Post on 30-Dec-2015
Select base for segmentation and identify appropriate market segments e.g. groups, individuals, organiztions.
Evaluate and appraise the market segments resulting from the first step.
Select an overall market targeting strategy and specific target segments.
Tailoring a distinct position in selected markets Developing marketing mixes that serve desired
positioning strategy in the marketplace Auditing marketing environments and efforts
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The focus of a successful marketing program is the customer. Effectively marketing must fully understand the needs.
Customers with decent life and individualism have Heterogeneous demands, This has given rise to need segmenting.
The process of understanding the customer and choosing a group of customer you can serve best is targeting.
So target a segmentation is core of the marketing process.
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Objective 3
Identify Total MarketIdentify Total Market
Effective SegmentationEffective Segmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate and Monitor, Evaluate and ControlControl
The first step in the target market selection process is to specifically define the total market of all potential customers for a product category.
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Segmenting means dividing a heterogeneous demanding markets into homogenous groups based on similar characteristics or traits
Heterogeneous demand- different groups of customers have differing needs from specific products.
Homogeneous segment- the separation of markets into distinctive groups based on homogeneous characteristics.
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•Difference preferences for a product must be identifiable and capable of being related to measurable variables.
Measurable Identifiable
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•The proposed market segment must have enough size and purchasing power to be profitable.
Substantial
Criteria for successful segmentation
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•Companies must be able to respond to difference preferences with an appropriate marketing mix.
Actionable
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•The proposed market segment must be readily accessible and reachable with market programs.
Accessible
To divide a market into segments, firms use segmenting criterion that describe the characteristics of each part of the market.
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
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Life-cycleLife-cycle
Social classSocial classSocial classSocial class
Income LevelIncome LevelIncome LevelIncome Level
EthnicEthnicEthnicEthnicEducationEducationEducationEducation
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
Grouping customers together based on social class, lifestyles and psychological characteristics (attitudes, interests and opinions)
Useful but more difficult to identify and measure compared to demographic variables
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
Markets can be segmented based on the benefits that consumers desire from using a specific product
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
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Situation Situation SegmentationSegmentation
Psychographic Psychographic
SegmentationSegmentation
Geographic Geographic SegmentationSegmentation
Behavior/UsageBehavior/Usage SegmentationSegmentation
Demographic Demographic SegmentationSegmentation
Benefits-SoughtBenefits-Sought SegmentationSegmentation
Markets can be segmented by how often or how heavily consumers use a specific product Pareto’s Principle or 80/20 Principle - 80% of
revenue generated by 20% of customers
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Light Users
80%
Light Users
80%Heavy Users
20%
Heavy Users
20%
Information for segmenting markets may be obtained from database such as Census, State Statistics etc.
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While the steps in the target market selection process are essentially the same for business markets, there are three major differences:
The purchasing process, which differs greatly from the household consumer market.
The use of different segment variables, in simple way, a Standard Industrial classification is often employed
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Segmentation variables used to segment business markets:
Size Industry Purchasing approaches Product usage Situational factors (seasonal trend) Geographic
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Targeting: choose the specific segment toward which a firm directs its market efforts.
Niche Marketing: the process of targeting a small market segment with a specific, specialized marketing mix (not core products on offer).
Micromarketing- the process of targeting smaller, more narrowly defined market segments.
On the individual consumer end of the continuum, a firm may decide to target individual consumers and personalize marketing efforts toward each.
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Can effectively serve all the segments, must target marketing efforts to a segment or segments.
Marketing opportunities and unfilled ‘gaps ’ are more accurately identified
Marketing mix is more delicately meet toe potential customer’s needs
Offer the greatest potential to achieve profit or relationship goals
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1.Undifferentiated marketing
2.Differentiated marketing
3.Concentrated marketing
4.Custom marketing
Companies might develop one marketing mix strategy that is appropriate for all members of the total market.
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Undifferentiated targeting Undifferentiated targeting strategystrategy
Concentrated strategy
Differentiated strategy
Only one marketing mix is developed and directed toward a few, or perhaps one, profitable market segments.
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Undifferentiated targeting strategy
Concentrated strategyConcentrated strategy
Differentiated strategy
Exists when a firm develops different marketing mix plans specially tailored for each of two or more market segments.
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Undifferentiated targeting strategy
Concentrated strategy
Differentiated strategyDifferentiated strategy
Positioning
Kotler defined: “designing an offer so that it occupies a distinct and valued place in the minds of the target customer.”
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Effective positioning What consumers currently think about
the product, especially in relation to competing products
What the marketer wants consumers to think about the product
Which positioning strategy will elevate the consumers’ current product image to the desired product image.
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Position Mapping also called as perceptual mapping- creating a visual description about consumer perceptions of a product on two or more dimensions in relation to competitors.
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The positioning strategy must determine where a company wants to go
And how to get there by positioning the product according to any of the following ways:
Price/Quality Product Attributes Product User Product Usage Product Class Competition Symbol
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Objective 3
Identify Total MarketIdentify Total Market
SegmentationSegmentation
Bases for SegmentationBases for Segmentation
Select Target SegmentSelect Target Segment
Positioning StrategyPositioning Strategy
Marketing MixMarketing Mix
Monitor, Evaluate and Monitor, Evaluate and ControlControl
The final steps are to develop and a marketing mix matched to the needs of the target market
This must support the chosen positional strategy in the selected target markets
Therefore determine the ‘4Ps ’ or “7Ps” of its marketing mix as a tool to achieve the desired position
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Productcustomer value Pricecost Placeconvenience Promotioncommunication Peopleconsideration Processesco-ordination Physical evidenceconfirmation
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Refers to goods, services, people, places and ideas
Household consumers Business-to-business customers
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Product
Marketing channel is the network of organizations that create time, place and ownership utilities for household consumers and business customers.
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Place
(Distribution)
Integrated Marketing Communication (IMC)
System of management and integration of marketing communication elements
Advertising, publicity, sales promotion, personal selling, sponsorship marketing, and point-of-purchase communications
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Promotion