The Management of Markets MBA530

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The Management of Markets MBA530

• Week 5 Agenda
• 1. Admin Projects feedback from last week
• 2. Today Marketing Segmentation consumer
  industrial markets

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Admin Stuff

• Project Presentations Schedule
• Thursday afternoon students presenting then
  need only attend Thursday afternoon.
• Example videos from last year
• How did you like the live case study last week?
  Comments and feedback

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Target Markets From a wide to a narrow focus

• Once we are certain we can operate in the market,
  we can move to specific demand groups target
  markets within the geographic market.
• Who are the target market groups for SoyQuick?
• Singapore video Is 400 million families a
  good target market?

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Researching Potential Target Markets

• Systems of data collection and analysis were
  driven in the past by researchers.
• New economy Every business web site is a data
  collection device.
• Every contest, form, free offer, rebate offer,
  rewards points, etc. is a data collection
  process.
• The data is worth more than the product sale
  (Amazon.com)

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target markets ? Segmentation

• Segmentation breaking down your markets into
  groups of potential buyers
• Consumer markets some very common patterns
  exist easy to start with these
• demographic (about people)
• geographic (where they are)

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Huge range of consumer market segmentation
possibilities

• preferences
• demographics geographics
• Maslows Hierarchy (age-life cycle)
• gender
• income
• generation
• social class
• psychographic (lifestyle, personality, values)
• behavioral (occasions, benefits, status, usage,
  loyalty, readiness, attitude)
• multiple-attribute segmentation
• Success orientation

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Quick segmentation exercise

• SoyQuick?
• Cranberry Juice?
• Singapore segments?

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Business to Business Industrial

• Marketing to other businesses is a completely
  different process
• larger value market, often larger order sizes,
  lower number of customers.
• hard to find good data
• not natural to us as we are consumers ourselves.

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Hotel market segmentation

• Hotels cater to both consumers and industrial
  purchasers.
• One ½ of class 2 groups what are the logical
  consumer segments?
• One ½ of class 2 groups what are the logical
  industrial segments?

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• What seem to be the more important segmentation
  variables for industrial markets?
• What seem to be the key differences between
  consumer and industrial marketing?

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What is this? Patterns...
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Segmentation Steps

• 1. Needs based segmentation
• 2. Segment identification within needs segments.
• 3. Segment attractiveness
• 4. Segment profitability
• 5. Segment positioning
• 6. Test attractiveness of your strategy (acid
  test)
• Marketing mix strategy 4 Ps

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Trouble in Toyland Video

• What segments are apparent in this video?
• What is changing? Why wont the 5 Ottawa stores
  change?
• How do we know a segment is attractive?
• Should we go after one or more segments?
• Wont everyone go after the most attractive ones?
• When does the attractiveness of a segment end?

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Positioning

• When we choose where our product will fit into
  the target markets mind, this is called
  positioning.
• What the buyer sees in their mind is more
  important than what the product is.
• When we purposely promote our product as
  different, this is called differentiation.
• Our goal Choose the most attractive market
  segments, position ourselves well, and
  differentiate clearly in the minds of the buyers.

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What is the most common modes of positioning and
differentiation?

• Easiest (and worst) Higher quality, lower price.
• Most difficult Highest quality, highest price
• Complicating factors Product life-cycle and
  market life-cycle.
• Differentiation Price, quality, personnel,
  location, fashion, first-in, image, brand, ...

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Product / Market Life Cycles

• Positioning changes through product and market
  life cycles.
• Timing is key to successful positioning hit the
  wrong spot on the life cycle and you may outright
  fail!
• Competition changes in different parts of the
  lifecycle.

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Shifting Buyer Behavior Patterns
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Buying Behavior Models

• P. 188 extension of 4Ps PEST
• P. 192 social classes
• P. 198 Family life cycle
• P. 199 VALS segmentation
• P. 200 Tech buyer matrix
• P. 202 Maslows hierarchy
• P. 206 Involvement
• P. 209 Five-stage model
• P. 210 Successive Sets
• P. 212 Stages in purchase decision
• P. 213 Disposal of products model
• P. 214 Health model
• P. 215 Customer Activity Cycle Model
• ...

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Tonight and this week...

• Readings use for projects
• Work on written part of project now!!
• Remember Insights, how things work, and why they
  worked/didnt work not a description of the
  company product!
• Work hard on a short, tight presentation.