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MKT - CH6 - Segmentation, Targeting, and Positioning - Coggle Diagram
MKT - CH6 - Segmentation, Targeting, and Positioning
analyze the market to determine the different types of products people want and then make several varieties to cater to the wants of specific groups
marketers must position their products in the minds of the consumer, so that consumers understand why a particular product meets their needs better than competitive alternatives
Once the target market is identified, the marketer must convince the members of the target market that the choice must be their product
it achieves this task by defining the marketing mix variables so that the target customer has a clear, distinctive, desirable understanding of what the product or services do or represent, to competing products
The Segmentation, Targeting, Positioning Process (STP)
Step 1, establish overall Strategy or Objectives
articulate the mission and objectives of the company clearly
segmentation strategy must be consistent with the mission and objectives
segmentation strategy must be consistent with the current situation
Step 2, Segmentation Bases
formal approach to segment the market, describe different segments, needs, wants, and characteristics, which helps firms better understand the profile of the customers in each segment.
Geographic Segmentation
, organizes customers into groups on the basis of where they live, country, region, areas, climate, topography, etc.
geo segmentation is most useful for companies whose products satisfy needs that vary by region
population and the number of companies in a geographic area can also be used to define target markets
you can serve the entire market, but its better to make adjustments to meet the needs of smaller geo groups
Demographic Segmentation,
groups consumers according to easily measured, objective characteristics, such as gender, income, education
age, gender, income, education, race, occupation, religion, marital status, family size, family life cycle, and home ownership
demographically segmented marktes are easy to reach
generational cohorts are commonly used by marketers too
Asian Canadian growth has led to companies developing a marketing mix and strategy to target these groups
Demographics
might not
be useful for defining the target segments for other companies, demographics are poor predictors of activewear.
depending on the nature of the product and market, marketers may find it more advantageous to combine demographic segmentation with other segmentation bases to reach a better understanding-of their potential customers.
Psychographic Segmentation
, how consumer describe themselves; allows people to describe themselves by using those characteristics that help them choose how they occupy their time (behaviour) and what underlying psychological reasons determine those choices
Self-values
, goals for life (not short term goals), overriding desires that drive how a person lives his or her life.
self-respect
self-fulfillment
sense of belonging
for marketers, this means the benefits the target market may be looking for from a product
this motivation causes people to develop self images of how they want to be and then determine a way of life that will help them arrive at these ultimate goals
Self-concept
, the image a person has of himself; a component of psychographics
a person who has a goal to belong may see, or want to see, himself or herself as a fun-loving, gregarious type whom people which to be around
Marketers use this image through communications that show their products being used by groups of laughing people who are having a good time
Lifestyles
, the ways we live
if values provide an end goal and self-concept is the way one sees oneself in the context of that goal, lifestyles are how we live our lives to achieve goals.
someone with a strong sense of belonging will probably live in a well populated area that allows for many activities, probably will join clubs or partake in activities that attract like minded people.
VALS
, a psychographic tool developed by SBI, which classifies consumers into eight segments
Innovators
• Purchases reflect cultivated taste for finer things
• Very active consumers
• Established and emerging business leaders
• Change leaders
• High self-esteem
• Successful, sophisticated, take-charge people
Thinkers
• Mature, satisfied, comfortable
• Value responsibility
• Well-educated, knowledge seekers
• Respect for authority
• Conservative, practical consumers
• Like durability and clear value
believers
• Conservative conventionalists
• Concrete beliefs around family, religion, community
• Deep-rooted moral codes
• Established routines
• Predictable, loyal consumers
• Choose familiar products and established brands
achievers
Goal-oriented lifestyles
• Deep commitment to career and family
• Respect for authority
• Value stability,self-discovery
• Active consumers
• Favor prestige products that demonstrate their success, time saving products
Strivers
• Trendy and fun-loving
• Money defines success
• Favour stylish products
• Active yet impulsive consumers
• Shopping is a social activity and a display of status
• Spend as much as they can
experiencers
• Seek variety and excitement
• Active in sports and social activities
• Enthusiastic, impulsive consumers
• Spend high proportion of income on fashion and entretainment
• Want to look good and have cool stuff
Makers
• Practical people with constructive skills
• Value self-sufficiency
• Traditional views of family and work
• Suspicious of new ideas
• Unimpressed by material possessions
• Prefer value over luxury
Survivors
• Believe the world is changing too quickly
• Comfortable with familiarity
• Concerned with safety and security
• Always focused on meeting needs not fulfilling wants
• Cautious consumers
• Loyal to favourite brands
• Love a good deal
its used to understand the underlying motivators of people to further tailor communication to the particular group
Psychographic segmentation is normally used in conjunction with other segmentation approaches
Behavioral segmentation
, groups consumers on the basis of the benefits they derive from products or services, their usage rates of products , their loyalty and occasion, etc.
occasion segmentation**
, grouping consumers based on when a product or service is purchased or consumed
e.g. men need a suit for everyday work, but other suites are for special occasions, like a wedding
benefit segmentation,
groups consumers based on the benefits they derive from products or services.
dividing the market into segments according to which consumer's needs and wants your offerings can best satisfy makes a lot of damn sense.
Loyalty segmentation,
strategy of investing in retention and loyalty initiatives to retain the firm's most profitable customers
usage rate can also be used as a segmentation variable, e.g. fast-food restaurants often use promotional coupons to target occasional visitors to their restaurant or to entice people who have never visited their restaurants to come in and try their food and services
Multiple segmentation bases
segmenting by demographiocs and geography is easy because information about who the customers area and where they are located is realdily available
but characteristics only don't help marketers to determine their customer needs.
geodemographic segmentation
, grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics
useful for retailers because customers typically patronize stores close to their neighbourhoods.
Step 3. Evaluate segment attractiveness
Identifiable
, customers need to be segmented in a way that they are distinct from one another because too much overlap between segments means that distinct marketing strategies aren't necessary to meet segment members' needs
Reachable
, the best product or service cannot have any impact if that market cannot be reached (or accessed) through persuasive communications and product distribution. Consumers must know the product or service exists, understand what it can do for them, and recognize how to buy it
Responsive,
for segmentation straregy to be successful, consumers in the segment must react similarly and positively to the firm's offering.
if the firm cannot provide distinctive competencies, it should not target the specific segment.
Substantial and Profitable
, the size and growth potential of the segment must be attractive to generate enough sales, if market is too small or its buying power insignificant, it own't generate sufficient profits or be able to support the marketing mix activities.
Step 4, select target market
undifferentiated targeting strategy, or mass marketing
, a strategy firms can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups
this is common for smaller firms which consumers do not perceive distinguishable differences in the product, such as a neighborhood bakery
can be very effective for salt, sugar, etc, but even they are looking at ways to differentiate themselves
today's marketplace is more complex, this segmentation is preferred
differentiated targeting strategy,
target several market segments with a different offering for each
helps firms obtain a bigger share of the market and increase the market for their products overall
differentiated strategies can be expensive
Concentrated (niche) targeting strategy
, selecting a single primary target market and focusing all energies on providing a product to fit that market's needs
entrepreneurial startup usually benefits from this due to cost efficiencies
Micromarketing or one-to-one marketing
, tailoring a product or service to suit an individual customer's wants or needs
small producers and service providers generally can tailor their offering to individual customers more easily
mass customization
, interacting on a one-to-one basis with many people to create custom-made products or services; providing one-to-one marketing to the masses
The internet helps with this a lot, users can select insurance tailored to their needs
Step 5 Identify and develop positioning strategy
positioning
, the mental picture that people have about a company and its products or services relative to competitors
positioning statement,
expresses how a company wants to be perceived by consumers
Target market
offering name or brand
product/service category or concept
unique point of difference/benefits
Positioning methods
, firms position their products and services based on different methods
Value,
popular positioning method because the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision
Product attributes
, a common positioning strategy focuses on the attributes that are most important to the target market.
Benefits and symbolism
, emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers
Competition,
position their products or services head-to-head against a specific competitor or an entire product/service classification on similar attributes within the target marketing.
Market leadership
, companies might emphasize their leadership position
Positioning by using perceptual mapping
Perceptual map
, displays in two or more dimensions, the position of products or b rands in the consumer's mind
ideal point,
the position at which a particular market segment's ideal product would lie on a perceptual map
determine consumers perceptions and evaluations of the firms product or service in relation to competitors
identify the market's ideal points and size
identify competitors positions
determine consumer preference
select the position
monitor the positioning strategy
Repositioning
, because markets change, marketers reevaluate their position to determine where to reposition their products
rebranding,
changing the brand's focus to target new markets or realign the brand's core emphasis with changing market preferences