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CH6: Segmentation, Targeting, and Positioning - Coggle Diagram
CH6: Segmentation, Targeting, and Positioning
Segmentation, Targeting, & Positioning
Concepts work together to create & reinforce product's image to it's consumers & to market in general
Market Segmentation Analysis
Allows marketers to ID which segments could be focus, where gaps in market exist, where future opportunities may lie
Market Segmentation
Aggregating prospective buyers into groups that have common needs & respond similarly to marketing programs
Forms of Market Segmentation
Mass Marketing
Strategy when product with broad appeal is widely marketed to entire market with no product or marketing differentiation at all
Exists in limited capacity today cause of competitiveness of market & need for marketers to specifically address consumer needs with offerings
Segment Marketing
Marketing wide range of different products & brands to specifically meet needs of org's varied target markets
Each product caters to specific product needs of distinct target markets & has own marketing program to ensure each target groups' needs met properly (e.g. packages of products reflect different target market interests & needs)
B2B market, using variables like type of customer, size of customer, location of customer, type of buying situation, benefits sought
Niche Marketing
Company restricts efforts to marketing limited product line to narrow but profitable single segment of market that is of marginal interest to major competitors
Individualized Marketing
[One-to-one marketing with segments of one]
Customizing products to fit individual needs
Individualized segmentation - Product & service offering customized to meet individual needs (diff from indiv comm)
Individualized marketing communication - Through tech & data collection, messages & offers regularly customized for target audiences
Key to successful product differentiation & market segmentation strategies lies in finding ideal balance between satisfying customer's individual wants & doing this profitably
3 Facts concepts of market segmentation, target markets, & product positioning based on
Consumers have range of different needs & single product can't satisfy everyone
Orgs have limited money, so spend efficiently & effectively on most likely to convert
Marketers must have clear consumer insights on target markets in terms of product needs, price expectations, purchase habits, communication tools most used
2 main market segments
How product is classified depends on usage
Many products tailored for one market & not necessarily both
Consumer Market
Consists of goods, services, ideas that person can purchase or support for own personal use
Business Market
Products purchased to run business or used as component in another good/service
These groups relatively homogenous & consist of ppl who are fairly similar in consumption behaviour, attitudes, profiles
Product Differentiation
Position products apart from competition in eyes of consumers so appear distinct from competitive offerings
Doesn't mean product is better than competition
Target Market Profile & Personas
Segmentation Variables in Consumer Markets
4 variables
Target Market
Specific group/segment of existing & potential consumers marketers direct their marketing efforts
Target Market Profile
Crucial to success of all marketing initiatives as it drives decisions about product's marketing mix & product's positioning in market
Geographics
Where target market lives (country, region, province, city size, population density, urban, suburban, rural)
Demographics
Age, gender, family composition, income, occupation, edu, ethnic background, home ownership
IDed through company's market R info & other secondary data
Psychographics
One of most difficult variables to ID
Understanding consumers' attitudes to life, values, personalities, general interests, opinions, media usage, tech preferences, activities
Based on primary R
Behaviouristics
How & why consumers buy & use products
one of most import variables as it can direct product's positioning in market & drive main marketing communication messages of brand & promotional ideas & areas for new product development
Why consumers buy a product, expected product benefits, how product used, how frequently bought, where they buy, whether consumers are brand loyal in purchasing behaviour
Databse marketing analytics collects data on purchases & IDs purchasing triggers & loyalty
Primary R helps uncover why consumer purchase product, what product benefits most import, how product used
Secondary data provides industry data on where products most frequently purchased
Brand Loyalty
Favourable attitudes that consumer has over time toward brand that results in varying levels of purchase commitment to brand
Aim for highly committed, brand-loyal consumers to insulate brands from competitive marketing practices & rapidly changing marketing environ
Personas
Character description of brand's typical customers
Brings target market data alive by creating fictional character narratives, complete with images, one-page descrip or snapshot that capture personalities, values, attitudes, beliefs, demographics, expected interactions of typical user with brand
Simplifies & synthesizes target market data, adding fictional details so human traits & characteristics become memorable for marketers
Can have more than 1 persona
Primary persona - Main consumer
Secondary persona - Less important group that shouldn't be overlooked
Segmentation Analytics
R companies can provide general data on size & growth of markets & general consumer & lifestyle trends to assist in segmentation analysis
Environics Analytics
Highly respected marketing & analytical services company
Turns demographics, liefstyle, behavioural data into customer insights, strategy, results
PRIZM5 Segmentation System
Slices Canadian pop. into 68 lifestyle segments based on common demographics, lifestyles, interests, values
Data synthesizes info from latest census with Environics's demo projections & R on social values & consumer behaviour
Data gives ability to review info on what consumers are purchasing, what they enjoy doing, attitudes to life
Provides granular data down to the postal code
Findings of 6 Tribes of Millennials
Fewer than half of Canadian millennials say they have enough money to live the life they want
Most want good work-life balance
1 in 4 millennials actively engaged in cause or issue
Pitney Bowes PSYTE HD
Provides granular data that results in 57 unique lifestyle clusters
Postal code helps marketers discover untapped markets, finesse targeting of marketing campaigns, launch new products in appropriate markets, design cost-effective mailing & sampling programs, streamline retail offerings, select most profitable locations for new stores
Manifold Data Mining
Reputable segmentation analytics provider
Also postal code lvl data
Uses census data & stats from Citizenship & Immigration Canada, Health Canada, Industry Canada, Bank of Canada, real estate orgs, provincial ministries of health, Numeris Canada & Manifold proprietary databases
Steps in Market Segmentation
Combo of analytical skills, strategic thinking, understanding consumer, vision on where market is heading & how to fit with company's direction
1) Identify Consumer needs & common characteristics in market
What drives the category& what future trends are evolving
ID common interest & evolving trends by analyzing what products currently exist in category, which areas market expanding & shrinking & where consumer interests lie
Use databases & R
2) Cluster common consumer variables to create meaningful market segments
Look at products & gaps in market to ID consumer interests, usage patterns, prevailing attitudes
New areas = Evolving segments
RFM analysis (recency, frequency, monetary value) - Rate customers on how recently products purchased, how often products purchased, dollar value of transaction. Then scored & segment created for customized marketing messaging
3) Estimate size & feasibility of each segment
Forecast sales potential for segment & consider competitive reactions
4) ID segments to be targeted
Segment Criteria
Market size
Expected growth
Competitive position (less competition, the more attractive the segment is)
Compatibility with org's objectives & resources
Cost of reaching segment
5) Take actions with marketing programs to reach segments
Create a marketing plan & implement
Decisions about marketing mix (product, price, place, promotion) consistent with needs & wants
Set specific objectives - Evaluate regularly & adjust as needed
6) Monitor & evaluate success of these programs compared with objectives
Work with financial analysts to determine sales forecasts, costs, profits realized in comparison with cose & sales projections outlined in steps 3-5 of segmentation process
Positioning
Repositioning
Implemented in stages over time with refresh of brand & elements of its marketing mix
Org rarely changes this, but will if long-term changes in consumer attitudes or opinions of brand require shift in brand's image to more accurately meet consumer needs & reflect how it fits their lifestyle & needs
Positioning Maps
[Perceptual Maps]
Visual reps of how products or product groups are positioned in category to consumers
Visually rep categories in market or more specifically, product & brand offerings in category
Reveals gaps in market where consumers underserved & highlights competitive nature of category
3 steps to effectively position product by discovering perceptions of potential customers
1) ID import attributes for product/brand class
Price is often not first criteria
2) Discover how target customers rate competing products/brands with respect to these attributes
3) Discover where company's product/brand is on these attributes in minds of potential customers
Product Positioning
Impression of branded product you want to establish in consumers' minds relative to their needs & in contrast to competition
Combo of factors to position prodicts
Leading with elements that are real
Differentiate product
Create long-term, memorable impressions with consumers
3 basic factors or combo of factors for positioning
Image
Products positioned as leaders, contenders, rebels in market & take on characteristics such as trusted, prestigious, thrifty
Product Attribute
Features that differentiate them from competition often positioned on platform, bringing product claims to forefront
Price
Products with brand parity & little product differentiation may position themselves on price platform
Positioning Statement
Formalized statement that IDs image of branded product reps in market & what sets it apart from competition
Often included in brand's annual marketing plan & relevant strategic docs
Import for all functional areas of company to understand product's positioning - Drives org activities
Must be simple, clear, focused - 4 Elements
Target market & need
Branded product name
Category which product competes
Brand's unique attributes & benefits
Example
For (target market) who desire (target market need), (brand) is the (product category) that offers (product benefits)