Marketing management module 3 segmentation, targeting, positioning

Consumer Behavior, Segmentation, Targeting, Positioning

• Consumer behavior – cultural, personal, psychological factors Buying motives- Meaning, Factors influencing buying behavior -Stages in buying decision process, Consumerism, Consumer Protection Act, 1986-An introduction

• Institutional marketing - Organizational buying Vs House hold buying.

• Segmentation: Meaning, Need, Factors influencing segmentation, Market Aggregation, Basis for segmentation – geographic, demographic, psychographic, behavioral, volume and benefit buying process., Segmentation of Consumer/ Industrial markets.

• Targeting: Basis for identifying target customers, Target Market Strategies,

• Market positioning : Meaning, Product differentiation strategies, Errors in positioning.

Totality of consumer’s decisions with respect to the acquisition, consumption and disposition of goods, services, activities and ideas by human decision making units over time.

Factors affecting consumer purchasing behaviors

• Cultural Factors– Subculture

• Social Factors– Reference groups

• Membership group

• Primary group

• Secondary groups

• Opinion leader

• Family

• Roles and status

• Personal factors– Age and stage in the life cycle

– Occupation and economic circumstances

– Personality and self-concept

– Lifestyle and values

Consumer Decision-Making Process

Problem

Recognition

Information

Search

Evaluation

of

AlternativesPurchase

Decision

Postpurchase

Evaluation

Business-to-Business Buying Process

• Identification of a need

• Establishment of specifications.

• Identification of alternatives.

• Identification of vendors.

• Evaluation of vendors.

• Selection of vendors.

• Negotiate purchase terms.

Consumerism is a social and economic order that is based on the systematic creation and fostering of a desire to purchase commodity goods in ever greater amounts.

• Right to consumer education.

• Right to due attention at appropriate forums.

• Right to assess to variety and at competitive prices.

• Protection against hazardous goods.

• Right to information.

Institutional Market a market consisting of schools, universities, hospitals, charities, clubs and similar organisations which buy goods and services for use in the production of their own goods and services.

• Organizational consumers purchase for:

• further production,

• usage in operating the organization, and/or

• resale to other consumers

• Final (or ultimate) consumers purchase for:

• personal,

• family, or

• household use

Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

1. Identify

segmentation

variables and

segment the

market

2. Develop

profiles of

resulting

segments

MarketSegmentation

3. Evaluate

attractiveness

of each

segment

4. Select the

target

segment(s)

MarketTargeting

5. Identifypossible

positioningconcepts foreach target

segment

6. Select,develop, andcommunicate

the chosenpositioning

concept

MarketPositioning

SurveyMotivations

Attitudes

Behavior

AnalysisFactors

Clusters

Profiling

Reduction in expenses Improved cash flow Improved productivity Improved manufacturing quality Improved service delivery Improved employee working conditions/benefits Improvement in market share/competitive position Need for education Involvement with social trends Specific - relating to product/service characteristics

• Size

• Job position/responsibility

• Climate

• Time related factors

• Language

• Status in the industry

• Accessibility

• Future potential

• Ability to make a quick purchase decision

• Access (or lack of access) to competitive offerings

• Need for customization

• Product or service application to a business function

Well market aggregation a.k.a mass marketing or undifferentiated marketing, is simply marketing a product to the largest audience possible this leads to heavy exposure of the brand and product. This also leads to reduced cost in marketing the product.

Occasions, Benefits, Uses, or Attitudes

Behavioral

Geographic

Region, City or MetroSize, Density, Climate Demographic

Age, Gender, Family size and life cycle, Race, Occupation, or Income ...

Lifestyle or Personality

Psychographic

• 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

Measurable

Accessible

Substantial

Differential

• Segments must be large or profitable enough to serve.

• Segments can be effectively reached and served.

Actionable

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

• Segments must respond differently to different

marketing mix elements & actions.

• Must be able to attract and serve the segments.

The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond

• Who buys our product?

• Who does not buy it?

• What need or function does it serve?

• What are customers buying to satisfy the need for which our product is targeted?

• What price are they paying?

• When is the product purchased?

• Where is it purchased?

• Why is it purchased?

• One easy and free way to identify your targetedcustomers is to put up surveys on your website foryou visitors to take.

• Asking the right questions is important forunderstanding your visitors.

• Asking for age, budget, interests and location isextremely helpful.

• This allows you understand who is buying from you,how old they are, what their yearly budget is andtheir location.

• Identifying Competitors

• Advertising Avenues

• Marketing Campaign and Strategy

• Product Knowledge

• Industry Knowledge

• Overall

• The act of designing the company’s offering and image to occupy a distinctive place in the consumer’s mind.

• Positioning normally takes one position in the mind. More than one, the company runs the risk of customer credibility and dilution of positioning

• Attribute

• Benefit

• Use or application

• User

• Competitor

• Product category

• Price/quality

Most competitive advantages lasts only a short time. Companies therefore constantly need to think up new value adding features and benefits to win the attention and interest of choice rich, price proneconsumers.

It is the act of designing a set of meaningful differences to distinguish the company’s offering from competitors.

• Differentiation can be done in various ways depending on the industry and product category.

• Differentiation can occur in one or more of these areas – product, services, personnel, channel, image.

• Form

• Features

• Performance

• Conformance

• Quality

• Durability

• Reliability

• Repairability

• Style

• Design

• Ordering Ease

• Delivery

• Installation

• Customer Training

• Maintenance and repair

• Miscellaneous services

• Competence

• Courtesy

• Credibility

• Reliability

• Responsiveness

• Communication

• Trade

• Direct

• Identity – what the company wants to project

• Image – what the public perceive

• Image can be enhanced by using, symbols, media, atmosphere, events and employee behaviour