segmentation, tarketing & positioning for competitive advantage
TRANSCRIPT
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Segmentation, Targeting &
Positioning for CompetitiveAdvantage
Prof. Rushen Chahal
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Marketing Process Involves
Market orientation as philosophy
Market segmentation
Targeting market
Positioning
Marketing mix
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Marketing Strategy
Select base for segmentation and identify appropriatemarket segments.
Evaluate and appraise the market segments resulting from
the first step. Select an overall market targeting strategy and specific
target segments.
Tailoring a distinct position in selected markets
Developing marketing mixes that serve desired positioningstrategy in the marketplace
Auditing marketing environments and efforts
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Importance of
Segmentation and Targeting
The focus of a successful marketing program is thecustomer. Effectively marketing must fully understand the
needs. Customers with decent life and individualism have
Heterogeneous demands, This has given rise to needsegmenting.
The process of understanding the customer and choosing agroup of customer you can serve best is targeting.
So target a segmentation is core of the marketing process.
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Identify the TotalMarket
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Objective 3
Identify Total MarketIdentify Total Market
Effective SegmentationEffective Segmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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Identify the Total Market
The first step in the target market
selection process is to specifically definethe total market of all potentialcustomers for a product category.
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Segmentation and Effectiveness
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Objective 3
Identify Total MarketIdentify Total Market
EffectiveEffective
SegmentationSegmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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Segmentation
Segmenting means dividing a heterogeneousdemanding markets into homogenous groups basedon similar characteristics or traits
Heterogeneous demand- different groups ofcustomers have differing needs from specificproducts.
Homogeneous segment- the separation of marketsinto distinctive groups based on homogeneouscharacteristics.
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Criteria for
successful segmentation
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Criteria for
successful segmentation
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Clear differences
in consumerpreferences for a
product must
exist.
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Criteria for
successful segmentation
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Difference
preferences for a
product must beidentifiable and
capable of being
related tomeasurable
variables.
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The proposed
market segmentmust have enough
size and
purch
asing powerto be profitable.
Criteria for
successful segmentation
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Criteria for
successful segmentation
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Companies must
be able to respond
to difference
preferences with
an appropriate
marketing mix.
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Criteria for
successful segmentation
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The proposed
market segment
must be readilyaccessible and
reachable with
market programs.
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Determine Bases for Segmentation
15Objective 3
Identify Total MarketIdentify Total Market
EffectiveEffective SegmentationSegmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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Bases for Segmentation
To divide a market into segments, firms use
segmenting criterion that describe thecharacteristics of each part of the market.
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Segmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
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Life-cycleLife-cycle
Social classSocial classSocial classSocial class
Income LevelIncome LevelIncome LevelIncome Level
EthnicEthnicEthnicEthnicEducationEducationEducationEducation
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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
Localizes its marketing efforts to specific
geographic regions
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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
Grouping customers together based on
social class, lifestyles and psychological
characteristics (attitudes, interests andopinions)
Useful but more difficult to identify and
measure compared to demographicvariables
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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
Markets can be segmented based
on the benefits that consumersdesire from using a specific
product
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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
Purchase situation or occasion
Physical surroundings
Social surroundings
Temporal perspective
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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base
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SituationSituation
SegmentationSegmentation
PsychographicPsychographic
SegmentationSegmentation
GeographicGeographic
SegmentationSegmentation
Behavior/UsageBehavior/Usage
SegmentationSegmentation
DemographicDemographic
SegmentationSegmentation
BenefitsBenefits--SoughtSought
SegmentationSegmentation
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Segmentation Base
Markets can be segmented by how often or howheavily consumers use a specific product
Paretos Principle or 80/20 Principle - 80% of revenuegenerated by 20% of customers
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Light Users
80%
Light Users
80%Heavy Users
20%
Heavy Users
20%
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Segmentation Base
Information for segmenting marketsmay be obtained from database such
as Census, State Statistics, ACORN
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Segmenting Business Markets
While the steps in the target market selectionprocess are essentially the same for businessmarkets, there are three major differences:
The purchasing process, which differs greatlyfrom the household consumer market.
The use of different segment variables, in simpleway, a Standard Industrial classification is often
employed
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Segmenting BusinessMarkets
Segmentation variables used to segment businessmarkets:
Size
Industry
Purchasing approaches
Product usage Situational factors (seasonal trend)
Geographic
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Select Segments for Targeting
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Objective 3
Identify Total MarketIdentify Total Market
Determine Need forDetermine Need for
SegmentationSegmentation
Determine Bases forDetermine Bases for
SegmentationSegmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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Targeting
Targeting: choose the specific segment toward whicha firm directs its market efforts.
NicheMarketing: the process of targeting a small
market segment with a specific, specializedmarketing mix.
Micromarketing- the process of targeting smaller,more narrowly defined market segments.
On the individual consumer end of the continuum, afirm may decide to target individual consumers andpersonalize marketing efforts toward each.
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Target the MassMarket versus the
Individual Consumer
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Mass
Market
Niche Micro-
marketing The
Individual
Personal-
izationMicro-
marketingNicheStandardizedMarketing
Mix
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Advantage of Targeting Efforts
Cannot effectively serve all the segments, must
target marketing efforts to a segment or segments.
Marketing opportunities and unfilled gaps are
more accurately identified
Marketing mix is more delicately meet toe
potential customers needs
Offer the greatest potential to achieve profit orrelationship goals
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Targeting Strategy
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1.Undifferentiated marketing
2.Differentiated marketing
3.Concentrated marketing
4.Custom marketing
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Targeting Strategy
Companies might
develop one
marketing mix
strategy that isappropriate for all
members of the
total market.
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Undifferentiated targeting strategyUndifferentiated targeting strategy
Concentrated strategy
Differentiated strategy
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Targeting Strategy
Only one
marketing mix is
developed and
directed toward afew, or perhaps
one, profitable
market segments.
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Undifferentiated targeting strategy
Concentrated strategyConcentrated strategy
Differentiated strategy
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Targeting Strategy
Exists when a firm
develops different
marketing mix
plans specially
tailored for each of
two or more
market segments.
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Undifferentiated targeting strategy
Concentrated strategy
Differentiated strategyDifferentiated strategy
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Alternative of Targeting Strategy
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1. Single segment
2. Multi segment3. Product specialized
4. Market specialized
5. Full market coverage
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Select Positioning Strategy
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Objective 3
Identify Total MarketIdentify Total Market
EffectiveEffective
SegmentationSegmentation
Determine Bases forDetermine Bases for
SegmentationSegmentation
Targeting SegmentTargeting Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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Positioning
Positioning
Kotler defined: designing an offer
so that it occupies a distinct and
valued place in the minds of thetarget customer.
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Positioning
Positioning
Image that customers have about a
product in relation to the
products competitors 43
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Positioning Strategy
Key to developing the appropriate
marketing mix is the positioning
strategy of the product.
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Presumptions of Positioning
All products have object and subject
attributes
Recognizable
Comparable
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Select Positioning Strategy
Effective positioning
What consumers currently think about the
product, especially in relation to competing
products What the marketer wants consumers to
think about the product
Which positioning strategy will elevate theconsumers current product image to the
desired product image.
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Select Positioning Strategy
Position Mapping- creating a visual
description about consumer
perceptions of a product on two or
more dimensions in relation to
competitors.
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Select Positioning Strategy
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Select Positioning Strategy
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Select Positioning Strategy
The positioning strategy must determine where acompany wants to go
And how to get there by positioning the productaccording to any of the following ways:
Price/Quality Product Attributes
Product User
Product Usage
Product Class Competition
Symbol
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MarketingMix
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Objective 3
Identify Total MarketIdentify Total Market
SegmentationSegmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate andMonitor, Evaluate and
ControlControl
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MarketingMix
The final steps are to develop and a marketing
mix matched to the needs of the target market
This must support the chosen positional
strategy in the selected target markets
Therefore determine the 4Ps or 7Ps of its
marketing mix as a tool to achieve the desired
position
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Recognize 4Ps and the 7Ps
Productcustomer value
Pricecost
Placeconvenience Promotioncommunication
Peopleconsideration
Processesco-ordination
Physical evidenceconfirmation
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Marketing Strategy and the Marketing
Mix
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Objective 4
ProductPlace
(Distribution)
Promotion Price
Marketing
Mix
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Marketing Strategy and the Marketing
Mix
Refers to goods, services, people, places and
ideas Household consumers
Business-to-business customers
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Product
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Marketing Strategy and the Marketing
Mix
Marketing channel is the network of
organizations that create time, place and
ownership utilities for household
consumers and business customers.
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Place
(Distribution)
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Marketing Strategy and the Marketing
Mix
IntegratedMarketing Communication (IMC)
System of management and integration ofmarketing communication elements
Advertising, publicity, sales promotion, personalselling, sponsorship marketing, and point-of-purchase communications
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Promotion
k h k
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Marketing Strategy and the Marketing
Mix
Pricing decisions are complex and are driven by avariety of considerations including:
Customer demand, costs, information
availability, competition, profit motives, productconsiderations, and legal considerations
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Price