Segmentation, Targeting

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Segmentation, Targeting Positioning for
Competitive Advantage
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Marketing Process Involves

• Market orientation as philosophy
• Market segmentation
• Targeting market
• Positioning
• Marketing mix

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Marketing Strategy

• Select base for segmentation and identify
  appropriate market segments e.g. groups,
  individuals, organiztions.
• Evaluate and appraise the market segments
  resulting from the first step.
• Select an overall market targeting strategy and
  specific target segments.
• Tailoring a distinct position in selected markets
• Developing marketing mixes that serve desired
  positioning strategy in the marketplace
• Auditing marketing environments and efforts

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Importance of Segmentation and Targeting

• The focus of a successful marketing program is
  the customer. Effectively marketing must fully
  understand the needs.
• Customers with decent life and individualism have
  Heterogeneous demands, This has given rise to
  need segmenting.
• The process of understanding the customer and
  choosing a group of customer you can serve best
  is targeting.
• So target a segmentation is core of the marketing
  process.

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Identify the Total Market
Identify Total Market
Effective Segmentation
Bases for Segmentation
Select Target Segment
Positioning Strategy
Marketing Mix
Monitor, Evaluate and Control
Objective 3
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Identify the Total Market

• The first step in the target market selection
  process is to specifically define the total
  market of all potential customers for a product
  category.

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Segmentation

• Segmenting means dividing a heterogeneous
  demanding markets into homogenous groups based on
  similar characteristics or traits
• Heterogeneous demand- different groups of
  customers have differing needs from specific
  products.
• Homogeneous segment- the separation of markets
  into distinctive groups based on homogeneous
  characteristics.

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Criteria for successful segmentation
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Criteria for successful segmentation

• Clear differences in consumer preferences for a
  product must exist.

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Criteria for successful segmentation

• Difference preferences for a product must be
  identifiable and capable of being related to
  measurable variables.

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Criteria for successful segmentation

• The proposed market segment must have enough size
  and purchasing power to be profitable.

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Criteria for successful segmentation

• Companies must be able to respond to difference
  preferences with an appropriate marketing mix.

Actionable
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Criteria for successful segmentation

• The proposed market segment must be readily
  accessible and reachable with market programs.

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Bases for Segmentation

• To divide a market into segments, firms use
  segmenting criterion that describe the
  characteristics of each part of the market.

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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base
Income Level

• Life-cycle

Social class
Ethnic
Education
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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base

• Localizes its marketing efforts to specific
  geographic regions

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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base

• Grouping customers together based on social
  class, lifestyles and psychological
  characteristics (attitudes, interests and
  opinions)
• Useful but more difficult to identify and measure
  compared to demographic variables

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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base

• Markets can be segmented based on the benefits
  that consumers desire from using a specific
  product

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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base

• Purchase situation or occasion
• Physical surroundings
• Social surroundings
• Temporal perspective

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Segmentation Base
Demographic Segmentation
Benefits-Sought Segmentation
Situation Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavior/Usage Segmentation
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Segmentation Base

• Markets can be segmented by how often or how
  heavily consumers use a specific product
• Paretos Principle or 80/20 Principle - 80 of
  revenue generated by 20 of customers

Light Users 80
Heavy Users 20
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Segmentation Base

• Information for segmenting markets may be
  obtained from database such as Census, State
  Statistics etc.

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Segmenting Business Markets

• While the steps in the target market selection
  process are essentially the same for business
  markets, there are three major differences
• The purchasing process, which differs greatly
  from the household consumer market.
• The use of different segment variables, in simple
  way, a Standard Industrial classification is
  often employed

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Segmenting Business Markets

• Segmentation variables used to segment business
  markets
• Size
• Industry
• Purchasing approaches
• Product usage
• Situational factors (seasonal trend)
• Geographic

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Targeting

• Targeting choose the specific segment toward
  which a firm directs its market efforts.
• Niche Marketing the process of targeting a small
  market segment with a specific, specialized
  marketing mix (not core products on offer).
• Micromarketing- the process of targeting smaller,
  more narrowly defined market segments.
• On the individual consumer end of the continuum,
  a firm may decide to target individual consumers
  and personalize marketing efforts toward each.

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Advantage of Targeting Efforts

• Can effectively serve all the segments, must
  target marketing efforts to a segment or
  segments.
• Marketing opportunities and unfilled gaps are
  more accurately identified
• Marketing mix is more delicately meet toe
  potential customers needs
• Offer the greatest potential to achieve profit or
  relationship goals

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Targeting Strategy
1.Undifferentiated marketing 2.Differentiated
marketing 3.Concentrated marketing 4.Custom
marketing
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Targeting Strategy
Undifferentiated targeting strategy

• Companies might develop one marketing mix
  strategy that is appropriate for all members of
  the total market.

Concentrated strategy
Differentiated strategy
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Targeting Strategy
Undifferentiated targeting strategy

• Only one marketing mix is developed and directed
  toward a few, or perhaps one, profitable market
  segments.

Concentrated strategy
Differentiated strategy
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Targeting Strategy
Undifferentiated targeting strategy

• Exists when a firm develops different marketing
  mix plans specially tailored for each of two or
  more market segments.

Concentrated strategy
Differentiated strategy
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Positioning

• Positioning
• Kotler defined designing an offer so that it
  occupies a distinct and valued place in the minds
  of the target customer.

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Positioning

• Positioning
• Image that customers have about a product in
  relation to the products competitors

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Positioning Strategy

• Key to developing the appropriate marketing mix
  is the positioning strategy of the product.

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Presumptions of Positioning

• All products have object and subject attributes
• Recognizable
• Comparable

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Select Positioning Strategy

• Effective positioning
• What consumers currently think about the product,
  especially in relation to competing products
• What the marketer wants consumers to think about
  the product
• Which positioning strategy will elevate the
  consumers current product image to the desired
  product image.

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Select Positioning Strategy

• Position Mapping also called as perceptual
  mapping- creating a visual description about
  consumer perceptions of a product on two or more
  dimensions in relation to competitors.

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Select Positioning Strategy
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Select Positioning Strategy
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Select Positioning Strategy

• The positioning strategy must determine where a
  company wants to go
• And how to get there by positioning the product
  according to any of the following ways
• Price/Quality
• Product Attributes
• Product User
• Product Usage
• Product Class
• Competition
• Symbol

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Marketing Mix
Identify Total Market
Segmentation
Bases for Segmentation
Select Target Segment
Positioning Strategy
Marketing Mix
Monitor, Evaluate and Control
Objective 3
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Marketing Mix

• The final steps are to develop and a marketing
  mix matched to the needs of the target market
• This must support the chosen positional strategy
  in the selected target markets
• Therefore determine the 4Ps or 7Ps of its
  marketing mix as a tool to achieve the desired
  position

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Recognize 4Ps and the 7Ps

• Product?customer value
• Price?cost
• Place?convenience
• Promotion?communication
• People?consideration
• Processes?co-ordination
• Physical evidence?confirmation

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Marketing Strategy and the Marketing Mix
Marketing Mix
Objective 4
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Marketing Strategy and the Marketing Mix

• Refers to goods, services, people, places and
  ideas
• Household consumers
• Business-to-business customers

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Marketing Strategy and the Marketing Mix

• Marketing channel is the network of organizations
  that create time, place and ownership utilities
  for household consumers and business customers.

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Marketing Strategy and the Marketing Mix

• Integrated Marketing Communication (IMC)
• System of management and integration of marketing
  communication elements
• Advertising, publicity, sales promotion, personal
  selling, sponsorship marketing, and
  point-of-purchase communications

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Marketing Strategy and the Marketing Mix

• Pricing decisions are complex and are driven by a
  variety of considerations including
• Customer demand, costs, information availability,
  competition, profit motives, product
  considerations, and legal considerations