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Transcript
Week 10 The Three Steps of Target Marketing: Market Segmentation, Targeting, and Positioning Introduction This week you are going to learn about the three steps of target marketing: 1. market segmentation 2. targeting 3. positioning Mr. P. Lemmon Market Segmentation Week 11-2 What is the Purpose of the Three Steps of Target Marketing? Say you want to sell a product. It is impossible to try to sell it to everybody. Unless you are a very big corporation, it is too much time, trouble and money to convince everyone that they must have your product. So, you divide the total market into segments. Then you zero in on those most likely to buy your product. Once you figure out this “target market”, you position your product so it stands out from all your competitors. Mr. P. Lemmon Market Segmentation Week 11-3 Three Steps Diagram Market Segmentation Step 1: Break the total market into segments Targeting Step 2: Determine which segment is most likely buy your product That segment Is your target market Mr. P. Lemmon Market Segmentation Positioning Step 3: Position your product for the target market Create the marketing mix for your product Week 11-4 Step 1: Market Segmentation Market Segmentation is dividing a market into distinct groups who might be interested in buying your product. What is a Market? PEOPLE Mr. P. Lemmon Market Segmentation Week 11-5 Why Divide the Market? • With a large country like Canada, there are many different types of people – – – – – Men and women Children, teens, adult, retirees Muslim, Catholic, Protestant French, English, Chinese, German, Jamaican Ontario, East Coast, West Coast, Prairies • It is too difficult to sell to everybody, that is why we divide the total market into segments. Mr. P. Lemmon Market Segmentation Week 11-6 Four Types of Market Segmentation Geographic 1. 2. 3. 4. Geographic Demographic Psychographic Behavioral Psychographic Lifestyle or Personality Mr. P. Lemmon Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ... Behavioral Occasions, Benefits, Uses, or Attitudes Market Segmentation Week 11-7 Geographic Segmentation • Based upon where people live Types of Geographic Segmentation World Region or Country Region of Country City or Metro Size Mr. P. Lemmon Market Segmentation Week 11-8 Geographic Examples The reason why we study geographic segmentation is because WHERE people live has a big effect on their consumption patterns. • For instance, if they live in the north vs. the south • • they are more likely to buy snowmobiles, scarves, toques, parkas, and snow blowers. If they live the country vs. the city they are more likely to purchase farm equipment, livestock, and tractors. If they live in Canada vs. France they are more likely to buy hockey sticks, Tim Horton’s coffee, and snowshoes. Mr. P. Lemmon Market Segmentation Week 11-9 Demographic Segmentation • Based on the characteristics of a group of people Types of Demographic Segmentation Age Gender Family Size Income Mr. P. Lemmon Market Segmentation Week 11-10 Gender (Male/Female) Gender is an obvious way to divide the market into segments since so many products are gender-specific. • clothing • sports • entertainment Mr. P. Lemmon Market Segmentation Week 11-11 Age Age is another obvious way to divide the market into segments since so many products are based upon “time of life” or lifecycle. 0-5 6-19 20-34 35-49 50-64 65+ 80+ Mr. P. Lemmon young children school children young adults younger middle-aged older middle-aged seniors SUPER seniors Market Segmentation Each age group will buy different products Week 11-12 P&G targets kids with Crest Kid’s Cavity Protection toothpaste. It’s gentle on tooth enamel and has “funfilled sparkles and sparkle fun flavor just for kids.” Mr. P. Lemmon Market Segmentation Week 11-13 Income • Identifies and targets the affluent for luxury goods. • People with low annual incomes can be a lucrative market. • Some manufacturers have different grades of products for different income markets. Mr. P. Lemmon Market Segmentation Week 11-14 Psychographic Segmentation •Based on psychological attributes and attitudes Types of Psychographics Self-Image Lifestyle Personality Mr. P. Lemmon Market Segmentation Week 11-15 Self-Image When Honda markets its Reflex and Elite scooters, it appeals to the rebellious, independent kid in all of us. Mr. P. Lemmon Market Segmentation Week 11-16 Life Style The following three advertisements are targeting an adventurous, healthy, outdoor life style. What product are they promoting? Why, cigarettes of course. Mr. P. Lemmon Market Segmentation Week 11-17 Personality Companies also target consumer by their personality. What products would you sell to the following personality types? Wolf—Beer Tiger—Outdoor adventure Beaver—Peace signs Sheep—All other products Mr. P. Lemmon Market Segmentation Week 11-18 Behavioral Segmentation •Based on the actions and buying patterns of consumers Types of Behaviors Benefits Sought Occasions Usage Rate Loyalty Status Mr. P. Lemmon Market Segmentation Week 11-19 • Benefits Sought: – Different segments desire different benefits from products. • (e.g., P&G’s multiple brands of laundry detergents to satisfy different needs in the product category) • Occasions: – Special promotions and labels for holidays. • (e.g., Hershey Kisses) – Special products for special occasions. • (e.g., Kodak disposable cameras) Mr. P. Lemmon Market Segmentation Week 11-20 • Loyalty Status: – Brands – Stores – Companies • Usage Rate: – Light – Medium – Heavy Mr. P. Lemmon Market Segmentation Week 11-21 Step 2: Targeting The target market is that segment that is most likely to buy your product. The target market is also known as the primary market. It is known as the target market because all of your promotion mix is aimed directly at that market segment. Promotion Mix Advertising Sales Promotion Personal Selling Publicity Mr. P. Lemmon Market Segmentation Week 11-22 Example of Targeting In marketing its Suave shampoo, Helene Curtis uses PRIZM to identify neighborhoods with high concentrations of working women. Such women respond best to advertising messages that with Suave, “looking great doesn’t have to cost a fortune.” Mr. P. Lemmon Market Segmentation Week 11-23 Step 3: Positioning • Positioning means showing your target market how your product is better than your competition’s product. • Another way of saying positioning is “demonstrating your competitive advantage.” • The competitive advantage can be found in one or more parts of our old friend the “marketing mix.” Mr. P. Lemmon Market Segmentation Week 11-24 Identifying Possible Competitive Advantages Product (e.g., consistency, durability, reliability, repairability) Price (eg. Everyday low prices, combos, supersizing) Marketing Mix Place (e.g., speed, convenience, careful delivery) Mr. P. Lemmon Promotion (e.g., better ads, charitable foundations) Market Segmentation Week 11-25 Example of Positioning MacDonald’s segments its markets by age. One of its target markets is kids from age 4-12. It uses the following marketing mix that is aimed directly at that segment. • Advertising – Ronald MacDonald, Hamburglar, Grimace • Sales Promotions – Toys • Personal Selling – Kid friendly counter staff • Publicity – Ronald MacDonald House Mr. P. Lemmon Market Segmentation Week 11-26 Example of Positioning Likewise, Burger King uses the following competitive advantages to position itself ahead of MacDonald’s for its target markets. • Product – Flamebroiled, onion rings, battered fries • Price – Cheaper combos • Promotions – Burger King character Mr. P. Lemmon Market Segmentation Week 11-27 What is the Position? At Olive Garden Restaurants, “When You’re Here, You’re Family.” Mr. P. Lemmon Market Segmentation Week 11-28 What is the Position? Unilever’s bestselling Lever 2000 soap. It’s good “for all of your 2000 parts.” Mr. P. Lemmon Market Segmentation Week 11-29 Conclusion After completing this week, you should be able to: Define the three steps of target marketing 1. Market segmentation 2. Targeting 3. Market positioning Mr. P. Lemmon Market Segmentation Week 11-30