10segmentation,positioing and , forecasting

7/29/2019 10Segmentation,Positioing and , Forecasting

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Chapter Goals

To gain an understanding of:

Segmenting markets from a lifestyle and product-

related perspective

Dealing with different numbers of market segments

Positioning the product, brand or firm to appeal to

segment(s)

Niche marketing and related approaches

Forecasting and determining market potential

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Target Markets

Is a group of customers, people or firms atwhom the seller specifically aims its marketingefforts

Represents a companys best marketopportunity

Requires an understanding of who they are,

why they buy and how they buy

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Guidelines in Target Market Selection

Target should be compatible with the

organizations goals and image.

Must be a match between the market

opportunity and the companys resources.

Target segments must offer potential for

profit.

Target market must offer the opportunity tocompete effectively.

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The Concept of Market Segmentation

Markets consist of buyers who

differ in their:

Wants Resources (time and money)

Locations

Buying attitudes Buying behaviors

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Market Segmentation

Is the process of dividing the total market into

distinct groups of buyers with different needs,

characteristics, or behavior and who might

require separate products or marketing mixes.

Remember different market segments are

motivated by different things and find

different appeals attractive.

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Target Market

Strategies

market aggregation: target the product or serviceto a mass market with little differentiation

single-segment segmentation: selecting a single

segment to target; if the segment is small, thismay be considered a niche strategy

multiple-segment segmentation: identifying two

or more segments as target markets; involves

developing a different marketing approach for

each

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Benefits of Market Segmentation

and Target Marketing

Helps sellers define their marketopportunities.

Helps develop the right product, price

structure, distribution channels andcommunication approach to reach the targetmarket efficiently.

Helps to focus the marketing efforts on thebuyers who have the greatest purchaseinterest.

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Bases for Market Segmentation -

Consumer and Business Users

Ultimate consumers or End Users: buy products

for their own personal or household use.

Business users: are individuals or firms who buy

products to use in their company or to make

other products.

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Bases for Segmenting

Consumer Markets

1.Geographic Segmentation: involves dividing a market

into different geographical units such as nations,

provinces, regions, countries, cities.

2.Demographic Segmentation: involves dividing themarket into groups based on variable such as age,

gender, family size, family life cycle, income,

occupation, education, religion, race and nationality.

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3. Psychographic Segmentation: involves

dividing buyers into different groups based on

social class, lifestyle, personality

characteristics.

4.Behavioral Segmentation: involves dividing

buyers into groups based on their knowledge,

attitude, uses or responses to a product.

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Implications of

Segmentation

market aggregation is really a production-oriented strategy; it requires that the firm find

some way to differentiate its product or service

increasingly, firms are turning to superiorserviceas their differentiating strategy

multiple-segment marketing requires that the

firm develop different versions of the productoffering for each segment; or it may simply

mean different approaches to serving segments

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Positioningis the image of your brand held by

the public and especially, your segment.

Usually try to position on attributes consumersees as important, such as speed, convenience,

safety.

Positioning Mapshelp see how key players in a

market are viewed by consumers. Helps to see

competitive clusters and market gaps.

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Positioning for the

Market Segment


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Positioning Maps

Two dimensional graphs of

how a product, brand, or

company is perceived versus

the competition.

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Three steps in developing a

positioning map

1. Evaluate the attributesimportant to consumers in thepurchase decision for a particular

product.2. Determine which two attributesare most important.

3. Rate competing brands orcompanies on these attributes.

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Niche Marketing

this is a specific form ofpositioning

the company decides to occupy a market niche

where it can be distinct and competition weak

identify segments that are not well served determine how to gain a competitive advantage

expand the niche by meeting consumer needs

defend the niche position by improving productand service offerings

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Positioning Strategies

Against Competition: Were as good or betterCola Wars, battery-bashers.

Market Gap: Find spot others missed.

Set Brand Apart: Stress your differences and avoidhead-to-head competition. Nothing runs like aDeere.

Leadership: Be the one others follow. Used by

Presidents Choice, Sony. Lifestyle Segment Appeals: Use lifestyle to define.

Some buy fancy cameras to take creativephotography, others to impress.

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Repositioning

This is a variation of a positioning strategy

that involves changing the marketposition of a brand or store in response to

changes taking place in the broader

market environment.

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The Sales Forecast

A sales forecast is an estimate of probable

sales for one companys brand of the

product during a stated time period in a

specific market segment and assuming the

use of a predetermined marketing plan.

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The Sales Forecast

It is based on a specific marketing plan.

It can be expressed in dollars or product units.

It is best prepared after market potential andsales potential have been estimated.

It typically covers a 1-year period.

Marketing goals and broad strategies must beestablished before a sales forecast is made.

Once it is made, it becomes a key controllingfactor in all operational planning throughout thecompany.

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Basic Forecasting Approaches

Top Down:Develops a forecast of economic conditions and industry

trends.

Determines the market potential for a product.

Determines the sales potential for the product.

Measures the share of this market the firm is currentlygetting or plans to capture.

Forecasts the firms sales of the product.

Bottom Up:

Generates estimates of future demand from customers orthe companys salespeople.

Combines the estimates to get a total forecast.

Adjusts the forecast based on managerial insights into the

industry, competition, and general economic trends. 20


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Demand Forecasting:

Key Terms

Market factor/index: Something that is related to theproduct you sell -- new home starts and appliances.

Market potential: Total volume by all firms in market.

Sales Potential: Your piece of market = your share.

Sales Forecast: Estimated sales during defined periodassuming certain marketing plan and environment.

The forecast allows firms to estimate future revenues

and becomes an important part of the planningprocess.

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Demand Forecasting

Methods

Market-factor analysis: Demand for a product isassumed to be related to the factor-- housing startsand appliances.

o Direct Derivation: See what determines sales--

roofing firms look for 15-year-old houses forbusiness.

o Correlation Analysis: Statistical analysis that showstwo things are linked-- perhaps pets in an area and

dog food sales. Survey of buyer intentions:A sample of current or

potential customers are asked how much of aparticular product they would buy at a given price

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More Forecasting

Methods

Test marketing: A firm markets its product in a limitedgeographic area, measures sales, and then projectsthe sales over a larger area.

Past sales and trend analysis: A flat percentage

increase is applied to the volume achieved last year orto the average volume of the past few years. Trendanalysis more sophisticated, uses more statisticalanalysis.

Salesforce composite: A bottom-up methodconsisting of collecting estimates of sales for thefuture period from all salespeople.

Executive judgement: Obtaining opinions regarding

future sales volume from one or more executives 23

10segmentation,positioing and , forecasting

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