Transcript Topic Five PowerPoint File

Principles of Marketing 541
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This is possibly the most important topic of
this entire course.
All marketing strategy and tactics need a
good understanding of the principles you will
be shown in this topic.
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Listen
Absorb
Study and
Reflect
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6. Develop Marketing
Mix for Each Target Segment
5. Develop Positioning
for Each Target Segment
4. Select Target
Segment(s)
3. Develop Measures
of Segment Attractiveness
Market
Positioning
Market
Targeting
2. Develop Profiles
of Resulting Segments
1. Identify Bases
for Segmenting the Market
Market Segmentation
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Market Segmentation Definition:
◦ Dividing a market into distinct groups with distinct
needs, characteristics, or behaviour who might require
separate products or marketing mixes.
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A total market is divided into clusters, or subgroups or ‘segments’ – each has special features,
attributes and buying characteristics.
Think of an orange as the total market. Peel off
the skin and there are segments, break the
segments and there are small pieces of orange
inside.
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Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Niche Marketing
Different products to subgroups within segments
( more segmentation)
Micromarketing
Products to suit the tastes of individuals or locations
(complete segmentation)
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Geographic
Nations, provinces,
regions or cities
Demographic
Age, gender, family size and
life cycle, or income
Psychographic
Social class, lifestyle,
or personality
Behavioural
Occasions, benefits,
uses, or responses
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Geographic Segmentation
Variables
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World region
or country
China region
Province or State
City
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Neighbourhood
City or
metro size
Density
Climate
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Demographic Segmentation Variables
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Age
Gender
Family size
Family life cycle
Income
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Occupation
Education
Religion
Race
Generation
Nationality
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Where groups are
divided based on their
social class, lifestyle
or personality
characteristics.
People in the same
geo-demographic
groups often have
different
psychographic
profiles
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Socioeconomic
Status
Values
Attitudes
Lifestyle groupings
Personality
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Behavioral Segmentation
Variables
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Occasions
Benefits
User Status
Attitude Toward the
Product
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User Rates
Loyalty Status
Readiness Stage
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Personal
Characteristics
Situational
Factors
Demographics
Bases
for Segmenting
Business
Markets
Operating
Characteristics
Purchasing
Approaches
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International Markets
Geographic
Cultural
Economic
Political/
Legal
Intermarket
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Measurable
• Size, purchasing power, profiles
of segments can be measured.
Accessible
• Segments must be effectively
reached and served.
Substantial
• Segments must be large or
profitable enough to serve.
Differential
• Segments must respond
differently to different marketing
mix elements & actions.
Actionable
• Must be able to attract and serve
the segments.
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Target Market Definition
◦ Consists of a set of buyers who share common needs
or characteristics that the company decides to serve
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Segment Size and Growth
◦ Analyse sales, growth rates and expected profitability.
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Segment Structural Attractiveness
◦ Consider effects of:
 Competitors,
 Availability of Substitute Products and,
 the Power of Buyers & Suppliers.
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Company Objectives and Resources
◦ Company skills & resources relative to the segment (s).
◦ Look for Competitive Advantages.
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Selecting Target Market Segments
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Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing (local or individual)
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Company
Marketing
Mix
Market
A. Undifferentiated Marketing
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 1
Segment 2
Segment 3
B. Differentiated Marketing
Company
Marketing
Mix
Segment 1
Segment 2
Segment 3
C. Concentrated Marketing
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Company
Resources
Product
Variability
Product’s Stage
in the Product Life Cycle
Market
Variability
Competitors’
Marketing Strategies
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Positioning Definition:
◦ The place the product occupies in consumers’ minds
relative to competing products.
◦ Typically defined by consumers on the basis of
important attributes.
◦ Involves implanting the brand’s unique benefits and
differentiation in the customer’s mind.
◦ Positioning maps that plot perceptions of brands are
commonly used.
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Product’s Position - the place the product
occupies in consumers’ minds relative to
competing products; i.e. Volvo positions on
“safety”.
Marketers must:
◦ Plan positions to give products the
greatest advantage
◦ Develop marketing mixes to create
planned positions
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Product
Class
Away from
Competitors
Product
Attributes
Benefits
Offered
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C
A
Against a
Competitor
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B
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Usage
Occasions
Users
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Step 1. Identifying a set of possible
competitive advantages: Competitive
Differentiation.
Step 2. Selecting the right competitive
advantage.
Step 3. Effectively communicating and
delivering the chosen position to the
market.
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Important
Profitable
Affordable
Preemptive
Criteria
for
Determining
Which
Differences
to
Promote
Distinctive
Superior
Communicable
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Product
Service
Areas for Competitive
Differentiation
Personnel
Image
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Companies must be certain to DELIVER their
value propositions.
Companies must communicate to their
customers the value they are presenting.
This can be done through the marketing mix:
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Product
Price
Place
Promotion
Positions must be monitored and adapted
over time.
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