Mgr. Cesar Augusto Díaz Moya

What is it?

«Grouping customers according to similar characteristics needs and wants»

How can we do it? Intuition (experience and judgment) Imitating ( Act as followers) Structured analisis

▪ Identify current and potential needs▪ Identify differenciating characteristics▪ Determine whose need is it!

CRITERIAS Geographic Demographic Psychographic (Social Life, Life style,

Personality) Behavioral

▪ Frequency and level of usage▪ Percieved Benefits▪ Willigness to buy▪ Attitude toward a product

Psychographic Social Class: Car – Clothes – Leissure – Reading – Home Furnishing.

Life Style: «Me Generation» Work Out Shoes-Healthy Food – Fitness Products.

Behavioral: Occassion of usage: Orange Juice, Disposable Camera, Flowers.

Benefits Sought: (Toothpaste) ▪ Economical▪ Medical▪ Cosmetic▪ Taste

1. Research Identify needs Qualitative (motivations, attitude) Quantitative (brand recognition, usage

forms)2. Analysis3. Identify segment Profile

(Pass from heterogenous to homogenous group)

4. Describe it!

Identifiable AccesibleSustancialDifferenciableNeeds to be able to serveNeed to be able to defend

SEGMENT DESCRIPTION OPPORTUNTY

Jet Seller Rich –Fashion Tourism-Luxurious-Exclusive Products

MTV Generation Young/Middle Income Music-Videos-Movies-Trendy Fashion

Sportive Souvenirs-Wear-Events

Technics Software-Computers-Gadgets

Global Citizens Concerned with social issues- connectivity

Green Wood –Web based comunities

Benefits Better product adjustment Better resources usage Specialization Profitability Market Opportunities Quick Response Entry Barriers Competitive Advantage Differenciation

What does Segmentation permit?Wide vision and perspective of clients to be satisfiedRight Mix Design

Resources Focusing (One or several segments)

Identify Globalized Segments for ApplyingGlobal Strategy

Certain Degree of Standardization

Global market data warranties a succesful segmentation and positioning

A globalization is a result of a company evolution, it means multiple international markets.

Globalization involves:* Integrated sourcing, production and marketing* Allocated resources to achieve a balanced

portfolio and growth* Coordinate marketing activities accross countries

and regions. Certain degree of standardization

Markets are becoming homogeneous thank to:

• Global communications• Rapid technology diffusion

Three homogenizing forces:Three homogenizing forces:• Dynamic preferences Dynamic preferences

• New productsNew products• Leading marketsLeading markets

What costumers want, not what customers might want

Customers in a particular local market have different

preferences from those elsewhere

•Clustering CountriesClustering Countries•Diversification Vs. Focus strategyDiversification Vs. Focus strategy

Grouping countries on the basis of common characteristics considered to be important for marketing purposes.

Variables included:• Sociodemographic data• Income levels• Educational background • Indicators of level of development• Infrastructure

Which countries are similar and which countries are far apart. (computarized technique).

More variables used:• Population growth• Median age• Number of children per householdhousehold• Infant mortality• Life expectancy

«UN Info»

These kind of measures are These kind of measures are useful to judge country useful to judge country attractiveness, uncover attractiveness, uncover

market opportunities, and market opportunities, and suggest interesting suggest interesting

marketing implications.marketing implications.

Some examples!!!!!

Market Oriented Clustering Exhibit 11.2

Think and Feel Clustering Exhibit 11.3

* Information are too general* More accurated information in

clusters and different across clusters.

* Patterns identification (scale economies, simplifying logistics, similar promotions)

MACROSEGMENTATIONMACROSEGMENTATION

Similar markets Similar markets

Global strategies tend to be Global strategies tend to be DDIVERSIFICATIONIVERSIFICATION different different

FOCUS STRATEGY ON A FEW SIMILAR MARKETS IN THE SAME CLUSTER

MARKET POSITIONS FORTIFIEDMARKET POSITIONS FORTIFIED

* Spillover effects are shared more easily* Good advertising copy

* Same Product Line

Market factor to be considered when selecting between diversifying or overextending.

Exhibit 11.4 Market Factor affecting the choice of market portfolio.

Selection of similar target segments within the set of countries selected in the macrosegmentation stage.

High demand potential

1. Identifiable: what distinguishes them?

2. Measurable: How many belong to each segment?

3. Reachable: How to distribute to and communicate with each segment?

4. Able to buy: can they afford it?5. Willing to buy: do they want it?

1.1. What INFLUENCES buying behavior: What INFLUENCES buying behavior: Measure consumption level and choise Measure consumption level and choise

Political party affiliation V/S number of Political party affiliation V/S number of children children

2. Reflected and published in data 2. Reflected and published in data SIZE: SIZE:

Lifestyle V/S level of educationLifestyle V/S level of education

3. Help identify the MEDIA: 3. Help identify the MEDIA: Teenagers V/S social classTeenagers V/S social class

* Economic* Economic

* Demographic* Demographic

* Culture* Culture

* Benefits* Benefits

* Lifestyle* Lifestyle

Require resources and advance analytical techniques.

Difficulties in getting info from individual respondants.

Some market´s prefferences are not mature yet

There is always a reward on researching Secondary Data sources become critical

(Ex11.5)http://www.euromonitor.com/ http://bx.businessweek.com/

Market Penetration: Agressive Mix = strong CR Increase rate of use, repeat purchase,

attract competitor´s and nonusers. How? Home page on web, more stores,

short term price cuts, cuppons. Eg. Visa advertisement with interesting

places where…. «They don´t accept American Express»

Market Development: How?Adv in different media reach new

targets, new channels, new stores or new uses for the product.

Eg. Mc Donalds outlets in 800 Wal-mart stores, airports, office buildings, zoos & casinos.

Lipton recipies showing how to use dry soup mixes for chip dip.

Product Development: How? New or improved products for current

market

Eg. Microsoft with new versions of popular programs

Ski Resorts Develope trials for Hiking and M.Biking customers when no snow

Diversification: How? Entering into completely unfamiliar

products and markets

Eg. Coleman added a line of air compressors which attract building contractors rather than outdoor enthusiasts.

A generic market is a market with broadly similar needs and sellersoffering various—often diverse—ways of satisfying those needs.

product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

A generic market description doesn’t include any product-type terms. Thisemphasizes that any product type that satisfies the customer’s needs can compete in a generic market.

This depends on the firm’s resources, the nature of competition, and most important the similarity of customer needs, attitudes, and buying behavior.