Target Marketing & Positioning

MKT 846

Professor West

Agenda

Finish Team Updates Discuss Targeting & PositioningNext time Tim Londergan from WBNS will join

us

Segmentation & Targeting

Trying to reach “everyone” with a marketing message costs money and sends unwanted messages to people who aren’t customers or prospects. It makes more sense to narrow the audience to people

who are most likely to buy the brand. Segmenting is used to identify these groups of

people. Targeting is the planning strategy for reaching and

communicating with them.

Steps in Segmentation & Targeting:

Identify your most profitable current customers Create profiles of these segments Target these segments to increase retention and

customer growth Use profitable-customer profiles to locate

prospective segments Evaluate prospective segments Target prospective segments that are likely to

respond favorably Continue testing responsiveness of prospective

segments

Step 1: How to determine LVC

Lifetime Value of the Customer Volume (spending) Voice Cost of servicing Potential for growth

RFM Model: Three critical variables:

Recency, Frequency, Monetary Value

The Customer Pyramid

Most Profitable

Least Profitable

PlatinumPlatinum

GoldGold

IronIron

LeadLead

Step 2: Profiling Segments

There are many bases for segmentation Behavior/Benefit Demographic/Geodemographics Psychographics & Lifestyle Relationship level Adopters

The objective is to create a useful description of segment that describes: Who are they? How can they most effectively be reached?

Why do they buy their brands of choice? How will they respond to our message?

Claritas – Prizm Segmentation

Segment Descriptions

VALS Psychographic segmentation

http://www.sric-bi.com/VALS/

Goal of Profiling

Selecting a Target Market

Measurable – Can we identify and quantify the segment?

Accessible – Can we reach this segment efficiently and effectively?

Substantial – Is there enough critical mass to be profitable?

Differential – Is this segment distinct from others? Actionable – Can we serve this segment? Do we

have the capacity and budget?

Moving on to Positioning

“This is the art and science of fitting the product or service to one or more segments in such a way to set is apart from competition”

“Positioning is how your product is perceived on the hearts and minds of consumers”

Many advertising practitioners consider this to be the most important factor in establishing the brand in the marketplace.

Positioning, the battle for your mind…

Trout & Ries suggest asking yourself the following questions: What position, if any, do you already have in the prospect’s mind?

(this most come from consumers not managers) What position do we want to own? What companies must be outgunned if we are to establish that

position? Do we have enough resources to occupy and hold the position? Do we have enough guts to stick with one consistent positioning

strategy? Does our creative approach match our positioning strategy?

Positioning Strategies

Product attributes & benefits

Price/Quality Use or Application Product Class Product User Competitor Cultural Symbol

Next Time…

Read Chapters 9 -11 Prepare questions for Tim Londergan

regarding targeting and media selection Begin the process of developing a positioning

strategy for your brand and communication objectives