Download - 10Segmentation,Positioing and , Forecasting
-
7/29/2019 10Segmentation,Positioing and , Forecasting
1/23
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
1
-
7/29/2019 10Segmentation,Positioing and , Forecasting
2/23
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
2
-
7/29/2019 10Segmentation,Positioing and , Forecasting
3/23
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.
3
-
7/29/2019 10Segmentation,Positioing and , Forecasting
4/23
The Concept of Market Segmentation
Markets consist of buyers who
differ in their:
Wants Resources (time and money)
Locations
Buying attitudes Buying behaviors
4
-
7/29/2019 10Segmentation,Positioing and , Forecasting
5/23
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.
5
-
7/29/2019 10Segmentation,Positioing and , Forecasting
6/23
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
6
-
7/29/2019 10Segmentation,Positioing and , Forecasting
7/23
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.
7
-
7/29/2019 10Segmentation,Positioing and , Forecasting
8/23
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.
8
-
7/29/2019 10Segmentation,Positioing and , Forecasting
9/23
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.
9
-
7/29/2019 10Segmentation,Positioing and , Forecasting
10/23
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.
10
-
7/29/2019 10Segmentation,Positioing and , Forecasting
11/23
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
11
-
7/29/2019 10Segmentation,Positioing and , Forecasting
12/23
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.
12
Positioning for the
Market Segment
-
7/29/2019 10Segmentation,Positioing and , Forecasting
13/23
Positioning Maps
Two dimensional graphs of
how a product, brand, or
company is perceived versus
the competition.
13
-
7/29/2019 10Segmentation,Positioing and , Forecasting
14/23
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.
14
-
7/29/2019 10Segmentation,Positioing and , Forecasting
15/23
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
15
-
7/29/2019 10Segmentation,Positioing and , Forecasting
16/23
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.
16
-
7/29/2019 10Segmentation,Positioing and , Forecasting
17/23
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.
17
-
7/29/2019 10Segmentation,Positioing and , Forecasting
18/23
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.
18
-
7/29/2019 10Segmentation,Positioing and , Forecasting
19/23
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.
19
-
7/29/2019 10Segmentation,Positioing and , Forecasting
20/23
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
-
7/29/2019 10Segmentation,Positioing and , Forecasting
21/23
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.
21
-
7/29/2019 10Segmentation,Positioing and , Forecasting
22/23
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
during a specified future time period. 22
-
7/29/2019 10Segmentation,Positioing and , Forecasting
23/23
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