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Segmentation (Targeting and positioning (Investigate segmentation bases…
Segmentation
Targeting and positioning
Process
Choose the segment group
Design a (or multiple) marketing mix(es) – product, price, distribution & promotion mix to differentiate
Group the customers based on similar characteristics – music, sport
Understand the individual customers (quantitative or qualitative research – find out their categories, and understand their experiences)
Investigate segmentation bases
Geographic
Demographic
Psychographic
Behavioural
Successful segmentation criteria
Measurability, accessibility, substantiality, differentiability, actionability (Kotler, P. 1991)
Geodemographics
Using population census data to classify consumers by location and demographic data
We live in a information rich society and statistics are collected on many different things. Acorn tries to bring all the relevant statistics together to provide a complete picture.
Attractiveness factors
Competitive intensity within the segment
PEST trends
Segment profitablility
Each of these attractiveness factors is rated on a scale of 0-10 and loosely categorised as high, medium or low in attractiveness VS Capability of the company
Market growth
Select segments to target
Differentiated marketing
multi-segmented -Targeting 2 or more segments by offering a differentiated marketing mix for each
Undifferentiated marketing
Develop a single marketing mix for all segments. – ignore that there are segments! A scattergun approach. Firm is offering a basic product that would be used by almost all age groups and lifestyles . E.g. Petrol is largely undifferentiated. Traditionally milk and white bread and soft drinks. But nowadays there are many segments for these product categories.
Concentrated/ focused marketing
Single segment -be the very best in a single tiny segment. Also referred to as niche marketing – meeting an unmet need.
Works if you have a big market – universal appeal, many direct competitors and the profit margin is small.
If resources are limited the company will tend to adopt a concentrated marketing approach. A higher level of resourcing coupled with a range of segments to approach will lead to a differentiated approach . A simple ‘made-for-everybody’ type product will lead to an undifferentiated approach.
Positioning
Marketers plan positions that help give their products the greatest advantage in selected markets ; to gain more knowledge and then adjust their product accordingly to meet information gained.
Fundamental elements
Physical attributes
the functionality and capability that a brand offers.
Communication
the way in which a brand is communicated and how consumers perceive the brand relative to other competing brands in the market place.
Re positioning strategies
Product re-positioning: Change the tangible attributes and then communicate the new proposition to the same target market
Intangible re-positioning: Same product but different target market
Image Re-positioning: keep the product and target market but change the image
Tangible re-positioning Change both the product (attributes) and the target market
What is market segmentation
This is the starting point for marketing: (and it relates to anything we can market, products, service i.e. travel, social behaviour i.e. recycling)
Markets are assumed to be heterogeneous. Market segmentation is means of viewing a heterogeneous market as several smaller homogeneous markets
Product segmentation
Make new products, adapt products (an idea in the lab, a reaction to competitor), and find a segment for these products (high chance of failure because the needs of customers are not taking into considerations)
Market segmentation
Identify different types of consumers: identify their needs. Identify an unmet need and than consider a product offering that adds value.
Advantages
Cost-efficient marketing strategies
Customer retention
Can address the diversity that exists in a population
Enables a business to identify key competitors
Provides a systematic approach to market coverage - market opportunities will not be missed