Essentials of Marketing MKT 333
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Transcript of Essentials of Marketing MKT 333
Chapter 8 - Slide Chapter 8 - Slide 11 © 1998 South-Western College Publishing1998 South-Western College Publishing
Essentials of MarketingMKT 333
Essentials of MarketingMKT 333
Chapter 3: Market Chapter 3: Market Segmentation, Targeting, and Segmentation, Targeting, and
Positioning StrategiesPositioning Strategies
Chapter 3: Market Chapter 3: Market Segmentation, Targeting, and Segmentation, Targeting, and
Positioning StrategiesPositioning Strategies
Chapter 8 - Slide Chapter 8 - Slide 22 © 1998 South-Western College Publishing1998 South-Western College Publishing
What is a Market?
A group of actual or potential customers A group of actual or potential customers for a particular product.for a particular product.
A market has:A market has: Purchasing powerPurchasing power Willingness to spend moneyWillingness to spend money Authority to spend moneyAuthority to spend money
A group of actual or potential customers A group of actual or potential customers for a particular product.for a particular product.
A market has:A market has: Purchasing powerPurchasing power Willingness to spend moneyWillingness to spend money Authority to spend moneyAuthority to spend money
Chapter 8 - Slide Chapter 8 - Slide 33 © 1998 South-Western College Publishing1998 South-Western College Publishing
Competitive AdvantageCompetitive Advantage
Superiority to or favorable difference from Superiority to or favorable difference from competitors along some dimension competitors along some dimension
important to the market.important to the market.
Two Approaches:Two Approaches: Price leadership strategyPrice leadership strategy Differentiation strategyDifferentiation strategy
Superiority to or favorable difference from Superiority to or favorable difference from competitors along some dimension competitors along some dimension
important to the market.important to the market.
Two Approaches:Two Approaches: Price leadership strategyPrice leadership strategy Differentiation strategyDifferentiation strategy
Chapter 8 - Slide Chapter 8 - Slide 44 © 1998 South-Western College Publishing1998 South-Western College Publishing
Price Leadership StrategyPrice Leadership Strategy
Emphasizes underpricing all competitorsEmphasizes underpricing all competitors
A price leader:A price leader: Has the lowest per unit costsHas the lowest per unit costs Generates large volume salesGenerates large volume sales Examples: Wal-Mart, Southwest Airlines, Examples: Wal-Mart, Southwest Airlines,
Bic pensBic pens
Emphasizes underpricing all competitorsEmphasizes underpricing all competitors
A price leader:A price leader: Has the lowest per unit costsHas the lowest per unit costs Generates large volume salesGenerates large volume sales Examples: Wal-Mart, Southwest Airlines, Examples: Wal-Mart, Southwest Airlines,
Bic pensBic pens
Chapter 8 - Slide Chapter 8 - Slide 55 © 1998 South-Western College Publishing1998 South-Western College Publishing
Differentiation StrategyDifferentiation Strategy
Product is unique and offers distinct Product is unique and offers distinct advantage or is set apart in ways other advantage or is set apart in ways other
than price.than price. Examples: Scotch-Brite steel wool pads, Examples: Scotch-Brite steel wool pads,
Apple ComputerApple Computer
Product is unique and offers distinct Product is unique and offers distinct advantage or is set apart in ways other advantage or is set apart in ways other
than price.than price. Examples: Scotch-Brite steel wool pads, Examples: Scotch-Brite steel wool pads,
Apple ComputerApple Computer
Chapter 8 - Slide Chapter 8 - Slide 66 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market/Product MatrixMarket/Product Matrix
Old/ExistingMarkets
Old/ExistingProducts
MARKETMARKETPENETRATIONPENETRATION
Chapter 8 - Slide Chapter 8 - Slide 77 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market/Product MatrixMarket/Product Matrix
Old/ExistingMarkets
Old/ExistingProducts
MARKETMARKETPENETRATIONPENETRATION
NewMarkets
MARKETMARKETDEVELOPMENTDEVELOPMENT
Chapter 8 - Slide Chapter 8 - Slide 88 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market/Product MatrixMarket/Product Matrix
Old/ExistingMarkets
Old/ExistingProducts
MARKETMARKETPENETRATIONPENETRATION
NewMarkets
MARKETMARKETDEVELOPMENTDEVELOPMENT
NewProducts
PRODUCTPRODUCTDEVELOPMENTDEVELOPMENT
Chapter 8 - Slide Chapter 8 - Slide 99 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market/Product MatrixMarket/Product Matrix
Old/ExistingMarkets
NewMarkets
Old/ExistingProducts
NewProducts
MARKETMARKETPENETRATIONPENETRATION
MARKETMARKETDEVELOPMENTDEVELOPMENT
PRODUCTPRODUCTDEVELOPMENTDEVELOPMENT
DIVERSIFI-DIVERSIFI-CATIONCATION
Chapter 8 - Slide Chapter 8 - Slide 1010 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market/Product MatrixMarket/Product Matrix
Old/ExistingMarkets
NewMarkets
Old/ExistingProducts
NewProducts
MARKETMARKETPENETRATIONPENETRATION
MARKETMARKETDEVELOPMENTDEVELOPMENT
PRODUCTPRODUCTDEVELOPMENTDEVELOPMENT
DIVERSIFI-DIVERSIFI-CATIONCATION
Chapter 8 - Slide Chapter 8 - Slide 1111 © 1998 South-Western College Publishing1998 South-Western College Publishing
What is Market Segmentation?What is Market Segmentation?
Dividing a heterogeneous market into a Dividing a heterogeneous market into a number of smaller, homogeneous number of smaller, homogeneous
submarkets.submarkets.
Dividing a heterogeneous market into a Dividing a heterogeneous market into a number of smaller, homogeneous number of smaller, homogeneous
submarkets.submarkets.Mass MarketMass Market Market SegmentationMarket Segmentation
Chapter 8 - Slide Chapter 8 - Slide 1212 © 1998 South-Western College Publishing1998 South-Western College Publishing
The Goal of SegmentationThe Goal of Segmentation
To identify groups of To identify groups of people who will people who will respond similarly to respond similarly to a marketing strategya marketing strategy
To identify groups of To identify groups of people who will people who will respond similarly to respond similarly to a marketing strategya marketing strategy
Chapter 8 - Slide Chapter 8 - Slide 1313 © 1998 South-Western College Publishing1998 South-Western College Publishing
Commonly Used Bases for SegmentationCommonly Used Bases for Segmentation
Demographic informationDemographic information socio-economic factorssocio-economic factors geographic/geodemographic informationgeographic/geodemographic information consumer behavior patternsconsumer behavior patterns
consumption patternsconsumption patterns benefits desiredbenefits desired
PsychographicsPsychographics
Demographic informationDemographic information socio-economic factorssocio-economic factors geographic/geodemographic informationgeographic/geodemographic information consumer behavior patternsconsumer behavior patterns
consumption patternsconsumption patterns benefits desiredbenefits desired
PsychographicsPsychographics
Chapter 8 - Slide Chapter 8 - Slide 1414 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: DemographicSegmenting Consumer Markets: Demographic
Demographic Demographic Segmentation:Segmentation:
AgeAge SexSex Race and ethnicityRace and ethnicity Family life cycleFamily life cycle Marital statusMarital status Family sizeFamily size
Demographic Demographic Segmentation:Segmentation:
AgeAge SexSex Race and ethnicityRace and ethnicity Family life cycleFamily life cycle Marital statusMarital status Family sizeFamily size
Chapter 8 - Slide Chapter 8 - Slide 1515 © 1998 South-Western College Publishing1998 South-Western College Publishing
Men and Women Differ in their Responses to Marketing CommunicationMen and Women Differ in their Responses to Marketing Communication
Insurance: You would feel more Insurance: You would feel more comfortable knowing you will comfortable knowing you will have the security of an income have the security of an income within 30 days of your injury, within 30 days of your injury, don’t you think?don’t you think?
Cars: You have the safety of Cars: You have the safety of knowing that this car was rated knowing that this car was rated as one of the most reliable as one of the most reliable performers.performers.
Computers: I recommend a Computers: I recommend a faster machine so you don’t faster machine so you don’t have to wait a long rime for the have to wait a long rime for the information to appear on the information to appear on the screen and enough capacity for screen and enough capacity for your graphic displays.your graphic displays.
Insurance: You would feel more Insurance: You would feel more comfortable knowing you will comfortable knowing you will have the security of an income have the security of an income within 30 days of your injury, within 30 days of your injury, don’t you think?don’t you think?
Cars: You have the safety of Cars: You have the safety of knowing that this car was rated knowing that this car was rated as one of the most reliable as one of the most reliable performers.performers.
Computers: I recommend a Computers: I recommend a faster machine so you don’t faster machine so you don’t have to wait a long rime for the have to wait a long rime for the information to appear on the information to appear on the screen and enough capacity for screen and enough capacity for your graphic displays.your graphic displays.
Insurance: For only $36 Insurance: For only $36 dollars a month, a fraction dollars a month, a fraction more than a dollar a day, you more than a dollar a day, you can be guaranteed an income can be guaranteed an income for the rest of your life if you for the rest of your life if you become injured.become injured.
Cars: The sleek aerodynamic Cars: The sleek aerodynamic design make this car an design make this car an outstanding performer.outstanding performer.
Computers: In order to get Computers: In order to get real performance, you’ll want real performance, you’ll want at least a Pentium 150 with 16 at least a Pentium 150 with 16 megs of RAM and a 1.6 gig megs of RAM and a 1.6 gig hard drive.hard drive.
Insurance: For only $36 Insurance: For only $36 dollars a month, a fraction dollars a month, a fraction more than a dollar a day, you more than a dollar a day, you can be guaranteed an income can be guaranteed an income for the rest of your life if you for the rest of your life if you become injured.become injured.
Cars: The sleek aerodynamic Cars: The sleek aerodynamic design make this car an design make this car an outstanding performer.outstanding performer.
Computers: In order to get Computers: In order to get real performance, you’ll want real performance, you’ll want at least a Pentium 150 with 16 at least a Pentium 150 with 16 megs of RAM and a 1.6 gig megs of RAM and a 1.6 gig hard drive.hard drive.
Chapter 8 - Slide Chapter 8 - Slide 1616 © 1998 South-Western College Publishing1998 South-Western College Publishing
Men and Women Differ (cont.)Men and Women Differ (cont.)
Financial Services: Let’s work Financial Services: Let’s work together to develop a plan together to develop a plan that will make you feel that will make you feel comfortable if you decide to comfortable if you decide to retire at age 65retire at age 65
Newsletters: This newsletter Newsletters: This newsletter will facilitate a better will facilitate a better understanding and understanding and communication between you communication between you and your staff.and your staff.
Financial Services: Let’s work Financial Services: Let’s work together to develop a plan together to develop a plan that will make you feel that will make you feel comfortable if you decide to comfortable if you decide to retire at age 65retire at age 65
Newsletters: This newsletter Newsletters: This newsletter will facilitate a better will facilitate a better understanding and understanding and communication between you communication between you and your staff.and your staff.
Financial Services: You will Financial Services: You will need to set aside X amount of need to set aside X amount of money a year in order to money a year in order to retire to a comfortable retire to a comfortable lifestyle.lifestyle.
Newsletter: The information Newsletter: The information in this newsletter will make in this newsletter will make you an expert in your field, so you an expert in your field, so you can more easily direct you can more easily direct your staff.your staff.
Financial Services: You will Financial Services: You will need to set aside X amount of need to set aside X amount of money a year in order to money a year in order to retire to a comfortable retire to a comfortable lifestyle.lifestyle.
Newsletter: The information Newsletter: The information in this newsletter will make in this newsletter will make you an expert in your field, so you an expert in your field, so you can more easily direct you can more easily direct your staff.your staff.
Chapter 8 - Slide Chapter 8 - Slide 1717 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: SocioeconomicSegmenting Consumer Markets: Socioeconomic
Socioeconomic Socioeconomic Segmentation:Segmentation:
OccupationOccupation EducationEducation IncomeIncome Social classSocial class
Socioeconomic Socioeconomic Segmentation:Segmentation:
OccupationOccupation EducationEducation IncomeIncome Social classSocial class
Chapter 8 - Slide Chapter 8 - Slide 1818 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: GeographicSegmenting Consumer Markets: Geographic
Geographic Geographic Segmentation:Segmentation:
ContinentContinent Political boundariesPolitical boundaries Cultural regionsCultural regions Metropolitan areasMetropolitan areas Climatic regionsClimatic regions
Geographic Geographic Segmentation:Segmentation:
ContinentContinent Political boundariesPolitical boundaries Cultural regionsCultural regions Metropolitan areasMetropolitan areas Climatic regionsClimatic regions
Chapter 8 - Slide Chapter 8 - Slide 1919 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: GeodemographicSegmenting Consumer Markets: Geodemographic
Geodemographic Geodemographic Segmentation:Segmentation:
Combination of Combination of geographic and geographic and demographic variablesdemographic variables
Example: zip codes in Example: zip codes in PRIZM systemPRIZM system
Geodemographic Geodemographic Segmentation:Segmentation:
Combination of Combination of geographic and geographic and demographic variablesdemographic variables
Example: zip codes in Example: zip codes in PRIZM systemPRIZM system
BeverlyBeverlyHillsHills
9021090210
Chapter 8 - Slide Chapter 8 - Slide 2020 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: Behavior PatternsSegmenting Consumer Markets: Behavior Patterns
Segmenting by Behavior Segmenting by Behavior Patterns:Patterns:
Heavy users vs. Heavy users vs. infrequent usersinfrequent users
Purchasing habitsPurchasing habits Loyalty to brandLoyalty to brand Benefit expectedBenefit expected Importance of priceImportance of price
Segmenting by Behavior Segmenting by Behavior Patterns:Patterns:
Heavy users vs. Heavy users vs. infrequent usersinfrequent users
Purchasing habitsPurchasing habits Loyalty to brandLoyalty to brand Benefit expectedBenefit expected Importance of priceImportance of price
Chapter 8 - Slide Chapter 8 - Slide 2121 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Consumer Markets: Psychographic/LifestyleSegmenting Consumer Markets: Psychographic/Lifestyle
Psychographic/lifestyle Psychographic/lifestyle Segmentation:Segmentation:
ActivitiesActivities InterestsInterests OpinionsOpinions ValuesValues
Psychographic/lifestyle Psychographic/lifestyle Segmentation:Segmentation:
ActivitiesActivities InterestsInterests OpinionsOpinions ValuesValues
Chapter 8 - Slide Chapter 8 - Slide 2222 © 1998 South-Western College Publishing1998 South-Western College Publishing
Segmenting Business MarketsSegmenting Business Markets
Segmentation variables:Segmentation variables: GeographicGeographic Organizational Organizational
characteristicscharacteristics Purchase behavior and Purchase behavior and
usage patternsusage patterns Organizational Organizational
predisposition or policypredisposition or policy
Segmentation variables:Segmentation variables: GeographicGeographic Organizational Organizational
characteristicscharacteristics Purchase behavior and Purchase behavior and
usage patternsusage patterns Organizational Organizational
predisposition or policypredisposition or policy
Chapter 8 - Slide Chapter 8 - Slide 2323 © 1998 South-Western College Publishing1998 South-Western College Publishing
Steps in Segmenting and Selecting Target MarketsSteps in Segmenting and Selecting Target Markets
Step 1:Step 1:Break marketBreak marketinto componentinto componentpartsparts
Step 2:Step 2:Regroup intoRegroup intomarket segmentsmarket segments
Step 3:Step 3:Select whichSelect whichsegment(s) tosegment(s) totargettarget
HeterogeneousHeterogeneouscustomerscustomers
IndividualIndividualcustomerscustomers
HomogeneousHomogeneousmarketmarket
segmentssegments
TargetTargetmarketmarket
Chapter 8 - Slide Chapter 8 - Slide 2424 © 1998 South-Western College Publishing1998 South-Western College Publishing
Target MarketTarget Market
The market segment toward which the The market segment toward which the organization decides to direct its organization decides to direct its
marketing plan.marketing plan.
The market segment toward which the The market segment toward which the organization decides to direct its organization decides to direct its
marketing plan.marketing plan.
TargetTargetMarketMarket
Chapter 8 - Slide Chapter 8 - Slide 2525 © 1998 South-Western College Publishing1998 South-Western College Publishing
Strategies for Target MarketingStrategies for Target Marketing
Four Strategies:Four Strategies:
UndifferentiatedUndifferentiatedMarketingMarketing
ConcentratedConcentratedMarketingMarketing
DifferentiatedDifferentiatedMarketingMarketing
CustomCustomMarketingMarketing
Chapter 8 - Slide Chapter 8 - Slide 2626 © 1998 South-Western College Publishing1998 South-Western College Publishing
Undifferentiated MarketingUndifferentiated Marketing
Appeal to a broad range of customers.Appeal to a broad range of customers.Appeal to a broad range of customers.Appeal to a broad range of customers.
A small storeA small storein an isolatedin an isolatedtowntown
•ProductProduct•PricePrice•DistributionDistribution•PromotionPromotion
EverybodyEverybody
Marketing Marketing organizationorganization
MarketingMarketingmixmix
TargetTargetmarketmarket
Chapter 8 - Slide Chapter 8 - Slide 2727 © 1998 South-Western College Publishing1998 South-Western College Publishing
Concentrated MarketingConcentrated Marketing
Zeroing in on a single target market.Zeroing in on a single target market.Zeroing in on a single target market.Zeroing in on a single target market.
LargeLargechain sawchain sawmanufacturermanufacturer
LargeLargechain sawchain sawmanufacturermanufacturer
•ProductProduct•PricePrice•DistributionDistribution•PromotionPromotion
•ProductProduct•PricePrice•DistributionDistribution•PromotionPromotion
Marketing Marketing organizationorganization
MarketingMarketingmixmix
SuburbanSuburbanusersusers
Lumber-Lumber-jacksjacks
FarmFarmusersusers
Chapter 8 - Slide Chapter 8 - Slide 2828 © 1998 South-Western College Publishing1998 South-Western College Publishing
Differentiated StrategyDifferentiated Strategy
Select more than one target market and Select more than one target market and develop a separate marketing mix for develop a separate marketing mix for
each.each.
Select more than one target market and Select more than one target market and develop a separate marketing mix for develop a separate marketing mix for
each.each.
Chapter 8 - Slide Chapter 8 - Slide 2929 © 1998 South-Western College Publishing1998 South-Western College Publishing
Differentiated Strategy: Example of ClairolDifferentiated Strategy: Example of Clairol
ClairolClairol
MarketingMarketingOrganizationOrganization
SeveralSeveralmarketing mixesmarketing mixes
Clairol Option for MenClairol Option for Men
Clairol Loving Care Clairol Loving Care
Clairol Ultress Clairol Ultress
Miss Clairol Miss Clairol
Clairol Frost & Tip Clairol Frost & Tip
Men with gray hairMen with gray hair
Middle aged women Middle aged women
Prestige-oriented womenPrestige-oriented women
Brand loyal usersBrand loyal users
Young womenYoung women
Target marketTarget marketsegmentsegment
Chapter 8 - Slide Chapter 8 - Slide 3030 © 1998 South-Western College Publishing1998 South-Western College Publishing
Custom MarketingCustom Marketing
Marketer seeks to satisfy each customer’s Marketer seeks to satisfy each customer’s unique set of needs.unique set of needs.
Marketer seeks to satisfy each customer’s Marketer seeks to satisfy each customer’s unique set of needs.unique set of needs.
Chapter 8 - Slide Chapter 8 - Slide 3131 © 1998 South-Western College Publishing1998 South-Western College Publishing
Custom StrategyCustom Strategy
IndustrialIndustrialrobotsrobotsmainte-mainte-nancenance
MarketingMarketingOrganizationOrganization
Individual Individual marketing mixmarketing mix
for each customerfor each customer
Marketing mix #1Marketing mix #1
Marketing mix #2Marketing mix #2
Marketing mix #3Marketing mix #3
Marketing mix #4Marketing mix #4
Customer #1Customer #1
Customer #2Customer #2
Customer #3Customer #3
Customer #4Customer #4
IndividualIndividualcustomerscustomers
Chapter 8 - Slide Chapter 8 - Slide 3232 © 1998 South-Western College Publishing1998 South-Western College Publishing
PositioningPositioning
What do we want our What do we want our customers to think customers to think about our products?about our products?
How should it How should it compare to our compare to our competitor’s competitor’s products?products?
What do we want our What do we want our customers to think customers to think about our products?about our products?
How should it How should it compare to our compare to our competitor’s competitor’s products?products?
Chapter 8 - Slide Chapter 8 - Slide 3333 © 1998 South-Western College Publishing1998 South-Western College Publishing
PositioningPositioning
Market position: Market position: The way consumers The way consumers perceive the brand relative to its perceive the brand relative to its
competition.competition. Head-to-head competitionHead-to-head competition RepositioningRepositioning
Market position: Market position: The way consumers The way consumers perceive the brand relative to its perceive the brand relative to its
competition.competition. Head-to-head competitionHead-to-head competition RepositioningRepositioning
Chapter 8 - Slide Chapter 8 - Slide 3434 © 1998 South-Western College Publishing1998 South-Western College Publishing
Products are commonly positioned on:Products are commonly positioned on:
Product attributesProduct attributes Benefits offeredBenefits offered Usage occasionsUsage occasions User groupsUser groups
Product attributesProduct attributes Benefits offeredBenefits offered Usage occasionsUsage occasions User groupsUser groups
Chapter 8 - Slide Chapter 8 - Slide 3535 © 1998 South-Western College Publishing1998 South-Western College Publishing
Perceptual MappingPerceptual Mapping
Graphically Graphically displaying displaying consumers’ consumers’ perceptions of perceptions of product attributes product attributes across two or more across two or more dimensionsdimensions
Graphically Graphically displaying displaying consumers’ consumers’ perceptions of perceptions of product attributes product attributes across two or more across two or more dimensionsdimensions
Uses:Uses: to analyze current to analyze current
positionposition to select a position for to select a position for
a new producta new product to identify untapped to identify untapped
marketsmarkets
Uses:Uses: to analyze current to analyze current
positionposition to select a position for to select a position for
a new producta new product to identify untapped to identify untapped
marketsmarkets
Chapter 8 - Slide Chapter 8 - Slide 3636 © 1998 South-Western College Publishing1998 South-Western College Publishing
Market Positioning Map: TeaMarket Positioning Map: Tea
IcedIced HotHot
Traditional flavorTraditional flavor
Unique flavorUnique flavor
Luzianne Luzianne
LiptonLipton
TetleyTetley
Celestial SeasonsCelestial Seasons
NesteaNestea
1980s1980s
Chapter 8 - Slide Chapter 8 - Slide 3737 © 1998 South-Western College Publishing1998 South-Western College Publishing
Repositioning: TeaRepositioning: Tea
IcedIced HotHot
Traditional flavorTraditional flavor
Unique flavorUnique flavor
Luzianne Luzianne
LiptonLipton
TetleyTetley
Celestial SeasonsCelestial Seasons
NesteaNestea
mid-1990smid-1990s
Arizona Iced TeaArizona Iced Tea
SnappleSnapple
Lipton RoundsLipton Rounds
Tetley RoundsTetley Rounds
Lipton Natural TeasLipton Natural Teas
Lipton FlavoredLipton Flavored