Post on 01-Jan-2016
description
The process of segmenting and targeting connects marketing actions to Identification of marketing needs
Identify MarketNeeds
ExecuteMarketingProgram
Steps in Segmenting & Target Markets•Form prospective buyers into segments•Form products to be sold into groups•Develop a market-product grid and Estimate size of markets•Select target markets•Take marketing actions to reach target markets
Market product grid showing Reebok reaches customers with different needs
GENERALGROUP W/
NEEDRUNNING
(1981)AEROBIC
(1982)TENNIS (1984)
BASKETBALL (1984)
CHILDREN'S (1984)
WALKING (1986)
CROSS-TRAINERS
(1988)STEP-TRAINERS
(1991)
Runners P PAerobic Dancers P P
Tennis Players P PBasketball Players P P
Step Exercisers S PComfort & Style Conscious S S S S S S
Walkers S S S S P P
Children P
Perfo
rman
ce-c
onsc
ious
co
nsum
ers
(ath
lete
s)
Fash
ion-
cons
ciou
s co
nsum
ers
(non
athl
etes
)
Key: P = Primary Market; S = Secondary Market
MARKET SEGMENT PRODUCT (Kind of Shoes)
Advertising actions to reach specific student segments
Markets Lunch
Between Meal
Snacks Dinner
After-Dinner Snacks
Dormitory Students S L 0 LApartment Students L L S SDay Commuter Students L M S ONight Commuter Students 0 S L M
PRODUCTS: MEALS
Ads in buses: flyers under windshield wipers of cars in parking lots
Ad campaign: “Ten percent off all purchases between 2-4:30PM during winter quarter
Ad on flyer under windshield wipers of cars in night parking lots: “Free Frosty with this coupon when you buy a hamburger with fries.
Selecting a target market for your fast-food restaurant next to metropolitan college. Target market is shaded.
Markets Breakfast Lunch
Between Meal
Snacks Dinner
After-Dinner Snacks
STUDENTSDormitory 0 S L 0 LApartment S L L S SDay Commuter 0 L M S ONight Commuter 0 0 S L M
NON-STUDENTSFaculty or staff 0 L S S 0Live in area 0 S M M SWork in area S L 0 S 0
Key: L, Large Market; M, Medium Market; S, Small Market; 0, No Market
PRODUCTS: MEALS
Market-product grid showing size of markets for pillows for three different segments of sleepers
MARKETSOFT
PILLOWMEDIUM PILLOW
FIRM PILLOW
Stomache Sleepers L M SBack Sleepers M L MSide Sleepers S M L
Key: L, Large Market; M, Medium Market; S, Small Market
Market Segmentation
1. Def. Classification of prospective buyers into homogeneous groups from the twofold perspective of:
a) Common needs
b) Common response to marketing actions
2. Classification of Consumer Markets
a) Homogeneous
b) Diffused
c) Clusters
3. Criteria for Segmenting Consumer Markets
a) Geographic
b) Demographic
c) Psychological
d) Behavioral
- Occasions
- Benefits sought
e) User Status
f) Usage Rate
g) Loyalty Status
h) Attitude
4. Market Coverage Strategies
a) Undifferentiated Marketing
b) Differentiated Marketing
c) Concentrated Marketing
5. Seven Criteria For Selecting A Marketing Strategy
a) Company Resources
b) Product Homogeneity
c) Product Stage in Life Cycle
d) Market Homogeneity
e) Competitive Marketing Strategies
f) Feasibility of Marketing Programs
g) Profits
PositioningDef. All of the organization’s actions associated with
designing a product and creating an image so that it occupies a unique place in the customer’s mind, vis-à-vis competitive products. Should be sustained and profitable.
Six Positioning Strategies:1) Attribute2) Use3) User4) Product Class5) Competitors6) Price and Quality
Attribute SegmentationToothpaste Marketing Segments
ATTRIBUTES ChildrenTeens-Young
Adults Family Adults
Flavor XColor XWhiteness XFresh Breath XDecay Prevention XPlaque Removal XStain Removal XGingivitis X XPrice X
Brands Aim, Stripe
Ultra Brite, McCleans, Pearl
Drops, RembrandtColgate, Crest,
Total
Topol, Mentadent, Total,
Rembrandt
Branding1. Five Options:
a) Multi-Product Branding
b) Multi-Mix Branding
c) Multi-Branding
d) Private-Branding
e) Co-Branding
2. Growth Strategies
a) Line Extensions
b) Brand Extension
c) Flanker Brand Extension
d) Fighting Brand
Product DifferentiationProduct Services Personnel Channel• Insert Ordering Ease Competence Coverage
• Features Delivery Courtesy Expertise
• Performance Installation Credibility Performance
• Durability Customer Training Reliability
• Reliability Customer Consulting Responsiveness
• Repairability Maintenance/Repair Communication
• Style Misc.
• Design IMAGE
• Symbols
• Media
• Atmosphere
• Events
I. Product1. Form: Size, Shape, Physical structure of product.
Ex. Aspirin; Dosage, Size, Shape, Coating, Action time, Etc.2. Features:
-Co. Cost vs. Customer Value- Bundles or packages vs. Simple Add-Ons
3. Quality- SPI finds: ROI = +f(quality)- Promotes customer loyalty
Ex: Schlltz: increase SR cut aging time,used less expensive hopsResult: SR ¶ increases, Stock price increases, but LR market share decreases &
so did ¶ & stock prices4. Durability:
Generally advantageousException: Products subject to fast technologyObsolescence (e.g., Computers, Video cameras)
5. Repaiability:- Before GE sends a repair person, they try to fix it over the phone- Cisco Systems eliminated 50,000 calls a month by posting solutions
on its Web Site to frequently asked questions (FAQ)
6. Style-Eye-catching or Yawn producing
Ex. Apple computers; Montblanc Pens, Godiva chocolate, H-D, Arizona ice tea bottle
7. Design- The totality of features that affect how the product looks &
performs.Ex. Apple’s IMAC
- One button internet access- No clunky tower or desktop hard drive- No floppy disk drive
Global Trade:- Italians: Apparel, Furniture- Scandinavians: Design for functionality, aesthetics, environment- e.g., Braun ( a division of Gillette), Shavers, Coffeemakers, Hair
dryers, Food processors
II. Services
1. Ordering EASEEx. Internet Food Service Firms
Peapod
Streamline
Net Grocer
Cyber-meals
2. Maintenance/Repair
Ex. Tandem computers
Makes parallel CPUs
Uses remote diagnostics to monitor & walks the customer over the phone as to needed replacement parts & repair
3. Misc.Improved warranty or maintenance contract.
III. Personal Diff.
– McD’s: Courteous staff (Prior to 1995)– IBM: Professionals– Disney: Upbeat
Ex. GE, Frito-Lay, Cisco, Pfizer have excellent sales staff
IV. ChannelEx. • Catepillar: Construction Equipment
• More dalers than its competitors & in good locations• Well trained
• Dell & Avon• Direct marketing channels
Lams Pet Food– Ignored traditional channels (large chains) and went to
regional vets, breeders and pet stores– Sales 1982 1996
16M 500M
V. IMAGE: Customer perception of product or co.Ex. Nike: A shoe is an attribute
Airwalk: Extreme sports, Image to kidsSymbols:
• Apple• Lion (Harris Bank)• Passion (E. Taylor)• Uninhibited (Cher)• Blue (IBM)• Yellow (Kodak)• Red (Campbell Soup)
Media: Chosen image has to be worked into Ads, news reports, brochures, annual reports, bus. cards, etc
Atmosphere: Physical spaces occupied by a company• Hyatt Regency: Atrium lobbies• Bank Buildings must convey an image of safety
Events: Sponsorship• AT&T and IBM: sponsor symphony performance and art exhibits• Heinz gives money to hospitals• Kraft donates to MADD
Stages of Competitive Cycle
Sole Supplier
Competitive
Entry
Share Stability
Commodity
Competition
Withdrawal
Market Share
Production Costs
Price Premium