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Market Segmentation, Targeting & Positioning - Coggle Diagram
Market Segmentation, Targeting & Positioning
segmentation methods
(under step 2 of the segmentation, targeting & positioning process)
geographic
definition
Market could be grouped by
country
region
areas within region
state, city, neighbourhoods, zip codes
most useful for companies whose products satisfy needs that vary by region
there are different consumer needs and wants in different geographical areas
demographic
definition
groups consumers according to easily measured, objective characteristics (e.g. age, gender, income)
most common segmentation strategy
easy to reach & identify
these variables represent the most common means to define segments because they are easy to identify, and demographically segmented markets are easy to reach.
psychographic
definition
based on personality, social class, lifestyle, attitudes and opinions
allows people to describe themselves using characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine these choices
particularly useful as a segmentation variable in categories where the user's self-image is important (e.g. body wash or fragrance)
a person's pattern of interests, opinions and activities combine to represent his or her lifestyle
knowledge of lifestyle can provide a very meaningful picture of a person. It can indicate a person's interests and also include info concerning attitudes and personality traits
benefit
definition
groups consumers on the basis of the benefits they derive from products or services
marketing is all about satisfying consumers’ needs and wants, dividing the market into segments whose needs and wants are best satisfied by the product benefits can be a very powerful tool
behavioural
definition
divides customers into groups based on how they use the product or service.
occasion segmentation: based on when a product or service is purchased or consumed (e.g. clothing, snack foods)
loyalty segmentation: divided into groups according to their degree of loyalty (e.g. hotels, airlines, restaurants)
links
Facebook Cautions Against the Pitfalls of Too Much Personalization in New Report - Social Media Today
Behavioural segmentation in digital advertising - Marketing Interactive
segmentation, targeting, positioning process
steps
step 1: establish strategy or objectives
(segmentation)
step 2: use segmentation methods
(segmentation)
step 3: evaluate segment attractiveness
(targeting)
step 4: select the target market
(targeting)
step 5: identify and develop a positioning strategy (positioning)
key factor likely to affect this decision is the marketer’s ability to pursue such an opportunity or target segment
in general, a company matches their competencies with the attractiveness of target markets
for segmentation to be successful, marketers first must determine whether the segment is worth pursuing, using several descriptive criteria i.e. to consider if the segment identifiable, substantial, reachable, responsive, and profitable.
use a particular method or combination of methods to segment the market
companies do not use only one method to segment their market
products exist in multiple segments, just as consumers do
diff motives will lead diff consumers to purchase the same product
firms often employ a combination of segmentation methods (most effective)
using demographics and geography to identify and target marketing communications to their customers
using benefits or lifestyles to design the product or service and the substance of the marketing message
includes
articulating the vision or objectives of the company’s marketing strategy clearly
overall strategy / objectives must be:
consistent with the firm’s mission statement (derived from mission and current situation
be based on the current assessments from SWOT analyses.
when a firm's segmentation, targeting and positioning strategy is consistent with and derived from its mission and objectives, it focuses the firm toward opportunities that grow out of what the firm is doing well and not in a random, spurious direction
link
The segmentation, targeting and positioning model - Smart Insights
criterias to evaluate segment attractiveness
(under step 3 of the segmentation, targeting & positioning process)
indentifiable
things to consider
who is within their market to be able to design products or services to meet their needs
if the segments are unique
(too much overlap between segments means that distinct marketing strategies aren’t necessary to meet segment members’ needs)
does each segment require a unique marketing mix
substantial
things to consider
too small or insignificant (buying power)
too big and it might need its own store
reachable
things to consider
know the product exists
understand what it can do
recognize how to buy
products and services cannot have any impact, no matter how identifiable or substantial the target market is, if that market cannot be reached (or accessed) through persuasive communications and product distribution
the consumer must know that the product or service exists, understand what it can do for him or her, and recognize how to buy it
responsive
things to consider
react positively to firm's offering
react similarly to firm's offering
if firm cannot provide products / services to segment, it should not be targeted (through the firm’s distinctive competencies)
profitable
things to consider
market growth (current size and expected growth rate)
market competitiveness (number of competitors, barriers to entry, product substitutes)
market access (ease of developing or accessing distribution channels and brand familiarity)
an attractive segment today may not last long enough to make it worth the investment
many firms are investigating when & how much to invest in the Millennial/GenY generational cohort for profitability both, current and future times
link
Streaming Now Accounts for 19% of TV View Time, According to New Report - Social Media Today
targeting strategies
(under step 4 of the segmentation, targeting & positioning process)
undifferentiated/mass marketing
definition
identical products (e.g. flour, rice, salt) that can be substitutable by products from any other suppliers; when everyone might be considered a potential user of its product
undifferentiated products compete on the basis of price and availability, however, even commodity goods like flour, rice, salt, sugar have brand names on their packaging
appropriate for products for which almost anyone can be a target customer, and where customer needs and wants are similar across all groups. In this strategy, a single marketing mix is designed for all customers
differentiated
used when
to target several market segments with a diff offering for each to help them obtain a bigger share of the market and increase the market for their products overall
targeting several market segments help diversify business and lower company’s overall risk.
marketing experts increasingly emphasise on two or more-tiers of products.
many firms are now offering diff variations of the same basic product or service to high-end and low-end segments
example
Gap Inc.'s Banana Republic chain sells basic blue jeans for US$58, whereas its Old Navy stores sell a slightly different version for only US$22
Kellogg's different types of cereals, each targeted at a different type of user. Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturer's sales revenues and profits, doesn't reduce quality or increase the price and serves customers' needs better
concentrated
definition
an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs
example
organic grocer (brand - SuperNature)
micromarketing / one-to-one / customization
definition
When a firm tailors a product or service to suit an individual customer’s wants or needs and the company only manufactures the product when there is an order from a customer
example
Nike By You
link
Targeting Strategies and the Marketing Mix - Lumen
positioning strategy
market positioning
definition
defining marketing mix variables so target customers have a clear, distinctive understanding of what product does
value proposition
definition
communicates the customer benefits to be received from a product or service; represented by the benefits that a firm provides but that its competitors do not
the Circles for a Successful Value Proposition framework:
the bottom left circle represents the customer needs and wants
the bottom right circle represents the company’s offerings (i.e., its capabilities)
the top circle represents the benefits offered by competitors
the shaded portion reflects the value proposition, or the intersection of what the customer needs and wants with what the company can offer.
the best situation is if a company’s product or service offering overlaps with customer needs and wants but suffers no overlap with competitors’ offerings
link
How To Craft A Truly Differentiated Value Proposition - Full Surge
positioning methods
positioning strategies generally focus on either how the product or service affects the consumer / how it is better than competitors’ products and services
when positioning against competitors, the objective is to play up how the brand being marketed provides the desired benefits better than those of competitors
methods
salient attributes
symbol
competition
value
perceptual map
definition
displays, in 2 / more dimensions, the position of products or brands in the consumer’s mind.
process of positioning using perceptual mapping
determine consumers’ perceptions & evaluations in relation to competitors’ (marketers' brand’s position)
by asking a series of questions about their firm’s and the competitors’ products
select 2 dimensions to depict
identify the market’s ideal points and size
on a perceptual map, marketers can represent the size of current and potential markets
a larger circle can be used to represent a larger target market size
identify competitors positions
when the firm understands how its customers view its brand relative to competitors’, it must study how those same competitors position themselves
determine consumer preferences
when the firm understands how its customers view its brand relative to competitors’, it must study how those same competitors position themselves.
select the position
after determining consumer preferences, the company can select its preferring position and monitor the positioning strategy
monitor the positioning strategy
after determining consumer preferences, the company can select its preferring position and monitor the positioning strategy
