Transcript Market Segmenting

Market Segmenting and
Communication
INF5290
L.Monrad-Krohn
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Market Segmenting
• Why marked segmenting?
– Product Development,
– Sales and Marketing
– Price determination
• Fundamental market segmenting:
– Consumer
– Business
– Geographical area
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Market Segmenting2
• Consumer segmenting:
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Sex
Age
Income
Education
Family situation
Hobby and interests
Occupation
Geographic location
Cultural background
Immediate situation
• Business segmenting:
– Industry type
– Fixed asset vs raw material
vs consumables
– Product quality and price:
High. Medium and Low
– Business Scale:
Fortune500, Medium and
Small, Start-Up
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Market Segmenting3
• Task of segmenting market is the key to
efficient Sales work (And product development)
– Sharper segment lead to easier sales work
• Ultimate segment: Single person
• How to define a group with common traits
making them likely to buy the product or
service?
– Not easy, but most important for success
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Market Segmenting4
• Try defining market segments for
– jewellery
– small footprint browser
– system for Word-template making with parameters
• Segment attributes may also be defined (in
reverse) from the nature of the sales organization
used.(Home party, multilevel marketing, door
selling, government agency)
– Market segment is characterized by its attributes
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How to reach the market
segment?
• When the attributes of the marked segment
are defined, the product price range must be
considered to select the communication
channels to the market,
• i.e. Are we selling an Oil Company Office
Workflow system at NOK 30 000k, or a
personal hard disk search engine at NOK
300 ?
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Market Segmenting5
– The product, service or brokerdeals must solve
some problem or fill a need with the potential
customer. (FRUST)
– In a simple way the segment could be defined
by this problem or need,(FRUST) but this gives
us no handle to create the communication
channels for our promise
– Question is: How to limit our communication to
the segment. (In order to save money)?
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Market communication
– To inform people (decision makers) about our
promise costs money
• which has to be retrieved from the price paid by the
customer
– Lower cost for market communication-> lower
customer price->more sales->more profit->higher
growth
• Better defined market segment-> lower cost market
communication->higher growth
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Market communication 2
• Market(segment) communication channels:
• Advertisements in
– Newspapers, Periodicals, Radio, TV, Internet-sites, Poster
sites, Public transportation sites etc etc
• Direct mail campaigns through:
– Snailmail, Willing internet mail receipients
• Personal direct sales:
– By appointment, Door to door
• Magazine (TV or Newspaper etc) editorials and
product news
• Word of mouth
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Types of market communications
• Image building:
• It is difficult to sell a product to someone that has
not heard of the company, nor the product
• Aim to build company awareness, reputation, or
change a reputation
• Product selling
• Track response to find out which channels are
profitable
• “Never an ad without a coupon”
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Market communication and
perceived value of product
• Some times market segment messages
should be audited and remade. (“The
promise”)
• It may not be obvious for us what values the
customers attach to the product and company (after
initial sales and some passing of time)
• Means to find out:
• Questionaires
• Closed Customer Conferences
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Market communication channels
and product distribution channels
– Market communication channels and product
distribution channels are generally not the same
• Product channels must be trained and informed about
Market Strategy and Messages, and motivated on a
regular weekly, monthly or quarterly basis
• Product channels create “push” for product
• Market communication create “pull”
• For market communication it should be assumed that
product channels are passive (And vica versa)
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Market channels and Internet
• It is generally understood that B2B and B2C
sales will expand greatly these days, and create a
collapse of the (up till now) usual product
distribution channels
– Goods are ordered over the Net and delivered by
Snailmail, UPS, etc (logistics being the weaker link)
– Orders received
• by e-mail or
• integrated with sellers ERP (or CRM)
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Market channels and Internet-2
• Customer personal profiles may be generated
acording to recorded browse pattern to create instant
classification and communication adaption (Except
in Norway)
• The old distributor to reseller chain with the
corresponding margins is replaced (collapsed)
– by Site Link Agent commission payment, (possibly in
several steps), when customer is buying at the final site
which has been reached trough other links, which will be
sharing in the profit of the sale made.
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Market channels and Internet 2
• Challenges for selling over the Net are to :
– 1 Integrate Orders received by the Net with the rest
of the company’s logistics, accounting and billing
system,(EPR-system, Back office system)
– 2 Integrate Customer communication over the Net
with customer communication over telephone and
mail (with human beings possibly using a separate
CRM- system)
– 3 Differenciate Site according to market segment
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