings.
1.
2.
Head-to-Head Positioning: involves competing
directly with competitors on similar attributes in
the same target market.
Differentiation Positioning: involves seeking a
less competitive, smaller market niche in which
to locate a brand.
Positioning: Using Perceptual Maps
A key to positioning a product effectively is the
perceptions of consumers. In determining a
brand’s position and the preferences of
consumers, companies obtain three types of data
from consumers:
1. Evaluations of the important attributes for a
product class.
2. Judgments of the existing brands with the
important attributes.
3. Ratings of an “ideal” brand’s attributes.
Repositioning
Repositioning involves
changing the place an
offering occupies in a
consumer’s mind relative to
competitive offerings.