market segmentation, targeting and positioning b

Process of identifying distinct, relevant, market needs that can be best served separately than through

a generic strategy

Brand Market Analysis and Strategic Segmentation

Process

More commonly known as STPSegmentation Targeting and

Positioning

What is the definition of segmentationProcess of dividing the market in fragments

or parts that have similar needsThese segments are deemed to be better

served separately rather than by one product or strategy

The Marketing Management ProcessAssessment ends and where Segmentation

begins for new products getting into the new category

For old products, a review of the current market and an assessment of the product range that covers each relevant segment. (conduct the usual market audit)

Demystifying all the myths about this process

How does segmentation REALLY EVOLVE

Once upon a time in LaLa LandThe guru discovered, during a hot

summer day, that by placing dark colored cellophane in his eyes, it made his eyes.

So he went back to his lab and tinkered and placed colored cellophane on his glasses…. And viola!!!! Sunglasses!!!!

Am I a genius or what…. =) - Guru

Business person yata si guruHe made one model and sold the model to

everyone in the market.Everybody loved the product and

everybody bought the new GURU shades (me tagline pa…. To be a guru, you have to look like one =P – naks!)

The sales were brisk and Guru made a fortune…Next time makita nyo si Guru palibre

kayo…. =DBut there were greedy people from the

LaLa Land and is envious of Guru Shades. One of them is Mr.Clean

Mr. Clean was studying carefullyI have two optionsTo come up with a better designed pair of

shadesOr to come up with a shades that is

cheaper.

He went up to 5th floor library for two years and thought about his idea.

But lo and beholdFairy Godmother Ming was joyfully flying

through the halls of LaLa Land and saw Mr. Clean, problematic, pragmatic and in deep thought.

FGM landed and asked MC what his problem is.

FGM simply said that in a market with a new product, there would always be space for everyone.

MC is now enlightened

BLING!

MC decided to attackTarget the same market as Guru shades

but I would price my product a bit lower. This would enable MC to capture market

share

Naks low price strategy si MC me lahing Chinese din pala

Guru Shades is left with 65%…

MC did earn his share…. He is the owner of 35% the market

And the plot thickens…MC is aggressiveGuru is upset …. (umuusok ang ilong at

umiitim ulit ang buhok)And more people are looking into the

category as the summer heats up!!!

New player comes in… with lots of cash to dispense and lots of wits…..

How did Sister Shades got the idea?

Sister Shades!!!!!!

SimpleGuru Shades and Clean Shades looks the

same. With minimal marketing strategy know how, they thought one product could fit all…

Sister Shades tried the Guru shades and Clean shades and she was disappointed. Hindi sya beauty sa shades na yun…. =P

CheCheng!!!Idea came from her own that there is a

space in the market that would appreciate better looking shades and this would be the female market

Mas kikayMas beauty

And then there were othersShades for the eliteShades for the yuppiesShades for babiesShades for oldies (mataas ang grado at

baduy) wehehehe

Guru’s share is now only 2% and the shades market is cluttered by as

much as 500 market players

The end of it all….

Segmentation Process EXISTING PRODUCTSIntegrate ideas in Consumer Behavior

Analysis.Draw out market sizing and existing

competitor profile in each segment Formulate a SWOT analysis based on the

relevant market segments

Three Approaches in Market driven strategyMass Marketing

Cater to allTarget Marketing

Select segment or group of segments that has the same needs and wants

Niche MarketingSelect one segment and choose to compete

strongly (usually a very small segment)

Corned Beef ExampleArgentina caters to the mass marketClass A, B, C and DThe product and the brand appeals to a

very broad range of consumersMarketing efforts are concentrated in

appealing to the masses And below the line efforts are used to

target specific segments

Niche Marketing Choosing a segment and specializing in

itKink Cakes chose to specialize on

special event pastriesGoldilocks and Red Ribbon competes for

the mass market specifically A, B and CJoni’s goes for the C and DJulia’s Bakeshop targets and lower C and

D

ProfilingProcess of identifying market segment user

characteristicsUser segment can be DESCRIBED IN 3

WAYSDEMOGRAPHICBEHAVIORALPSYCHOGRAPHIC

Demographic Segmentation based on their personal

statisticsAgeGenderSocial economic classOccupation

ExampleGun market

HuntersPoliceHobbyists

Hobbyist could further be segmented into the followingYoungOldRichRicher

Behavioral SegmentsHow the consumers use the product or the

rate they use it.

Rate of usageUser statePlace of usageType of industry

ExampleSmokerDrinkers

Heavy drinkersSocial drinkersNon drinkers

SmokersChain smokersSocial smokersPretending to be smokers

PsychographicWhat they think of themselves when they

use the productWhat are they thinking prior to purchaseWhat they think of themselves in relation to

the product

ExamplesWeight consciousHealth conscious Critical“In” Discriminate taste

Example of a Market Driven Segmentation Approach

Entry level drinkers

Teenagers Adventurous, individuality search

Advanced drinkers

Yuppies More money to spend, pre disposed to try. Social Drinker

Sophisticated Executives Care about image.Ego

Health Drinkers Retirees Want to enjoy life with good health through healthy lifestyle

Market Segmentation Process for NEW PRODUCTS Find the most dominant segmentation base

driversCars = Socio economic segmentationClothes = demographics -> economic

Description of segments through other brand segmentation basesDemographic => Behavioral / Psychographic

Step #2: SWOT for eachAnalyze the segments by formulating a

SWOT analysis for each segmentImplement a CPM for each segment

Brand

A

B

C

Next Steps Choose the segments where you would

have the best chance of winningTarget that segment for the following

reasonsBest chance to winMost profitableMost strategicStop gap measure

Targeting is a decision….Market Targeting is a process of

allocation of company effort and resources towards a certain market segment.

Targeting is a match between the company’s products and services and the inherent NEEDS AND WANTS characteristics of the target segment

WRONG TARGET…. LOW PROBABILITY OF SUCCESS….

Types of target marketMultiple segments

Especially if the needs are homogenousSingle segmentPrimary target market (PTM)

Main focal point of all marketing programsSecondary target market (STM)

Used only as a consideration for marketing programs

After Targeting…..POSITIONING!!!!!!!!!!!!

Positioning PrefaceConjoint Analysis

Measurement of importance attributes relative to category

Competitive Importance Attributes AnalysisDrawing of perceptual map per product

attribute analysisPositioning

Conjoint Analysis ExampleBallpens

Attributes deemed as importantPoint – sharpnessSmoothness in writingInk color – how dark is the inkBarrel and design

Positioning should be based on an attribute that is solely your brand’s

Main strategic point of the marketing management process

Positioning

Promil? – GiftedColgate = Flouride

Polo = Mint with a holeKFC = ChickenVolvo = Safety

Own a word in the consumer’s mind……

How is positioning doneAfter choosing the target segmentEvaluate competitionChoose a USP (Unique Selling Proposition)

- the difference you choose to communicate to your market.

Missing word is Sustainable Coin this into a positioning statementGenerate a slogan (work of the ad agency)

Why is Positioning important?Create a distinction between our brand and

its competitorsReason for buyingServes as a guide for marketing mix

execution

Examples:

Flouride and healthy teeth for the family

White teeth, fresh breath for the young

Cheap

Global brand

What happens if you are not differentiated?

What happens if you are too differentiated?

Not mass marketDifferentiated and focused market

What is Positioning?Creating a distinct and relevant

differentiation between the brand and it’s competitors

Key wordsDistinct – being differentRelevant – difference being important

Distinct

Does not resemble another brand’s positionBased on actual product or corporate

differentiation and core competenceAdvantage should be sustainable and cannot

be copied by competitorsAdvantage means that the company can do

it best….”NO OTHER BRAND CAN DO IT BETTER”

Not based on a basic product promiseLasang Orange Talaga – tagline for Orange juiceNatural…… -- BETTER!

RELEVANCEThe advantage / positioning should be:

Important to the target marketWanted by your target marketIt is would be bought by your target segment

due to this positioningIntention to buy is important

Positioning alternativesPrice – We are cheaperProduct attribute – What the product has or

what they can do (Colgate with 2 flouride)Product category – We’re a different animalProduct Source – coming from a place where

it is known (Pampanga Tocino)User Segment – we belong to a different

market (Gatorade – Sports Drink)Benefit – what they can get from the productAgainst competition

Cheaper Positioning

Not necessarily cheaper but best value for money

Product Attribute

At first it was differentiated according to the beer having less calories…Then… all the brands followed….

Product Category

Now it is differentiated as a whole new category

But within this category, they still have to position among themselves

Product Source

Or you brands that gloats with New Zealand Milk, American made, German sausages, Batangas beef etc

The Philippines has a very strong Ice Cream equity

User Segment

Where celebrities work out

For the people who know….Sa mga nag tagumpayCan be used as a snob appeal

Benefit

Whiter Skin

Younger Skin

MinteeMint Candy (obvious ba)Last for 16 hours in your mouthDries fast (recyclable) No sugarGood for your teeth – dental supplement

attributesSlogan making contest

SamplesIts mint to bePwedeng ibulsa hanggang bukasMintee … Ngayon at Bukas

Slogan winning entriesG. Alfaro and J. Santos Laquian and CarandangCabrera and Ong – Sexy, Fresh, Have it

AllHuang and Eia Santos, Impossible to be

RealDator and Javier – Sinless Mint

Complete with justification and rationaleNot the correctness of the positioning

but the route towards the correct slogan

The right positioning routeSegment the market y studying consumers

extensivelyAnalyze the competition and the

environmentChoose a position that is unique and valued

by competitionCommunicate this differentiation

Top 5 answers are on the board Each pertains to the brand with various

associationsBased on a survey conducted on 100

peopleHere are the results

SPRITE

Clear 54Sweet 39Fun 17

Sunsilk

Girl 52Power / Success 35Affordale / Cheap10

Black / Colored 7

Assumption / Assumptionista

Sosyal / rich 27English Speaking 25Smart / Intimidating 20Party / Fun 15Fashionista / Pretty 13

Products: Turon

BibingkaPutoEtc

Case: Assumption Natives

Consumer Segments and descriptionCollege

Looks sosyal and snobishAge range from 17 to 23Budget is not a concernGood taste and patronizes the products that

taste good rather than the brandPrice conscious

High schoolImpulse buyersRich kidsBrand consciousLimited time to go to canteen and eatUsed to grand lifestyleFun lovingQuite proud of being Assumptionistas

Grade SchoolLimited budgetLimited timeRich kidsProduct loyal and brand loyalFriends are the best influencers

Task….. Provide the target market and positioning

of this product Name your product - BrandMake a product description of your brandStudy the competitors of your target

segmentMake a positioning proposal