6. segmentation, tarketing & positioning for competitive advantage

8/8/2019 6. Segmentation, Tarketing & Positioning for Competitive Advantage

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Segmentation, Targeting & Positioning

for Competitive Advantage

By Dr. Kevin Lance Jones


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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

appropriate market segments.

Evaluate and appraise the market segmentsresulting 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

positioning strategy 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 choosinga group of customer you can serve best is targeting.

So target a segmentation is core of the marketing process.


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Identify the Total Market

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 specificallydefine the total market of all potentialcustomers for a product category.


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Segmentation and Effectiveness

Objective 3


EffectiveEffective

SegmentationSegmentation






ControlControl


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Segmentation

Segmenting means dividing a heterogeneousdemanding markets into homogenous groupsbased on similar characteristics or traits

Heterogeneous demand- different groups ofcustomers have differing needs from specificproducts.

Homogeneous segment- the separation ofmarkets into distinctive groups based onhomogeneous characteristics.


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Criteria for

successful segmentation


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Criteria for


Clear differences

in consumerpreferences for a

product must

exist.


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Criteria for


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

purchasing powerto be profitable.

Criteria for



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Companies must

be able to respond

to difference

preferences with

an appropriate

marketing mix.

Criteria for



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The proposed

market segment

must be readilyaccessible and

reachable with

market programs.

Criteria for



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Determine Bases for Segmentation

Objective 3


EffectiveEffective SegmentationSegmentation






ControlControl


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Bases for Segmentation

To divide a market into segments, firms

use segmenting criterion that describethe characteristics of each part of the

market.


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Segmentation BaseSegmentation Base

SituationSituation


PsychographicPsychographic


GeographicGeographic


Behavior/UsageBehavior/Usage


DemographicDemographic


BenefitsBenefits--SoughtSought



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Social classSocial classSocial classSocial class

Income LevelIncome LevelIncome LevelIncome Level

EthnicEthnicEthnicEthnicEducationEducationEducationEducation

Life-cycleLife-cycle

Segmentation Base


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Segmentation BaseSegmentation BaseSegmentation BaseSegmentation Base

SituationSituation













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Segmentation Base

Localizes its marketing efforts to specific

geographic regions


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SituationSituation













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Segmentation Base

Grouping customers together based

on social class, lifestyles and

psychological characteristics(attitudes, interests and opinions)

Useful but more difficult to identify and

measure compared to demographicvariables


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SituationSituation













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Segmentation Base

Markets can be segmented

based on the benefits thatconsumers desire from using a

specific product


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SituationSituation













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Segmentation Base

Purchase situation or occasion

Physical surroundings

Social surroundings

Temporal perspective


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SituationSituation













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Light Users

80%

Light Users

80%Heavy Users

20%

Heavy Users

20%

Segmentation Base

Markets can be segmented by how often or howheavily consumers use a specific product Paretos Principle or80/20 Principle - 80% of revenue

generated by 20% of customers


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Segmentation Base

Information for segmentingmarkets may be obtained from

database such as Census, State

Statistics, AC

ORN


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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 differsgreatly from the household consumermarket.

The use of different segment variables, in

simple way, a Standard Industrialclassification is often employed


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Segmenting Business Markets

Segmentation variables used to segmentbusiness markets:

Size

Industry

Purchasing approaches

Product usage Situational factors (seasonal trend)

Geographic


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Select Segments for Targeting

Objective 3


Determine Need forDetermine Need for


Determine Bases forDetermine Bases for






ControlControl


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Targeting

Targeting: choose the specific segment toward

which a firm directs its market efforts.

Niche Marketing: the process of targeting a

small market segment with a specific,specialized marketing mix.

Micromarketing- the process of targeting smaller,

more narrowly defined market segments.

On the individual consumer end of the

continuum, a firm may decide to target individual

consumers and personalize marketing efforts

toward each.


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Target the Mass Market versus the

Individual Consumer

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 or

relationship goals


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Targeting Strategy

1.Undifferentiated marketing

2.Differentiated marketing

3.Concentrated marketing

4.Custom marketing


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Targeting Strategy

Undifferentiated targeting strategyUndifferentiated targeting strategy

Concentrated strategy

Differentiated strategy

Companies might

develop one

marketing mix

strategy that isappropriate for all

members of the

total market.


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Targeting Strategy

Undifferentiated targeting strategy

Concentrated strategyConcentrated strategy

Differentiated strategy

Only one marketing

mix is developed

and directed

toward a few, orperhaps one,

profitable market

segments.


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Targeting Strategy

Undifferentiated targeting strategy

Concentrated strategy

Differentiated strategyDifferentiated strategy

Exists when a firm

develops different

marketing mix

plans speciallytailored for each of

two or more market

segments.


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0

Alternative of Targeting Strategy

1. Single segment

2. Multi segment3. Product specialized

4. Market specialized

5. Full market coverage


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Select Positioning Strategy

Objective 3


EffectiveEffective


Determine Bases forDetermine Bases for


Targeting SegmentTargeting Segment




ControlControl


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Positioning

Positioning

Kotler defined: designing an

offer so that it occupies a

distinct and valued place in theminds of the target customer.


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Positioning

Positioning

Image that customers have about

a product in relation to the

products competitors


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Positioning Strategy

Key to developing the

appropriate marketing mix isthe 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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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 elevatethe consumers current product image to

the desired product image.


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Position Mapping- creating a

visual description about consumerperceptions of a product on two or

more dimensions in relation to

competitors.


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The positioning strategy must determinewhere a company wants to go

And how to get there by positioning the

product according to any of the following ways: Price/Quality

Product Attributes

Product User

Product Usage Product Class

Competition

Symbol


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Marketing Mix

Objective 3








ControlControl


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Marketing Mix

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 or7Ps of

its marketing mix as a tool to achieve thedesired position


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Recognize 4Ps and the 7Ps

Productcustomer value

Pricecost

Placeconvenience Promotioncommunication

Peopleconsideration

Processesco-ordination

Physical evidenceconfirmation

M k i S d h


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Marketing Strategy and the

Marketing Mix

Objective 4

ProductPlace

(Distribution)

Promotion Price

Marketing

Mix

M k ti St t d th


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Refers to goods, services, people, places

and ideas Household consumers

Business-to-business customers

Product


Marketing Mix

M k ti St t d th


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Marketing channel is the network of

organizations that create time, place

and ownership utilities for household

consumers and business customers.

Place

(Distribution)


Marketing Mix

M k ti St t d th


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Integrated Marketing Communication (IMC)

System of management and integration ofmarketing communication elements

Advertising, publicity, sales promotion,personal selling, sponsorship marketing, andpoint-of-purchase communications

Promotion


Marketing Mix

M k ti St t d th


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Pricing decisions are complex and are drivenby a variety of considerations including:

Customer demand, costs, information

availability, competition, profit motives,product considerations, and legalconsiderations

Price


Marketing Mix

6. segmentation, tarketing & positioning for competitive advantage

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