Principles of Marketing

Lecture-18

Summary of Lecture-17

Market Segmentation

Segmentation

Major Steps in Target Marketing

Segmentation

Target Marketing Market Positioning

Segmentation Variables
Geographical segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation

Todays Topics

Market Segmentation (cont..)

How Segments are Developed?

Segmentation plans developed through a 3-stage process

survey analysis

interpretation

Bases for Segmenting Business Markets

Demographics Business Marketers Use Many of the Same Consumer Variables, Plus:

Operating Variables

Purchasing Approaches

Situational Factors

Personal Characteristics

Demographic segmentation Industry, company size, location Operating variables Technology, usage status, customer capabilities Purchasing approaches

Situational factors Urgency, specific application, size of order Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty

Bases for Segmenting International Markets

Geographic Location

Cultural Factors

Factors Used to Segment International Markets

Economic Factors

Political and Legal Factors

Geographic segmentation Location or region Economic factors Population income or level of economic development Political and legal factors Type / stability of government, monetary regulations, amount of bureaucracy, etc. Cultural factors Language, religion, values, attitudes, customs, behavioral patterns

Intermarket Segmentation
Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries

Requirements for Effective Segmentation

Measurable
Accessible Substantial Differential

Size, purchasing power, profiles of segments can be measured.

Segments must be effectively reached and served. Segments must be large or profitable enough to serve. Segments must respond differently to different marketing mix elements & actions.
Must be able to attract and serve the segments.

Actionable

Target Marketing

Steps in the Target Marketing Process

Evaluating Market Segments Selecting Target Market Segments

Evaluating Market Segments

Segment Size and Growth Analyze sales, growth rates and expected profitability. Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. Company Objectives and Resources Company skills & resources relative to the segment (s). Look for Competitive Advantages.

Choosing a MarketCoverage/Target-Marketing Strategy

Target Marketing Strategies

Market Coverage Strategies

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

Company Marketing Mix

Individual Customer

D. Custom Marketing Strategy or Micromarketing Strategy

Positioning for Competitive Advantage

Products 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

Choosing and Implementing a Positioning Strategy

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.

Positioning Strategy Development Process

Identify the competitors.
Assess perceptions of them.

Determine their positions.

Analyze consumer preferences. Make the positioning decision.

Product

Service

Areas for Competitive Differentiation

Personnel

Image

Identifying Possible Competitive Advantages

Product Differentiation i.e. Features, Performance, Style & Design, or Attributes
Image Differentiation i.e. Symbols, Atmospheres, Events

Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services
Personnel Differentiation i.e. Hiring, Training Better People Than Competitors Do

Six Positioning Questions

What position do we have now?

What position do we want to own?

From whom must we win this position? Do we have the money to do the job?

Do we have the tenacity to stay with it?

Does our creative strategy match it?

Positioning By What?
Product Attributes Price/Quality Use or Application Product Class Product User Competitor Cultural Symbols

A Strategic Resource Must Be:

Hard to copy Durable Tied to the company Not substitutable Superior

Summary

Market Segmentation (cont..)

Bases for Segmenting Business Markets

Bases for Segmenting International Markets

Requirements for Effective Segmentation

Measurable
Accessible Substantial Differential

Size, purchasing power, profiles of segments can be measured.

Segments must be effectively reached and served. Segments must be large or profitable enough to serve. Segments must respond differently to different marketing mix elements & actions.
Must be able to attract and serve the segments.

Actionable

Target Marketing

Positioning for Competitive Advantage

Next.

Marketing Mix 4 Ps

Principles of Marketing
Lecture-18