Segmentation Targeting and Position -Marketing

Marketing and Segmentation

KPI Working Group Meeting

www.britishcouncil.org 1

Wednesday 21st Sept 2016Presented by:Chikodi OnyemerelaPartnerships Manager

Marketing ………………defined1. Marketing is an organisational function and a set of processes

for creating, communicating and delivering value to customers and for managing customer relationship in ways that benefit the organisation and its stakeholders.

- Kotler and Keller (2012), Marketing Management

2. CIM defines Marketing as the management process responsible for identifying, anticipating and satisfying Customers requirements profitably.

These sounds like metrics all the way, don’t they?


Therefore….Marketing Planning is…

“ a logical sequence of events leading to setting of marketing objectives and formulation of plans for achieving”

My best model is:

S (Situation analysis) – where are we now?

O (Objectives) – where do we want to be?

S (Strategy) - how do we get there?

T (Tactics) – specific details of the Strategy ie what needs doing?

A (Action) – tasks to implement the Strategy and Tactics ie by who, by when?

C (Control) - are we on the right track?


Somethings Marketing is not


Marketing functionMarketing function therefore focuses on:

• Markets

• Customers

• Competition

• Value creation for the various stakeholders


Strategic versus Operational Marketing

• Strategic Marketing plan do not just concentrate on the marketing Mix but drives towards the achievement of Stakeholders values in the organisation. Strategic marketing plan is supposed to last between 3 – 5 years and should have a long term focus.

• Operational Marketing plan is for one year and built around the Marketing Mix


Orientations …Game changing


Where do you think we are on this grid and what KPI do we need?

Marketing Value Drivers


Financial Value Drivers

Marketing Value Drivers

Operational Value Drivers

Market selection

Strong NPD

Strong Relationships

Marketing Knowledge

Strong Brand/Reput

.

Customer Loyalty

Because this is about metrics and KPIs


Segmentation, Targeting and Positioning (STP)STP is core to marketing strategy linking and prioritising audiences with proposition.

It is a model for expanding sales by dividing our market into smaller units (segments), Targeting these Segments and Position the Brand ‘in their minds’

This is achieved by identifying the Segments, evaluating the commercial attractiveness of those segments(using Mult. Factor Metrix), developing a marketing mix and product positioning strategy for each segment


Product Attractiveness

HIGH MEDIUM LOWBusineAttss Strenght

STRONG

MEDIUM

WEAK

Product Attractiveness

HIGH MEDIUM LOWBusineAttss Strenght

STRONG

MEDIUM

WEAK

Then, Segmentation


….Customer Segmentation is essentially the categorisation of our customer base into clearly defined, semi-ficticious buyer personas.

It is therefore an ‘analytical’ process driven by customer needs, which help maximize resources and support business growth.

“Segmentation is core marketing strategy concept , that bridges the gap between diverse customer needs and behavior, and finite corporate resources”

Segmentation

Kotler et al (1999) defines Market Segmentation as “ dividing a market up into distinct groups of buyers with different needs, characteristics or behaviors, who might require separate products or marketing mixes”

While:

Lovelock and Wirtz 2011 say: Market Segmentation is the process of dividing the population of possible customers into distinct groups. Those customers within the same segments shares common characteristics that can help a firm in targeting those customers and marketing to them effectively.

In segmentation, we are looking for Characteristics which influences Buyer Behaviours. After which we Profile the Customers. Customers with similar product needs and buying behaviours can be grouped together into market segments.


A certain Theory “The Economic Pricing Theory”

The Economic Pricing Theory is of the view that maximum profits are achieved when pricing levels discriminate between segments e.g Business Class etc,


Why we must Segment• Meet different needs: to meet customers needs more precisely by considering

customers’ characteristics, requirements and behaviour

• Aptly fundamental for Biz success in a competitive market

• To Increase profits: by grouping customers based on their needs, organisations can obtain the best price for their products and services

• Segment leadership: To gain segment leadership

• Retain Customers: by providing specific products and services focused on specific needs, an organisation is more likely to foster the loyalty of customers

• Focused Marcomms: Segmentation enables an organisation to identify those most likely to buy and therefore avoid waste in terms of communication and promotional effort

• Improves retention rate: satisfied customers are less likely to look else.

• Segmentation will drive business performance if done properly

• With Segmentation you no longer offer middle of the road offer

• Effective segmentation means you are no longer trying to deliver one size fits all solution


Targeting• Once the organisation has identified propsective segment, it then

evaluate them and decide which one it will serve or Target.

“Kotler et al (1999) also defined targeting as the process of evaluating each market segment attractiveness and selecting one or more segment to enter”.

• Targeting involves evaluating market opportunity against their strategic fit with the organisation


Positioning• Once target markets have been chosen, an organisation then has

to decide the position from which it will compete

“Kotler et al (1999) further defined positioning as arranging for a product to occupy a clear distinctive place in the minds of target consumers”.

• Segmentation, Targeting and Positioning are important in achieving a strong competitive position in the market.


Steps in Segmentation &where the KPIs may come from


Identify & select the bases by which the market may be segmented

Develop segment profile

Evaluate the attractiveness of each segment

Select the segment to be targeted

Identify the best possible positioning for each selected target

Choose, develop & communicate the best positioning concept

STP


Common practice.

Because Segmentation is hard work, people simply move from Market to Communication with segmenting properly. In many companies segmentation is not being done.

“because Segmentation allows you to be Focused and Selective you don’t have to talk to the whole market”


The contention

“the geo-demographic information we normally use for Segmentation doesn’t necessarily give a good information on buyer behaviour. Segmentation is best done on the basis of characteristics that drives buyer behaviour”


How to segment our exiting market


How to segment our exiting market…..cont.


Marketing Mix• Product

• Price

• Promotion

• Place

• People

• Process

• Physical evidence

• Packaging (my wife)

• Partners (Dave Chaffey)


Few relevant questions associated with the Mix


Some ModelAnsoff Matrix


Ansoff Matrix …..cont.


Some Models……cont.The Boston Consulting Group Product Porfolio Matrix (The BCG Matrix)


The BCG Matrix….cont.


Some Models……cont.RACE Planning Model


RACE Planning Model….cont.


PESTLE


SWOT/TOW


Tactics without Strategy is dumbing down the Marketing discipline

“ if marketers want to be taken seriously they must end their preoccupation with Tactics and Tools and focus on their strategy, devised by

thoroughly researching, segmenting and targeting their market”

- Mark Ritson, may 2016


Thank you


Segmentation Targeting and Position -Marketing

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