13249392 Ch Segmentation Targeting Positioning

8/9/2019 13249392 Ch Segmentation Targeting Positioning

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CONSUMER

SEGMENTATION

Ch # 7-Segmentation, Targeting & Positioning


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Market Segment

A subgroup within the market who share

certain relevant characteristics

A group of customers with certaincharacteristics in common & whose needs

can be met with a distinct marketing mix



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Market segmentation - Definitions

The analytical division of the market into

discrete groups of customers that share

common attributes. The identification of subsets of buyers

within a market who share similarities,

needs and who have similar buying

processes.



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3 basic questions

Who is buying?

What do they buy?

When do they buy?



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Steps to segmentation

MARKETSEGMENTATION

Identify bases for

segmenting the

market

TARGET

MARKETING

Develop measure

of segment

attractiveness

MARKETPOSITIONING

Develop positioning

for target segments



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Ways to segment

Geographic: by geographical area

Demographic: by population

characteristics Psychographic: classification on the basis

of psychological factors

Behavioral: classifying by purchasingbehavior



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Ways to segment

GeographicRegion

Urban/Sub urban

DemographicAge

Gender

Occupation

Socio-economic group

Psychographic

Life stylePersonality

Social status

Behavioral

Rate of usage

Benefits sought

Loyalty status

Readiness to purchase



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Choice of market segments

Unattractive

segment

Average

segment

Attractive

segment

Absence of

Competitive

advantage

Strongly

avoid

Avoid Possible

Avg. in

terms of

Competitive

advantage

Avoid Possible Secondary

target

Strong

Competitive

advantage

Possible Secondary

target

Prime target



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Firms engage in segmentation

to

Develop different strategies for different

parts of the market

Increase sales & profit from each segment Identify marketing opportunities

Dominate certain niche segments

Reflect differences in customer tastes Prioritize on those segments most likely to

provide a higher return


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Evaluation of segments

Evaluating market segments

segment size & growth

segments structural analysis

competition within the segment

existing or potential substitute products

relative power of buyers / suppliers

companys objectives & resources

environment, social responsibility, if it is core business,can employ skills & resources superior to those of

competition



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Segmentation strategies

Undifferentiated: Ignore

segments

Concentrated or focused:

Concentrate on a singlesegment (Small firms)

Differentiated: Different

marketing mix for eachsegment (Large firms)



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Segmentation strategies

MarketFirm

Segment A

Segment B

Segment C

Segment D

Segment A

Segment B

Segment C

Segment D

Firm

Firm

Undifferentiated

Marketing

DifferentiatedMarketing

Concentrated/Focused

Marketing



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Undifferentiated Strategy

Also known as market aggregation

Targets entire market with the samemarketing mix segments ignored

Used when segments cannot be identifiedor where aggregation proves moreprofitable than segmentation

Fords Model T car were sold as theuniversal car any car as long as it isblack



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Concentrated strategy

Marketing effort directed at a single highlydefined segment

Niche marketing Rolex watches

Used when one group is especiallyattractive for the organization to target

A useful strategy for smaller firms avoids

a head on collision with major players Provides scope for competitive advantage

in a small niche in the market



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Differentiation Strategy

Multi segment approach

Separate mix for each segment

Expensive In terms of product & marketingcost

Only possible for large firms



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Continuum of targeting strategies

Undifferentiated Single marketing mix for all

customers

Differentiated Different mix for each segment

Concentrated Targets single large segment

Niche Targets a single small segment

Customized Different mix for each customer



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POSITIONING



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Position in the market

The location of a product or service

alongside key competitors in the mind of

consumers

Refers to the place the product occupies in

the consumers perceptual map of the

market



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Position and Positioning

A products position ultimately depends onthe attitudes of people in the target market

Firms will seek to position their products to

increase sales Either marketers accept the customer

attitudes as they & tailor the product to fitthose attitudes OR seek to change those

attitudes Positioning indicates how a company

wishes to compete in the market place



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Positioning

Arranging for a brand or product to occupy

a clear and distinctive place in the minds

of the target customers relative to

competing products and brands



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The role of positioning

To strengthen the power of messages

directed at consumers

To target a particular segment R

STP To ensure that the product is differentiated

in the minds of the consumer

To decide on the ground on which tocompete

To analyze re-positioning possibilities



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Porters generic strategies

Cost leader: Compete by being the lowest

cost producer

Differentiation: Compete by offeringsomething different & superior

Focus: Become a niche player

concentrating on small part of the market



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Differentiation

The basic principle is that you must either:

- Differentiate your product

- Be a provider of generic products to be sold atthe lowest prices



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Perceptual map

The visual representation of a brand within

a specific market place showing its

position relative to competitors

Shows which and how products compete

in consumers mind and suggests how a

product can be positioned to maximize

sales



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A perceptual map for supermarkets

Full range

Limited range

Low price High price



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Position map & NPD

Two options for firms developing new

products:

- Develop a product to occupy identified gaps in

the market

OR

- Develop me-too products which copy

existing rival

A position map will assist decision making



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Other uses of Perceptual map

To analyze strengths and weaknesses

To reveal market segments

To develop new strategies To reposition the product

To decide on competitive position which

the product to be distinguished fromcompetitor offerings



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Approaches to Positioning

By attribute:

- Associating the brand with a desirable

attribute

- E.g. Volvo cars associated with safety &

durability

By price & quality:

- Price level should be right to reflect quality

- E.g. Rolls Royce High priced with quality



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Approaches to Positioning

With respect to application/use:

- Kit Kat is positioned to link in with tea or

coffee break Have a break Have a Kit

Kat

By product user:

- E.g Ufone - Everybody loves to Ufone



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Positioning strategies can be related

to

Product attributes

Benefits offered

Price

Quality

Application

User categories

Specific usagesituations



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Successful positioning strategy

requires Clarity

Consistency

Credibility Competitiveness



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Mistakes in Positioning

Under positioning: Consumershave limited perception of thebrand & are unaware of the

distinguishing features Over-positioning: Consumersbelieve that the brand in onlyactive in very focused markets

Confusion: Consumers areunclear how a brand iscomparable with other brands



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Re-positioning

Changing the position of the product in the

market

It becomes necessary sometimes:

- To extend the product lifecycle

- To move into a new market segment

- Because of changes in society & in socialattitudes

- The brand evolves with time



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Re-positioning

Image re-position: No change in the product.

Promotion is used to change the image of the

product.

Product re-positioning: Modification of theproduct

Intangible re-positioning: Targeting a different

market segment with the same product

Tangible repositioning: Change in both product

& target market



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Re-positioning Example

Johnson & Johnson Baby

shampoo:

Originally aimed at infants.

Re-positioned as a gentle,frequent use shampoo for

the adults as well as babies.



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13249392 Ch Segmentation Targeting Positioning

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