Download The process of segmenting and targeting connects marketing

The process of segmenting and targeting connects
marketing actions to Identification of marketing needs
Identify
Market
Needs
Steps in Segmenting & Target Markets
•Form prospective buyers into segments
•Form products to be sold into groups
•Develop a market-product grid and
Estimate size of markets
•Select target markets
•Take marketing actions to reach
target markets
Execute
Marketing
Program
Market product grid showing Reebok reaches
customers with different needs
MARKET SEGMENT
Fashionconscious
consumers
Performance-conscious
(nonathletes) consumers (athletes)
GENERAL
GROUP W/
NEED
Runners
Aerobic
Dancers
PRODUCT (Kind of Shoes)
BASKET
CROSSRUNNING AEROBIC TENNIS BALL CHILDREN'S WALKING TRAINERS STEP-TRAINERS
(1981)
(1982)
(1984)
(1984)
(1984)
(1986)
(1988)
(1991)
P
P
P
Tennis Players
Basketball
Players
P
P
P
P
P
Step
Exercisers
Comfort &
Style
Conscious
S
S
S
S
S
S
Walkers
S
S
S
S
P
P
Children
S
P
Key: P = Primary Market; S = Secondary Market
P
Advertising actions to reach specific student segments
Markets
Dormitory Students
Apartment Students
Day Commuter Students
Night Commuter Students
Ads in buses: flyers under
windshield wipers of cars
in parking lots
Lunch
S
L
L
0
PRODUCTS:
Between MEALS
Meal
Snacks
Dinner
L
0
L
S
M
S
S
L
Ad campaign: “Ten
percent off all purchases
between 2-4:30PM
during winter quarter
AfterDinner
Snacks
L
S
O
M
Ad on flyer under
windshield wipers of
cars in night parking
lots: “Free Frosty
with this coupon
when you buy a
hamburger with fries.
Selecting a target market for your fast-food restaurant next
to metropolitan college. Target market is shaded.
Markets
PRODUCTS:
Between MEALS
Meal
Snacks
Dinner
AfterDinner
Snacks
Breakfast
Lunch
STUDENTS
Dormitory
Apartment
Day Commuter
Night Commuter
0
S
0
0
S
L
L
0
L
L
M
S
0
S
S
L
L
S
O
M
NON-STUDENTS
Faculty or staff
Live in area
Work in area
0
0
S
L
S
L
S
M
0
S
M
S
0
S
0
Key: L, Large Market; M, Medium Market; S, Small Market; 0, No Market
Market-product grid showing size of markets for
pillows for three different segments of sleepers
MARKET
Stomache Sleepers
Back Sleepers
Side Sleepers
SOFT
PILLOW
L
M
S
MEDIUM
PILLOW
M
L
M
Key: L, Large Market; M, Medium Market; S, Small Market
FIRM
PILLOW
S
M
L
Market Segmentation
1. Def. Classification of prospective buyers into
homogeneous groups from the twofold perspective
of:
a) Common needs
b) Common response to marketing actions
2. Classification of Consumer Markets
a) Homogeneous
b) Diffused
c) Clusters
3. Criteria for Segmenting Consumer Markets
a) Geographic
b) Demographic
c) Psychological
d) Behavioral
- Occasions
- Benefits sought
e) User Status
f) Usage Rate
g) Loyalty Status
h) Attitude
4. Market Coverage Strategies
a) Undifferentiated Marketing
b) Differentiated Marketing
c) Concentrated Marketing
5. Seven Criteria For Selecting A Marketing Strategy
a) Company Resources
b) Product Homogeneity
c) Product Stage in Life Cycle
d) Market Homogeneity
e) Competitive Marketing Strategies
f) Feasibility of Marketing Programs
g) Profits
Positioning
Def. All of the organization’s actions associated with
designing a product and creating an image so that it
occupies a unique place in the customer’s mind, vis-àvis competitive products. Should be sustained and
profitable.
Six Positioning Strategies:
1)
2)
3)
4)
5)
6)
Attribute
Use
User
Product Class
Competitors
Price and Quality
Attribute Segmentation
Toothpaste Marketing Segments
ATTRIBUTES
Flavor
Color
Whiteness
Fresh Breath
Decay Prevention
Plaque Removal
Stain Removal
Gingivitis
Price
Brands
Children
Teens-Young
Adults
Family
Adults
X
X
X
X
X
X
X
Aim, Stripe
Ultra Brite,
McCleans, Pearl
Drops, Rembrandt
X
X
X
Topol,
Colgate, Crest, Mentadent, Total,
Total
Rembrandt
Branding
1. Five Options:
a) Multi-Product Branding
b) Multi-Mix Branding
c) Multi-Branding
d) Private-Branding
e) Co-Branding
2. Growth Strategies
a) Line Extensions
b) Brand Extension
c) Flanker Brand Extension
d) Fighting Brand
Product Differentiation
Product
•
•
•
•
•
•
•
Services
Personnel
Channel
Insert
Ordering Ease
Competence
Coverage
Features
Delivery
Courtesy
Expertise
Performance Installation
Credibility
Performance
Durability Customer Training Reliability
Reliability Customer Consulting Responsiveness
Repairability Maintenance/Repair
Communication
Style
Misc.
• Design
IMAGE
•
•
•
•
Symbols
Media
Atmosphere
Events
I. Product
1.
2.
3.
4.
5.
Form: Size, Shape, Physical structure of product.
Ex. Aspirin; Dosage, Size, Shape, Coating, Action time, Etc.
Features:
-Co. Cost vs. Customer Value
- Bundles or packages vs. Simple Add-Ons
Quality
- SPI finds: ROI = +f(quality)
- Promotes customer loyalty
Ex: Schlltz: increase SR cut aging time,used less expensive hops
Result: SR ¶ increases, Stock price increases, but LR market share decreases & so did ¶
& stock prices
Durability:
Generally advantageous
Exception: Products subject to fast technology
Obsolescence
(e.g., Computers, Video cameras)
Repaiability:
- Before GE sends a repair person, they try to fix it over the phone
- Cisco Systems eliminated 50,000 calls a month by posting solutions on its
Web Site to frequently asked questions (FAQ)
6.
Style
-Eye-catching or Yawn producing
Ex. Apple computers; Montblanc Pens, Godiva
chocolate, H-D, Arizona ice tea bottle
7. Design
- The totality of features that affect how the product looks &
performs.
Ex. Apple’s IMAC
- One button internet access
- No clunky tower or desktop hard drive
- No floppy disk drive
Global Trade:
- Italians: Apparel, Furniture
- Scandinavians: Design for functionality, aesthetics, environment
- e.g., Braun ( a division of Gillette), Shavers, Coffeemakers, Hair
dryers, Food processors
II. Services
1.
Ordering EASE
Ex. Internet Food Service Firms
Peapod
Streamline
Net Grocer
Cyber-meals
2.
Maintenance/Repair
Ex. Tandem computers
Makes parallel CPUs
Uses remote diagnostics to monitor & walks the customer over the
phone as to needed replacement parts & repair
3.
Misc.
Improved warranty or maintenance contract.
III. Personal Diff.
– McD’s: Courteous staff (Prior to 1995)
– IBM: Professionals
– Disney: Upbeat
Ex. GE, Frito-Lay, Cisco, Pfizer have excellent sales
staff
IV. Channel
Ex.
• Catepillar: Construction Equipment
• More dalers than its competitors & in good locations
• Well trained
• Dell & Avon
• Direct marketing channels
Lams Pet Food
– Ignored traditional channels (large chains) and went to
regional vets, breeders and pet stores
– Sales
1982
1996
16M
500M
V. IMAGE: Customer perception of product or co.
Ex. Nike: A shoe is an attribute
Airwalk: Extreme sports, Image to kids
Symbols:
•
•
•
•
•
•
•
Apple
Lion (Harris Bank)
Passion (E. Taylor)
Uninhibited (Cher)
Blue (IBM)
Yellow (Kodak)
Red (Campbell Soup)
Media: Chosen image has to be worked into Ads, news reports, brochures,
annual reports, bus. cards, etc
Atmosphere: Physical spaces occupied by a company
•
•
Hyatt Regency: Atrium lobbies
Bank Buildings must convey an image of safety
Events: Sponsorship
•
•
•
AT&T and IBM: sponsor symphony performance and art exhibits
Heinz gives money to hospitals
Kraft donates to MADD
Stages of Competitive Cycle
Market Share
Production Costs
Price Premium
Sole
Supplier
Competitive
Entry
Share
Stability
Commodity
Competition
Withdrawal