chapter 4 marketing segmentation, target marketing & positioning
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Chapter 4Marketing Segmentation, Target Marketing & Positioning
Market Strategy
Primary role of placing the firm in an optimal position with respect to customer needs.
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Market Segmentation
Decisions related to targeting the entire market for a product or one or more segments of the total marketThis information to make these decisions should come from the “situation analysis” specifically the analysis of the customer environment!
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Market Segmentation
Traditional approaches to market segmentation include: – mass marketing – differentiated marketing– niche marketing
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What are some of the key benefits of market segmentation?
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Mass Marketing...Aimed at the total market for a particular product– undifferentiated marketing– assumes all customers have similar needs– single marketing mix
• 1 product @ 1 price• 1 promotional program• 1 distribution system
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What products are mass marketed?
For example...
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Differentiated Marketing
Dividing the total market into groups common needs & attempting to develop a marketing mix that appeals to 1 or more of these groupsMay be necessary when needs are similar within a group, but differ across groupsInvolves two options:– multisegment approach– market concentration approach
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What products are mass marketed?
...
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Niche Marketing...
Narrow the market concentration approach even more– focus on a small market– segment has a unique, specific set of needs
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COPYRIGHT © 2002 Thomson Learning, Inc. All rights reserved.
Individualized Approaches to Market Segmentation
Resulting from advances in technology (communications & the Internet)Occur as companies are able to track customersAllow firms to combine demographic data with information on past & current purchasing behavior (marketing mix variables can match customer’s needs, wants & preferences)
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One-to-One Marketing
Involves the creation of an entirely unique marketing mix for each customer in the target segmentMore common in business than consumer marketingHowever, a fast growing approach in luxury & custom-made products
as well as services
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Mass Customization
Provides unique products & solutions to individual customers on a mass scaleIs more cost effective and practical because of advances in supply chain management, just-in-time inventory control & electronic data exhangeOften is used in business marketing
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Permission Marketing
A one-to-one technique whereby customers give companies permission to specifically target them in their marketing effortsIs commonly executed through opt-in e-mail lists, where a customer gives permission to send e-mails regarding products & servicesCustomers who opt-in are already interested in the goods & services
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Consumer Needs vs. Wants...
What is the difference between needs & wants?Are most products & services marketed to consumers based on needs or wants?
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Three general categories that can be used to divide markets-
state of being segmentation– using demographic factors (age, gender, income &
education)
state of mind segmentation– deals with how consumers think & feel
benefits sought– wants
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The Role of Differentiation & Positioning
Involves the development & maintenance of a relative perception for a product in customers’ minds– the goal is to create a favorable image versus all
competing products
Perceptions are fundamentally based on brand image & experienceRequires attention to product descriptions, customer support services & image
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Product Features Advantages Benefits
Dell Inspiron 5000e laptop computer
850-MHz Pentium III Blazingly fast Applications run faster
Weighs 6.75 lb Lightweight Greater mobility
Pontiac Gran Prix GTP automobile
240-HP engine Speed and Power Better self-image
WideTrack design Excellent handling Safety
Fun to drive
Crest MultiCare Advanced Cleaning Toothpaste
Dissolving micro-cleansing crystals
Teeth stay cleaner longer
Fresher breath
Bounty Extra Paper Towels
20% larger sheets Superior absorbency Handles bigger messes
More sheets per roll Won’t run out as often Fewer buying trips
USING PRODUCT DESCRIPTORS TO DIFFERENTIATE AND POSITION A PRODUCT
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Considerations in Business Marketing
Requires an understanding of:– the role of the buying center– the nature of hard & soft costs– reciprocity– mutual dependence
Must build client relationshipsRequires a firm to closely align their buying & selling operations to identify & remove an inefficiencies in the process
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