Master in Marketing and Communication. Module 7. Segmentation, Targeting, Differentiation and Positioning. Lecture 7- slide 1

Transcription

1 Master in Marketing and Communication Module 7 Segmentation, Targeting, Differentiation and Positioning. Lecture 7- slide 1

2 Customer-Driven Marketing Strategy: Creating Value for Target Customers Topic Outline Market Segmentation Market Targeting Differentiation and Positioning Lecture 7- slide 2

3 Creating Value for Targeted Customers Lecture 7- slide 3

4 Market Segmentation Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs Lecture 7- slide 4

5 Market Segmentation Segmenting consumer markets Segmenting business markets Segmenting international markets Requirements for effective segmentation Lecture 7- slide 5

6 Segmenting consumer markets Geographic Demographic Psychographic Behavioral Lecture 7- slide 6

7 Market Segmentation Segmenting Consumer Markets Geographic segmentationdivides the market into different geographical units such as nations, regions, states, counties, or cities Lecture 7- slide 7

8 Geographic segmentation Consumer Markets Lecture 7- slide 8

9 Geographic segmentation Consumer Markets Tesco Metro Tesco Express One Stop Lecture 7- slide 9

10 Market Segmentation Segmenting Consumer Markets Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality Lecture 7- slide 10

11 Market Segmentation Demographic segmentation Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups Gender segmentation divides the market based on sex (male or female) Income segmentation divides the market into affluent or low-income consumers Lecture 7- slide 11

12 Demographic Segmentation Lecture 7- slide 12

13 Market Segmentation Segmenting Consumer Markets Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits Lecture 7- slide 13

14 Market Segmentation Segmenting Consumer Markets Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product Occasions Benefits sought User status Usage rate Loyalty status Lecture 7- slide 14

15 Occasion Segmentation Lecture 7- slide 15

16 Psycographic and Behavioural segmentation Lecture 7- slide 16

17 Market Segmentation Using Multiple Segmentation Bases Multiple segmentation is used to identify smaller, better-defined target groups Geodemographic segmentationis an example of multivariable segmentation that divides groups into consumer lifestyle patterns Lecture 7- slide 17

18 Market Segmentation Using Multiple Segmentation Bases PRIZM NE classifies every American household into 66 unique segments organized into 14 different social groups. These groups segment people and locations into marketable groups of like-minded consumers that exhibit unique characteristics and buying behavior based on a host of demographic factors Lecture 7- slide 18

19 Calvin Klein uses several layers of segmentation Lecture 7- slide 19

20 Primary segmentation variables for business markets Demographics: industry, company, location. Operating variables:technology, user/non user status. Purchasing approaches:purchasing function organisation, power structure, nature of existing relationships, general purchase policies, purchasing criteria. Situational factors:urgency, specific application, size of order. Personal characteristics:buyer-seller similarity, attitudes towards risk, loyalty. Lecture 7- slide 20

21 Primary segmentation variables for business markets Source: Adapted from Thomas V. Bonoma and Benson P. Shapiro, Segmenting the Industrial Market (Lexington, MA: Lexington Books, 1983); see also John Berrigan and Carl Finkbeiner, Segmentation Marketing: New methods for capturing business (New York: Harper Business, 1992). Lecture 7- slide 21

22 Primary segmentation variables for business markets Source: Adapted from Thomas V. Bonoma and Benson P. Shapiro, Segmenting the Industrial Market (Lexington, MA: Lexington Books, 1983); see also John Berrigan and Carl Finkbeiner, Segmentation Marketing: New methods for capturing business (New York: Harper Business, 1992). Lecture 7- slide 22

23 Market Segmentation Segmenting International markets Geographic location Economic factors Politicallegal factors Cultural factors Lecture 7- slide 23

24 Market Segmentation Segmenting Business Markets Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries Lecture 7- slide 24

25 Developing market segments Research based exercise that incorporates several stages: Qualitative research: Exploratory techniques to determine motivations and attitudes. Quantitative research: Structured questionnaire to gain information. Analysis: Factor and cluster analysis. Automatic Interaction Detection and conjoint analysis. Validation: Statistical validation. Profiling: Distinguishing attitudes and behaviours. Lecture 7- slide 25

26 Market Segmentation Requirements for Effective Segmentation To be useful, market segments must be: Measurable Accessible Substantial Differentiable Actionable Lecture 7- slide 26

27 Requirements for effective segmentation Measurability Degree to which size, purchasing power and profits of a market segment can be measured. Accessibility Degree to which a market segment can be reached and served. Substantiality Degree to which a market segment is sufficiently large or profitable. Actionability Degree to which effective programmes can be designed for attracting and serving the given market segment. Lecture 7- slide 27

28 What is market targeting? Market targeting involves evaluating the various segments identified during the segmentation process and deciding how many and which segments it can serve best. Lecture 7- slide 28

29 Market Targeting Selecting Target Market Segments Target marketconsists of a set of buyers who share common needs or characteristics that the company decides to serve Lecture 7- slide 29

30 Market Targeting Evaluating Market Segments Segment Size and Growth Analyze sales, growth rates and expected profitability. Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and the Power of Buyers & Suppliers. Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages. Lecture 7- slide 30

31 Target marketing strategies Undifferentiated (or Mass) marketing Differentiated (or Segment) marketing Concentrated (or Niche) marketing Micromarketing Lecture 7- slide 31

32 Target marketing strategies Undifferentiated (or Mass) marketing:assumes market is homogenous and uses the same product, promotion and distribution to all consumers. Differentiated (or Segment) marketing:adapting a company s offerings so they more closely match the needs of one or more segments. Concentrated (or Niche) marketing:adapting a company s offerings to match the needs of one or more sub-segments more closely where there is little competition. Micromarketing:Marketing programmes tailored to narrowly defined geographic, demographic, psychographic behavioural segments. Lecture 7- slide 32

33 Micro marketing Local Marketing Tailoring brands and promotions to the needs and wants of local customer groups. Individual marketing Tailoring products and marketing programmes to the needs and preferences of individual customers. Mass customisation Preparing individually designed products and communication on a large scale. Lecture 7- slide 33

34 Marketing Differenziato Colgate identifica diversi segmentitarget offrendo loro diversi tipi di dentifricio Lecture 7- slide 34

35 Marketing Concentrato (o di Nicchia) Morgan Cars serve una nicchia di mercato, producendomacchine sportive tradizionali fatte a mano per baby boomers Lecture 7- slide 35

36 Marketing individuale Lecture 7- slide 36

37 Market Targeting Target Marketing Strategies Undifferentiatedmarketing targets the whole market with one offer Mass marketing Focuses on common needs rather than what s different Lecture 7- slide 37

38 Market Targeting Target Marketing Strategies Differentiated marketing targets several different market segments and designs separate offers for each Goal is to achieve higher sales and stronger position More expensive than undifferentiated marketing Lecture 7- slide 38

39 Concentrated marketing targets a small share of a large market Market Targeting Limited company resources Knowledge of the market Target Market Strategies More effective and efficient Lecture 7- slide 39

40 Marketing Targeting Target Market Strategies Micromarketingis the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations Local marketing Individual marketing Lecture 7- slide 40

41 Market Targeting Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups Cities Neighborhoods Stores Target Market Strategies Lecture 7- slide 41

42 Market Targeting Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers Also known as: One-to-one marketing Mass customization Markets-of-one marketing Target Market Strategies Lecture 7- slide 42

43 Market Targeting Choosing a Target Market Depends on: Company resources Product variability Product life-cycle stage Market variability Competitor s marketing strategies Lecture 7- slide 43

44 Market Targeting Benefits customers with specific needs Concern for vulnerable segments Children Socially Responsible Target Marketing Alcohol Cigarettes Internet abuses Lecture 7- slide 44

45 Differentiation The company must also decide how it will serve targeted customers -how it will differentiateitself in the marketplace. The company must decide on a value proposition,the set of benefits or values it promises to deliver to consumers to satisfy their needs. Value propositions differentiate one brand from another and answer the question, Why should I buy your brand rather than a competitor s? Lecture 7- slide 45

46 Differentiation and Positioning Selecting an Overall Positioning Strategy Value proposition is the full mix of benefits upon which a brand is positioned Lecture 7- slide 46

47 Differentiation and Positioning Product position is the way the product is defined by consumers on important attributes the place the product occupies in consumers minds relative to competing products Perceptions Impressions Feelings Lecture 7- slide 47

48 Differentiation and Positioning Positioningmeans arranging for a product to occupy a clear, distinctive and desirable place in customers minds, relative to competition. Lecture 7- slide 48

49 Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Identifying a set of possible competitive advantages to build a position Choosing the right competitive advantages Selecting an overall positioning strategy Developing a positioning statement Lecture 7- slide 49

50 Differentiation and Positioning Identifying Possible Value Differences and Competitive Advantages Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices Lecture 7- slide 50

51 Sources of differentiation Product Services Channels People Image Lecture 7- slide 51

52 Differentiating markets (1) Product differentiation Features and benefits Quality Performance Innovation Consistency Reliability Style and design Durability Repairability Lecture 7- slide 52

53 Differentiating markets (2) Services differentiation Delivery Installation Repair services Customer training services Consulting services Speed of service Lecture 7- slide 53

54 Differentiating markets (3) People differentiation Hiring Training Customer focused Image differentiation Images that reflect the soul or ethos of the company Lecture 7- slide 54

55 Positioning strategies (1) Product attributes Nokia s 6600 Zoom in. Technical items BMW breathable fresh air filters. Benefits offered Crest toothpaste reduces cavities. Usage occasions Kit Kat, have a break. Users Johnson & Johnson changing focus to incorporate adults as frequent users of their gentle Baby Shampoo. Activities Omega, the first and only watch on the moon. Personalities Tiger Woods for Nike Lecture 7- slide 55

56 Positioning strategies (2) Cult positioning Harry Potter books. Origin Perrier bottled at source. Positioned with synergistic products and brands Bentley and Breitling. Positioned against competitors Dell and Compaq versus IBM Positioned away from competitors 7-Up the number 1 Un-cola. Product class membership I can t believe it s not butter, the vegetable fat spread, is clearly positioned against butter. Lecture 7- slide 56

57 Differentiation and Positioning Choosing the Right Competitive Advantage Difference to promote should be: Important Distinctive Superior Communicable Preemptive Affordable Profitable Lecture 7- slide 57

58 Criteria for choosing which differences to promote Features and benefits must beimportantto the consumer. Must be distinctive from the competition. Must deliver superior quality or service. Difference must be communicableand visible to buyers. Pre-emptive and competitors unable to replicate. Affordable: buyers can afford to pay for the difference. Profitable: the company can introduce the difference profitably. Lecture 7- slide 58

59 Choosing and implementing a positioning strategy USP ESP Lecture 7- slide 59

60 Choosing and implementing a positioning strategy Ad man Rosser Reeves states that every company should have a unique selling proposition (USP). The USP is the unique product benefit that a firm aggressively promotes in a consistent manner to its target market. The benefit usually reflects functional superiority: best quality, best services, lowest price, most advanced technology. Difficulty of maintaining functional superiority forces firms to attempt a more emotional influence by developing an emotional selling proposition (ESP). Lecture 7- slide 60

61 Factual approach Lecture 7- slide 61

62 Emotional approach Lecture 7- slide 62

63 Positioning Map Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions Lecture 7- slide 63

64 Positioning map Chocolate Market in the UK Lecture 7- slide 64

65 Positioning map - car brands Lecture 7- slide 65

66 Positioning Statement To (target segment and need) our (brand) is (concept) that (point of difference) Web link Lecture 7- slide 66

67 Mountain Dew s positioning statement To young, active soft-drink consumers who have little time to sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine. Lecture 7- slide 67

68 Communication and Delivering the Chosen Position Choosing the positioning is often easier than implementing the position. Lecture 7- slide 68