Planning II:

1
Session 3
Planning II Segmentation, Targeting Positioning
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Session 3 Outcomes

• Explain why and how to develop a target marketing
  strategy
• Explain what is segmentation and how companies
  segment markets
• Explain what is targeting and how firms select
  commercial targets
• Explain what is positioning and how companies
  implement it
• Understand how all this fit into your marketing
  plan

3
Session 2 Key Concepts

• Market fragmentation
• Target marketing strategy
• Segmentation, targeting positioning
• Behavioural, psychographic demographic
  variables
• Baby boomers
• Segment profile
• Undifferentiated, differentiated, concentrated
  customized marketing

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Planning I Recap

• Plan how to plan (e.g. top down vs. bottom up)
• Strategic plan
• Mission
• Business objectives
• Marketing plan
• Functional plans
• Budget

Today ?
Philosophy or paradigm
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Markets Evolve
McDonalds (c. 1955)
McDonalds
Burger King
Pita Fast
Tim Hortons
Wendys
Subway
Taco Bell
AW
(c. 2005)
Manchu Wok
Curry Express
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Steps in Target Marketing
Fig. 3.1, p. 64 Solomon et al.
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Steps in TM Select Market

• 1. Market All potential customers who
• Share a common need
• Have the resources to exchange for a product
• Are willing to make the exchange and
• Have the authority to make an exchange.

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Steps in TM Segment
Segmentation Divide the market into subgroups
(segments) based on one or more meaningful
characteristic
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Segmentation Variables
Demographics
Age, sex, income, family life cycle - Objective,
groups measurable using census data - Limited
predictive power
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Demographics Age Pyramid
Source StatCan http//www.statcan.ca/english/kit
s/animat/pyca.htm
Baby boomers Age cohort born 1947-1966 approx.
1/3 of Canadians
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Segmentation Variables
Psychographics

• Psychological variables Attitudes, values,
  personality, opinions, etc.
• Subjective, research is key to determine groups
• May help predict behaviour but still
  controversial

VALS (USA) http//www.sric-bi.com/VALS/
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Segmentation Variables
Behavioural

• Actual behaviour with regard to the product
  Benefits sought, how they buy, how they use, etc.
• Objective but research is key to determine
  groups
• Alone, these tell little about reasons of
  behaviours

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Segmentation Create Profiles
Typical customer in a segment
Enrich your target definition with other
variables ? Visualize targets
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Developing a Strategy
3. Targeting Evaluate each segments
attractiveness, company resources, and select a
target
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Targeting Strategies
Concentrated
U
Niche
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Targeting Strategies
Undifferentiated
Pu
Pu
Pu
Pu
Pu
Pu
Pu
Pu
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Targeting Strategies
Differentiated
B
C
A
D
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Targeting Strategies
Customization
Pa
Pe
Pb
Pd
Pc
Pf
Also Mass Customization
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Developing a Strategy
4. Positioning Either Development of a
strategy to have our product perceived the way we
want by the target segment or, The position
itself A distinct hole in the consumers mind
(Al Ries Jack Trouts Positioning book) - Is
built through the marketing mix
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Positioning
Pushy Too Smart Manipulative
Proactive Smart Sweet
Brand Concept
Brand Image
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Positioning has to Be Sustainable!
Customer Intimacy Microsoft
Product Leadership BMW
Whats your competitive advantage?
Operational Excellence Wal-Mart
Symbolism Coke
Youve got one, right?
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Positioning Strategies
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Perceptual Mapping
Source Wikipedia
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Positioning/Factual Mapping
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Marketing Mix

• Create and execute marketing mix programs
• Product
• Price
• Place
• Promotion

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Marketing Plan

• Executive Summary
• Table of Contents
• Current Market Situation
• Environmental Analysis
• Competitor Analysis
• Analysis of Macro Environment
• Customer analysis
• SWOT Analysis

Market selection
STP deduced from their marketing mix
Segmentation analyses
Targeting Positioning Weigh Options
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Marketing Plan

• Objectives to be achieved
• Financial objectives
• Marketing objectives
• Other objectives
• Marketing strategies
• Product
• Pricing
• Distribution channels
• Promotions

Targeting Positioning Explicitly
Marketing mix
Targeting Positioning
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Session 3 Wrap Up

• Target market strategy (TMS) is a framework to
  identify and seize opportunities in markets with
  several players where competition is likely to be
  intense
• Proper segmentation is achieved by identifying
  meaningful variables and dividing up the market
  using them as grouping criteria
• Targeting is a strategic exercise performed in a
  SWOT fashion which is aimed at identifying the
  most profitable segments where the organization
  can launch its product successfully

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Session 3 Wrap Up

• Positioning aims at identifying a distinct spot
  or hole in the consumers mind where the brand,
  as a symbolic construction, can have a
  significant impact on the intent to purchase the
  actual product
• The TMS approach is fully captured by the
  marketing plan in the formulation we have
  discussed

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Thanks.