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Chapter 5: Segmentation, Targeting and Positioning - Coggle Diagram
Chapter 5: Segmentation, Targeting and Positioning
Segmentation
Step 1: Establishing Strategies or Objectives
Conditions of strategies or objectives
derived form mission and current situation
Purpose
focus towards opportunities that grow out of what the firm is doing well
consistent with SWOT
News Article 4: Conducting a Customer Segmentation Survey
Examine Existing Data (Sullivan, 2019)
Data Sources
Website traffic/ e-commerce analytics (Sullivan, 2019)
gathers
behavioural information
refers to
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transactional data
includes
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Social Media (Sullivan, 2019)
shows
quantitative data
qualitative data
insightful intel and ethnographic behaviour
based on
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Email marketing (Sullivan, 2019)
which shows
product preferences
buying behaviour
SEM/online ad & re-targeting or any form of paid media campaign data (Sullivan, 2019)
includes
what messages and channels best resonate with customers
what drives customers to take action
Customer satisfaction surveys, customer service reports (Sullivan, 2019)
help understand
what brand is doing right
where can the brand improve
customers' pain points and concerns
allows
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Conduct Informal, 3rd Party Research (Sullivan, 2019)
gives
context
direction
informed point of view
Step 2: Segmentation Methods
Definition
using a particular method or combination of methods to segment the market
Reasons for Segmentation
products exist in multiple segments
different motives
Types of Segmentation
Geographic Segmentation
refers to
different needs and wants in different geographical areas
Examples
eg. Roxy will move more swimwear to sunny vacation spots
eg. North Face can expect to sell more parkas to more people who live in winter climates
organising customers into groups based on where they live
due to
Most useful when
products satisfy needs that vary by region
Groups of Market
country
region
areas within region
state, city, neighbourhoods, zip codes
Demographic Segmentation
What is it?
grouping consumers according to easily measured, objective characteristics
characteristics
income
education
age
generation cohorts
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gender
most common way to define segments
why
easy to identify and reach
Psychographics Segmentation
Segmentation Factors
Behaviour
refers to
how consumer occupy their time
Psychological Reasons
that helps to
determine choices
Ways market is segmented
personality
social class
lifestyle
refers to
person's pattern of interests, opinions and activities
Indicates
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attitudes
opinions
is the
Richest picture of a consumer segment
that helps marketers
know the real person making the consumption decisions
Benefit Segmentation
refers to
grouping consumers on the basis of benefits they derive fro products or services
Example
Toothpaste
Benefits
antimicrobial
tartar control
whitening properties
sensitive teeth
Behavioural Segmentation
Component
Loyalty
News Article 1: Lesser Customer Loyalty
in recent times
Lesser Customer Loyalty to a Brand
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Main Reasons for switching Brand
best value for money
convenience
Example
Eg. Apple devotees are granite-like in their devotion towards the brand
Reasons For Segmentation
Moving away from mass marketing
Toward target marketing
Target marketing components
selecting one or more market segments
developing products and marketing programs tailored to each segment
identifying market segments
Target
Step 3: Evaluate Segment Attractiveness
Factors
Substantial
scenarios
market too small or buying power is insignificant
outcome
will not generate sufficient profits
unable to support the marketing mix activities
market too big
outcome
might need its own store
refers to
Buying Power of Market
Size of Market
Reachable
refers to
Market Accessibility
which includes
product distribution
persuasive communications
when consumers are able to
know the product or service exists
understand its benefits of use
recognise how to buy it
Identifiable
refers to
identifying who is in the market
so that
firms can design products or services to meet consumers' needs
is important for
Distinction of Segments
does not work when
Segments Overlap
Profitable
refers to
how good the investment in products is
regardless of
attractiveness of segment
Key Factors
Market Growth
Refers to
current size
expected growth rate
Market Competitiveness
is made up of
barriers to entry
product substitutes
number of competitors
Market Access
is made up of
ease of developing
accessing distribution channels
brand familiarity
Responsive
Reaction of customers to competitors
Good
Firm's reaction
Firm should provide it
Bad
Firm's Reaction
Firm should not provide it
refers to
how customers respond to products
Step 4: Select a Target Market
Key factor
Marketers ability to pursue an opportunity or target segment
determined by
Company's competencies
Attractiveness of target markets
Types of Target Market
Undifferentiated/Mass Marketing
refers to
when everyone is considered a potential user of its product
consists of
identical products
that can be
easily substituted by a product from any other brand
competing based on
price
availability
appropriate for products which
customer needs and wants are similar across all groups
single marketing mix can be designed for all customers
Differentiated
used to
target several market segments
refers to
increasing emphasis on two or more tiers of products
by
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offer different products for each segment
help companies to
obtain bigger market share
which leads to
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increase the market for their products
Concentrated
refers to
selecting a single, primary target market
so that
company can focus all its energies to provide a product that fits the market's needs
Example
News Article 2: Examples of Niche Marketing
Under Armour (Eisenburg, 2019)
target market
athletes
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Lefty's San Francisco (Eisenburg, 2019)
target market
left-handed people
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also known as
Niche Marketing
Micromarketing/One-to-one/Customisation
refers to
extreme form of segmentation
due to
tailoring of products or services to suit an individual customer's needs or wants
manufacturing when there is an order from a customer
Positioning
Step 5: Identify and Develop a Positioning Strategy
consists of
Market Positioning
refers to
defining marketing mix variables
so that
customers have a clear, distinctive understanding of what a product does
Value Proposition
communicates
customer benefits to received from a product or service
represented by
firm's competitive edge
best when
company's offering overlaps with customer wants and needs
company's offering do not overlap with competitor's offering
requires
Clear Communication (SMU, 2019)
involves
understanding what customers really value (SMU, 2019)
so as to
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how this differs for different major customer segments (SMU, 2019)
developing an appropriate value offering for customers (SMU, 2019)
Formable and Actionable Plans (SMU, 2019)
refers to
good understanding (SMU, 2019)
in the use of
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good implementation (SMU, 2019)
in order to have
Resonating Focus (SMU, 2019)
Common Mistakes
unidirectional value propositions (SMU, 2019)
insufficient understanding and engaging customers in what they value (SMU, 2019)
focuses on
key benefits
to show
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can be developed at
firm level (SMU, 2019)
provides employees with
internal guidance (SMU, 2019)
strategic direction (SMU, 2019)
market segment level (SMU, 2019)
individual customer level (SMU, 2019)
News Article 3: Useful tips on Value Proposition
Positioning Methods
focuses on
how the product or service affects the consumer
how the product or service is better than competitors'
objective
play up how the brand provides desired benefits compared to competitors
according to
value
salient attributes
symbols
against the competition
using
Perceptual Map
displays
two or more dimensions
position of products or brands in consumers' mind
plotting steps
Determine consumers' perceptions and evaluations in relation to competitors'
through
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so that
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