Download Market Segmentation

Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 7:
Customer-Driven
Marketing Strategy
Creating Value for Target Customers
Lecturer:
Szilvia Bíró-Szigeti, PhD
Department of Management and Corporate
Economics
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1-1
Customer-Driven Marketing Strategy
Which customers will we
serve?
How will we serve them?
FIGURE | 7.1
Designing a Customer-Driven Market Strategy
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Market Segmentation
Market segmentation requires dividing a market into
smaller
segments
with
distinct
needs,
characteristics, or behaviors that might require
separate marketing strategies or mixes.
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Market Segmentation
• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation
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Market Segmentation
Segmenting Consumer Markets
Geographic
segmentation
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
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Bases for segmenting consumer markets
Geographic
segmentation
nations, regions, states,
counties, cities, etc.
Psychographic
segmentation
social class, values,
lifestyles, personality
Demographic
segmentation
age, gender, generation, family size, family life
cycle, income, occupation, education, religion,
race, and nationality, etc.
Behavioral
segmentation
knowledge, attitudes, uses, or responses to a
product (occasions, benefits sought, user status,
usage rate, loyalty status)
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market into
different geographical units such as nations, regions,
states, countries, cities, or even neighborhoods.
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http://www.lamptech.co.uk/Documents/FL%20Colours.htm
whole of Asia
Southern Europe
Continental Europe &
North America
UK
Nordic countries
People in northern
regions prefer warm
white light colors,
whereas people in the
south prefer colder
light.
Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the market into
segments based on variables such as age, life-cycle
stage, gender, income, occupation, education, religion,
ethnicity, and generation.
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Market Segmentation
Segmenting Consumer Markets
Age and life-cycle stage segmentation divides a
market into different age and life-cycle groups.
Gender segmentation divides a market into different
segments based on gender.
Income segmentation divides a market into
different income segments.
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Demographic segmentation
Gender
and age
https://www.youtube.com/watch?v=q6iho8w7u5Q
https://www.youtube.com/watch?v=WNmXaazGk5k
https://www.youtube.com/watch?v=laEWNrwEdlo
Asiana „Happy Mom” and „PreMom*” service
Family
life
cycle
*„babymoons”
- exclusive check-in counter, free breast feeding nursing covers,
baby slings, car seat-like baby seats in the air
- exclusive check-in counter, electric cart service: transport to the
departure gate, priority boarding, front row seat, sleeping socks,
special priority tag (checked luggage)
http://www.airlinetrends.com/2009/10/26/asiana-happy-mom-service/
http://www.airlinetrends.com/2010/11/04/asiana-premom-service/
Zipcar for University
Occupation
https://www.youtube.com/watch?v=UMSKunr6ty4
Market Segmentation
Segmenting Consumer Markets
Psychographic
segmentation
divides a market
into
different
segments based
on social class,
lifestyle,
or
personality
characteristics.
DUNKIN
Pic
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Psychographic segmentation
Urban lifestyle
• green
• convenient, hassle
free
• save money
“It’s not about cars, it’s
about urban life.”
https://www.youtube.com/watch?v=ONPj2liqdmo
Clubbing holiday for „Party Animals”
Personality
We are Party Hard Travel - the only online travel agency
where you can book everything you need for the
ultimate clubbing holiday!
.
Personality
„Anti-social in the Air”
• 76 percent of travelers prefer to
keep to themselves while inflight
• only 9 percent expressed interest
in trying a "social seating"
program that allows fliers to
choose a seatmate based on
social network profiles
• 40 percent would pay extra to
sit in a designated "quiet"
section of the plane
http://www.airlinetrends.com/2013/09/05/long-haul-low-cost-carrierscoot-takes-a-cue-from-airasia-x-with-new-quiet-zone/
http://www.airlinetrends.com/2012/09/02/airasiax-kids-free-quiet-zone/
http://www.tripadvisor.com/PressCenter-i5162-c1-Press_Releases.html
Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides a market into
segments based on consumer knowledge, attitudes,
uses of a product, or responses to a product.
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Market Segmentation
Segmenting Consumer Markets
Behavioral Segmentation
•
•
•
•
•
Occasions
Benefits sought
User status
Usage rate
Loyalty status
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Behavioral segmentation
Occasions
Occasions refer to when
consumers get the idea to buy,
actually make their purchase, or
use the purchased item.
Coca-Cola’s “Good Morning”
campaign attempts to increase Diet
Coke consumption by promoting the
soft drink as an early morning pickme-up.
Uses
http://corporate.easyjet.com/~/media/Files/E/Easyjet-Plc-V2/pdf/investors/presentations/easyjet_gb_airways_acquisition_update.pdf
#DidYouKnow You can fit 33,000 IKEA
meatballs in a MINI?
https://www.zipcar.com/careers
Market Segmentation
Segmenting Consumer Markets
Using Multiple Segmentation Bases
Multiple segmentation is used to identify smaller,
better-defined target groups.
Experian’s Mosaic USA system classifies U.S.
households into one of 71 lifestyle segments and 19
levels of affluence.
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Market Segmentation
Segmenting Business Markets
Consumer and business marketers use many of the
same variables to segment their markets.
Additional variables include:
• Customer operating characteristics
• Purchasing approaches
• Situational factors
• Personal characteristics
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Market Segmentation
Segmenting International Markets
Geographic
location
Economic
factors
Political and
legal factors
Cultural
factors
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Market Segmentation
Requirements for Effective Segmentation
Measurable
Accessible
Differentiable
Substantial
Actionable
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Effectiveness of the Segmentation
Measurable: The size, purchasing power, and profiles of the
segments can be measured.
Accessible: The market segments can be effectively reached and
served.
Substantial: The market segments are large or profitable enough
to serve.
Differentiable: The segments are conceptually distinguishable
and respond differently to different marketing mix elements and
programs.
„If men and women respond similarly to marketing efforts for soft
drinks, they do not constitute separate segments.”
Actionable: Effective programs can be designed for attracting and
serving the segments.
Market Segmentation
Segmenting International Markets
Intermarket segmentation involves forming
segments of consumers who have similar
needs and buying behaviors even though they
are located in different countries.
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Market Targeting
Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
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Market Targeting
Selecting Target Market Segments
A target market is a set of buyers who share
common needs or characteristics that the
company decides to serve.
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Market Targeting
Selecting Target Market Segments
FIGURE | 7.2
Market-Targeting Strategies
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Market Targeting
Selecting Target Market Segments
Undifferentiated marketing targets the whole
market with one offer.
• Mass marketing
• Focuses on common needs rather than
what’s different
Company
marketing
mix
Market
Model T Ford, „one size fits all”
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Market Targeting
Selecting Target Market Segments
Differentiated marketing targets several different
market segments and designs separate offers for
each.
• Goal is to achieve higher sales and stronger position
• More expensive than undifferentiated marketing
Company
marketing mix 1
Company
marketing mix 2
Company
marketing mix 3
Segment 1
Segment 2
Segment 3
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Market Targeting
Selecting Target Market Segments
Concentrated marketing
targets a large of a
Company
smaller market.
marketing
• Limited company
mix
resources
• Knowledge of the market
• More effective and efficient
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Segment 1
Segment 2
Segment 3
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Market Targeting
Selecting Target Market Segments
Micromarketing is the practice of tailoring products and
marketing programs to suit the tastes of specific individuals
and locations.
• Local marketing
involves tailoring brands and promotion to the
needs and wants of local customer groups.
(cities, neighborhoods, stores)
• Individual marketing
involves tailoring products and marketing
programs to the needs and preferences of
individual customers.
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Market Targeting
Selecting Target Market Segments
Choosing a targeting strategy depends on
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies
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Market Targeting
Selecting Target Market Segments
Socially Responsible Target Marketing
• Benefits customers with
specific needs
• Concern for vulnerable
segments
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Differentiation and Positioning
Product position
is the way the
product
is
defined
by
consumers on
important
attributes.
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Differentiation and Positioning
Positioning Maps
Positioning maps
show
consumer
perceptions
of
marketer’s brands
versus competing
products
on
important buying
dimensions.
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
• Identifying a set of possible competitive
advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
• Communicating and delivering the chosen
position to the market
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Competitive advantage is an advantage over
competitors gained by offering consumers greater
value, either through lower prices or by providing
more benefits that justify higher prices.
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Product
Services
Channels
People
Image
Identifying a set of possible competitive
advantages to differentiate along the lines of:
• Identifying a set of possible competitive
advantages to build a position
• Choosing
the
right
competitive
advantages
• Selecting an overall positioning strategy
• Communicating and delivering the chosen
position to the market
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Choosing the Right Competitive Advantage
A difference to promote should be:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Value proposition is
the full mix of
benefits
upon
which a brand is
positioned.
More for more: This positioning involves providing the most upscale product or
service and charging a higher price to cover the higher costs. Although more for more
can be profitable, this strategy can also be vulnerable. It often invites imitators who
claim the same quality but at a lower price.
More for the same: Companies can attack a competitor’s more for more positioning
by introducing a brand offering comparable quality at a lower price. For example,
Toyota introduced its Lexus line with a more for the same value proposition versus
Mercedes and BMW.
The same for less: Offering the same for less can be a powerful value proposition everyone likes a good deal. Discount stores such as Walmart use this positioning.
Less for much less: A market almost always exists for products that offer less and
therefore cost less. Few people need, want, or can afford “the very best” in
everything they buy. In many cases, consumers will gladly settle for less than optimal
performance or give up some of the bells and whistles in exchange for a lower price.
More for less: Of course, the winning value proposition would be to offer more for
less. Many companies claim to do this. And, in the short run, some companies can
actually achieve such lofty positions. Offering more usually costs more, making it
difficult to deliver on the “for less” promise in the long run.
Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Positioning statement summarizes company or brand
positioning using this form: To (target segment and
need) our (brand) is (concept) that (point of difference)
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Positioning Statement Example for Evernote:
“To busy multitaskers who need help remembering things,
Evernote is a digital content management application that
makes it easy to capture and remember moments and
ideas from your everyday life using your computer, phone,
tablet, and the Web.”
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Differentiation and Positioning
Communicating and Delivering the Chosen Position
Choosing the positioning
implementing the position.
is
often
easier
than
Establishing a position or changing one usually takes a
long time.
Maintaining the position requires
performance and communication.
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consistent
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Re-positioning
Commerce bank:
• Most convenient bank of America
• Open: every day, newspaper, quick administration,
caffee, small change automata
Re-positioning
Jetblue
• No dining, no classes, no return ticket,
• High-tech entertainments, convient leather-armchair
• Different segments
Uprooted positioning
1. IKEA vs original furniture shops
2. Wide furniture offering:
• Furniture for ever – disposable and exchangeable
• Other services:
•
•
•
•
•
•
Staff
Carriage
Big and modern halls
Kinder – playing places
Restaurant
Supplementary products
Uprooted positioning
Undercover positioning
Customer-Driven Marketing Strategy
AirAsia has developed a competitive
advantage by targeting
price-conscious, short haul travelers
who don’t mind a no-frills
service if it means lower fares.
Discussion Questions:
- How would you describe AirAsia’s
approach to market segmentation?
- Look at the price strategy of
AirAsia. What are the negative
aspects for a brand that offers
cheaper
services
than
its
competitors?
- How does the chapter-opening
AirAsia story relate to the
segmentation and positioning
concepts?