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Chapter 5 Identifying market segments and targets+Positioning - Coggle…
Chapter 5 Identifying market segments and targets+Positioning
STP(segmentation.targeting.position)--linking Strategy with Tactics
Market Segmentation
Market segmentation
requires dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.
Groups
of customers with
similar needs
or
wants
and
priorities
and who because of this seek
same benefits
and attach
same importance
to their satisfaction.
Segmentation ~ it’s so simple
Divide the market into groups
Whose members are as similar as possible to each other
That are as different as possible from other groups
Measurability
: The degree to which the size, purchasing power and profiles of a market segment can be measured.
Accessibility
: The degree to which a market segment can be reached and served.
Substantiality
: The degree to which a market segment is sufficiently large and profitable.
Differentiability
: The degree to which a market segment is conceptually distinguishable and responds differently to a different marketing mix.
Actionability
: The degree to which effective programs can be designed for attracting and serving a given market segment.
Bases for Segmenting Consumer Markets
Major segmentation variables
Geographic segmentation
consumer: region, climate
business: region, market, HQ, branch
Geographical units
:Nations, states, regions, counties, cities, or
neighborhoods
Geoclustring
:Which neighborhoods or postcodes contain our most valuable customers? How deeply have we already penetrated these segments? Which distribution channels and promotional media work best in reaching our target clusters in each area?
Psychographic segmentation
consumer: social class, lifestyle(VALS)
business: corporate culture, power structure
Buyers are divided into groups on the basis of their
values, attitudes, and lifestyle
Demographic segmentation
consumer: age, cender, income, family size/stage, education
business: industry, assets, sales, of employees, age
Demographic segmentation
divides the market into segments based on variables such as age, life- cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.
They are the most popular bases for segmenting customer groups
Even when marketers first define segments using other bases, such as benefits sought or behavior, they must know a segment’s demographic characteristics to assess the size of the target market and reach it efficiently.
Behavioral segmentation
consumer: benefits, usage occasion, usage rate, brand lotalty
business: applications, order urgency, order size, existing relationships
Marketers divide buyers into groups on the basis of their
knowledge of, attitude toward, use of, or response to a product
Principles of market segmentation
who buys/ customer&consumer
characteristics
soft/psychographics
value
attitudes
lifestyle
hard/socio-economic&demographic+geography
what is bought and why/customer&consumer
behaviour
subjective
benefits
perceptions
preference trade-offs
objective
usage
price sensitivity
promotional response
loyalty/repeat purchase
Using Multiple Segmentation Bases
Multiple segmentation
is used to identify smaller,
better-defined target groups.
VALS
is a psychometric method that measures predictive attitudes—in conjunction with behaviors and demographics—for developing countrywide typologies that persist through decades.
Customer segments
: Danger of describing........and not understanding customers
Benefit Segmentation
Benefits sought represent consumer needs
People buy a product to satisfy a particular need
Needs differ across consumers
People assign different weights to
different needs
Important for positioning
STP
Segmentation
:Identify variables that allow the market to be
segmented
Targeting
:Evaluate the attractiveness of each segment and
choose a target segment
Positioning
:Identify positioning concepts for each target segment,select the best, communicate.
Market Targeting
Factors for Selecting Target Segments
Structural attractiveness:
Size
Growth rate
Profitability
Nature of competition
Bargaining power of buyers
Reputation
Fit with company objectives and resources:
Strategic fit with long-term objectives
Core competencies and capabilities
Desired relationship with customer
The Multiple Criteria Matrix
row: Structural attractiveness
clomn: company objectives and resources
high/medium/low
Selecting Target Market Segments
Market-Targeting Strategies
targeting broadly
undifferentiated(mass) marketing
Undifferentiated marketing targets the whole market with one offer.
Mass marketing
Focuses on common needs rather than what’s different
differentiated(segmented) marketing
Differentiated marketing targets several different market segments and designs separate offers for each.
Goal is to achieve higher sales and stronger position
More expensive than undifferentiated marketing
concentrated(niche) marketing
Concentrated marketing targets a large share of a smaller market.
Limited company resources
Knowledge of the market
More effective and efficient
micromarketing(local or individual marketing)
Micromarketing
is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
targeting narrowly
Market Position
Developing a Brand Positioning
The act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market
Positioning Statement Format
convince:customer segment
That:the value we offer
Because:differential benefit
frame of reference
Defines which other brands a brand competes with and which should thus be the focus of competitive analysis
Identifying and analyzing competitors
points of difference
Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
points of parity
Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands
Market targeting
Steps in the Segmentation Process
1,
Needs-Based Segmentation
----Group customers into segments based on similar needs and benefits sought by customer in solving a particular consumption problem
2,
Segment Identification
----for each needs-based segment, determine which demographics, lifestyle, and usage behaviors make the segment distinct and identifiable(actionable)
3,
Segment Attractiveness
----using predetermined segment attractiveness criteria(such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment.
4,
Segment Profitability
----Determine segment profitability
5,
Segment Positioning
---For each segment, create a "value proposition" and product-price position strategy based on that segment's unique customer needs and characteristics
6,
Segment "Acid Test"
-----Create "segment storyboard" and test the attractiveness of each segment's positioning strategy.
7,
Marketing-Mix Strategy
----Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, and place.