ing Research and Planning research: basic concepts and methods April 26, 2007 1 2 3 5 Selfactualization (self-development and and realization) 4 Esteem needs (self-esteem, recognition) Social needs (sense of of belonging, love) Safety needs (security, protection) Phisiological needs (food, water, shelter) Significant differences between brands Few differences between brands Four Types of Buying High Involvement Complex Buying Dissonance- Reducing Buying Low Involvement Variety- Seeking Habitual Buying Consumer Buying Process Problem recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior Decision Making s Steps Between Evaluation of Alternatives and a Purchase Decision Total Awareness Consideration Choice Decision Evaluation of alternatives Attitude of others Purchase intention Purchase decision Unanticipated situational factors 1
Product How Customers Use or Dispose of Products Get rid of it temporarily Get rid of it permanently Keep it Rent it Loan it Use for original purpose Convert to new purpose Store it Give it away Trade it Sell it Throw it away To be (re)sold To be used Direct to consumer Through middleman To intermediary Assessing the attractiveness of the opportunity Competitive Intensity How many competitors Strengths and weaknesses Customer Dynamics Level of unmet needs or magnitude of opportunity Interaction between customer segments Likely rate of growth Technology vulnerability Penetration of enabling technologies Impact of new technologies on value proposition Microeconomics Size of opportunity, profitability Effectiveness of Different Segmentation Methods Segmentation Methods Segmentation Criteria Clickthroughbased Demographic Geographic Needs-based Meaningful Actionable Online Manifested Needs Types of Needs and Tools to Surface Them Standard Tools New Tools Survey Focus Group Interview Observation ZMET Actionable Offline Latent Needs Substantial Tool highly surfaces need Measurable = Low = High Tool moderately surfaces need Tool does not surface need ZMET= Zaltman Metaphoric Elicitation Technique, pg 38 Five Forces Determining Segment Structural Attractiveness Suppliers (Supplier power) Potential Entrants (Threat of Mobility) Industry Competitors (Segment rivalry) Buyers (Buyer power) Objectives Identifying Segments Choosing Target s Substitutes (Threats of substitutes) 2
Steps in Segmentation, Targeting,and Positioning Segmentation 1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments Targeting 3. Evaluate attractiveness of each segment 4. Select the target segment(s) Positioning 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept Basic -Preference Patterns (a) Homogeneous preferences Creaminess Sweetness Creaminess (b) Diffused preferences Sweetness Creaminess (c) Clustered preferences Sweetness -Segmentation Procedure Survey Motivations Attitudes Analysis Factors Clusters Profiling Bases for Segmenting Consumer s Geographic Region, City or Metro Size, Density, Climate Psychographic Lifestyle or Personality Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income... al Occasions, Benefits, Uses, or Attitudes Bases for Segmenting Business s Demographic Operating Variables Purchasing Approaches Situational Factors Personal Characteristics Effective Segmentation Measurable Substantial Accessible Differential Size, purchasing power, profiles of segments can be measured. Segments must be large or profitable enough to serve. Segments can be effectively reached and served. Segments must respond differently to different marketing mix elements & actions. Actionable Must be able to attract and serve the segments. 3
Heavy and Light Users of Common Consumer Products PRODUCT (% USERS) HEAVY HALF LIGHT HALF Soups and detergents (94%) 75% 25% Toilet tissue (95%) Shampoo (94%) Paper towels (90%) Cake mix (74%) Cola (67%) Beer (41%) Dog food (30%) Bourbon (20%) 71% 29% 79% 21% 75% 25% 83% 83% 87% 81% 95% 17% 17% 13% 19% 5% Additional Segmentation Criteria Ethical Choice of Targets Segment Interrelationships & Supersegments Segment-by-Segment Invasion Plans Intersegment Cooperation Five Patterns of Target Selection Single-segment concentration M1 M2 M3 Selective specialization M1 M2 M3 Product specialization M1 M2 M3 Full market specialization coverage M1 M2 M3 M1 M2 M3 P = Product M = Product Varieties Segment-by-Segment Invasion Plan Large computers Mid-size computers Personal computers Company A Airlines Customer Groups Railroads Company B Truckers Company C The BCG Competitive Advantage Matrix Size of the Advantage Large Small Number of Approaches to Achieve Advantage Few Volume Stalemated Many Specialized Fragmented Product Differentiation Form Durability Reliability Repairability Quality Style Features Performance Conformance Quality Design 4
Services Differentiation Differentiation Ordering Ease Delivery Installation Customer Training Customer Consulting Maintenance & Repair Miscellaneous Services Personnel Channel Image Differentiation Important Media Atmosphere Profitable Distinctive Symbols Events Affordable Differences Worth Establishing Preemptive Superior Positioning is the act of designing the company s offering and image to occupy a distinctive place in the the target market s mind. P 298 Perceptual Map Exercise Fun rides Disneyland Live shows Easy to reach Good food Fantasy Knott s Berry Farm -1.6-1.4-1.2-1.0-0.8-0.6-0.4-0.2-0.2 Magic Mountain -0.4-0.6-0.8 1.0 0.8 Little waiting Educational, 0.6 animals 0.4 Marineland of the Japanese Pacific 0.2 Deer Park 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Busch Gardens Economical Lion Country Safari 5
Sales & profits ($) Sales & Profit Life Cycles Introduction Growth Time Maturity Decline Price Four Introductory ing Strategies High Low Promotion High Low Slow- penetration Slow- skimming Rapid- skimming Rapid- penetration Maturity Stage Modification Product Modification ing-mix Modification Decline Stage Increase investment Resolve uncertainties - stable investment Selective niches Harvesting Divesting Evolution Emergence Growth Maturity Decline -Fragmentation and -Consolidation Strategies (a) -fragmentation stage J H C XYZ DE AB (b) -consolidation stage JK H X DE C YZ AB M K L FG M L FG 6