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Week 6: Segmentation Targeting and Positioning (Effective Segments…
Week 6: Segmentation Targeting and Positioning
Market segmentation
The process by which a market is divided into distinct customer subsets of people with similar needs and characteristics
Lead them to respond in similar ways to a particular product offering
Approaches to Marketing
Mass Marketing
One marketing approach for all customers
One-to-one marketing
Customised approach for each customer
Effective Segments
Adequate size
Measurability
Accessibility
Responsiveness
Compatibility
Steps in Market Segmentation
Defining the Market
Not too narrow
Define through meaningful characteristics
Levitt, 1960
Identifying competitive advantage
Product differentiation
Performance
Services differentiation
Delivery
Personnel differentiation
Employees
Image differentiation
Company brand
The Marketing Mix
Controllable variables the company puts together to satisfy target markets and achieve the firm's objectives
Product
Price
Place
Promotion
Extended
Physical evidence
Environment where the service is assembled
Participants (people)
Process
Procedure
Segmenting Consumer Markets
Segmentation Variables
Socio/Demographic
Age, gender, education, culture
Geo-demographic
Geography and demography
Psychographic Variables
Relate to a customer's predisposition to behave a certain way
Values and personality
Lifestyles (Plummer, 1974)
Activities
Interests
Opinions
Behavioural variables
Purchase occasion, user status, usage rate, user loyalty, attitude
Benefit segmentation
Casual factors rather than descriptive factors
Benefits sought by consumer determine their behaviour much more accurately than to demographic characteristics
Named to best represent needs/profile
Are profiled around key bases employed above
Bases for segmenting business markets
Industry
e.g mining
Organisational characteristics
e.g size
Product application
e.g raw materials
Situational factors
e.g urgency
Individual variables
e.g Personal characteristics
3.Targeting
Selecting part of the segments
Evaluating market segments
Most attractive segments in organisation
Factors to consider
Segment size and growth
Sales, growth rates, profits
Segment structural attractiveness
Competitors, substitutes, power of buyers
Company objectives and resources
Objectives, resources, strengths, skills
Market Coverage strategies
Differentiated Marketing
Company marketing mix 1,2,3
Segment 1,2,3
Undifferentiated marketing
Company marketing mix
Market
Concentrated marketing
Company marketing mix
Segment 1,2,3
4.Positioning
Directing marketing activities towards the target
Process of positioning
Determine the position of the brand
Determine the ideal point
Decide whether to reposition
Change existing perceptions, attitudes and beliefs
Develop positioning strategy
a clear and precise expression of how the brand is to be communicated to the mark