market segmentation

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Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers : 

Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers Chapter 6

Road Map: Previewing the Concepts : 

6 - 2 Road Map: Previewing the Concepts Define the three steps of target marketing: market segmentation, market targeting, and market positioning. List and discuss the major bases for segmenting consumer and business markets. Explain how companies identify attractive market segments and choose a target marketing strategy. Discuss how companies position their products for maximum competitive advantage in the marketplace.

Market Segmentation : 

6 - 3 Market Segmentation Geographic: World region or country Region of country City or metro size Density or climate

Market Segmentation : 

6 - 4 Market Segmentation Demographic: Age, gender, family size, income, occupation, etc. The most popular bases for segmenting customer groups. Easier to measure than most other types of variables.

Market Segmentation : 

6 - 5 Market Segmentation Age and Life-Cycle Stage Example: P&G has different toothpastes for different age groups. Avoid stereotypes in promotions Promote positive messages

Market Segmentation : 

6 - 6 Market Segmentation Gender Women make 90% of home improvement decisions. Women influence 80% of all household consumer purchases.

Market Segmentation : 

6 - 7 Market Segmentation Income Identifies and targets the affluent for luxury goods. People with low annual incomes can be a lucrative market. Some manufacturers have different grades of products for different markets.

Market Segmentation : 

6 - 8 Market Segmentation Psychographic Social class Lifestyle Personality

Market Segmentation : 

6 - 9 Market Segmentation Behavioral Occasions: Special promotions and labels for holidays. (e.g., Hershey Kisses) Special products for special occasions. (e.g., Kodak disposable cameras)

Market Segmentation : 

6 - 10 Market Segmentation Behavioral Benefits Sought: Different segments desire different benefits from products. (e.g., P&G’s multiple brands of laundry detergents to satisfy different needs in the product category)

Market Segmentation : 

6 - 11 Market Segmentation Behavioral User Status: Nonusers, ex-users, potential users, first-time users, regular users Usage Rate: Light, medium, heavy Loyalty Status: Brands, stores, companies

Market Segmentation : 

6 - 12 Market Segmentation Best to use multiple approaches in order to identify smaller, better-defined target groups. Start with a single base and then expand to other bases.

Market Segmentation : 

6 - 13 Market Segmentation Geodemographic Claritas, Inc. Potential Rating Index for Zip Markets (PRIZM) Based on U.S. Census data Profiles on 260,000 U.S. neighborhoods 62 clusters or types

Segmenting Business Markets : 

6 - 14 Segmenting Business Markets Consumer and business markets use many of the same variables for segmentation. Business marketers can also use: Operating Characteristics Purchasing Approaches Situational Factors Personal Characteristics

Segmenting International Markets : 

6 - 15 Segmenting International Markets Factors Used: Geographic location Economic factors Political and legal factors Cultural factors Intermarket Segmentation

Requirements for Effective Segmentation : 

6 - 16 Requirements for Effective Segmentation Measurable Accessible Substantial Differentiable Actionable

Evaluating Market Segments : 

6 - 17 Evaluating Market Segments Segment Size and Growth Analyze current segment sales, growth rates, and expected profitability. Segment Structural Attractiveness Consider effects of: competitors, existence of substitute products, and the power of buyers & suppliers. Company Objectives and Resources Examine company skills & resources needed to succeed in that segment. Offer superior value & gain advantages over competitors.

Micromarketing : 

6 - 18 Micromarketing Tailoring products and marketing programs to suit the tastes of specific individuals and locations. Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores. Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.

Choosing a Market Coverage Strategy : 

6 - 19 Choosing a Market Coverage Strategy Factors to Consider Company resources Product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies

Socially Responsible Marketing : 

6 - 20 Socially Responsible Marketing Smart targeting helps both companies and consumers. Target marketing sometimes generates controversy and concern. Vulnerable and disadvantaged can be targeted. Cereal, cigarette, beer, and fast-food marketers have received criticism. Internet has raised fresh concerns about potential targeting abuses.

Positioning for Competitive Advantage : 

6 - 21 Positioning for Competitive Advantage Product’s position is the way the product is defined by consumers on important attributes. The place the product occupies in consumers’ minds relative to competing products.

Choosing a Positioning Strategy : 

6 - 22 Choosing a Positioning Strategy Identify a set of possible competitive advantages on which to build a position. Choose the right competitive advantages. Select an overall positioning strategy.

Identifying Possible Competitive Advantages : 

6 - 23 Identifying Possible Competitive Advantages Key to winning target customers is to understand their needs better than competitors do and to deliver more value. Competitive advantage – extent to which a company can position itself as providing superior value.

Identifying Possible Competitive Advantages : 

6 - 24 Identifying Possible Competitive Advantages Product differentiation Services differentiation Image differentiation People differentiation

Positioning Errors : 

6 - 25 Positioning Errors Underpositioning: Failing to really position the company at all. Overpositioning: Giving buyers too narrow a picture of the company. Confused Positioning: Leaving buyers with a confused image of a company.

Choosing Right Competitive Advantages : 

6 - 26 Choosing Right Competitive Advantages Important Distinctive Superior Communicable Preemptive Affordable Profitable

Communicating and Delivering the Chosen Position : 

6 - 27 Communicating and Delivering the Chosen Position Company must take strong steps to deliver and communicate the desired position to target consumers. The marketing mix efforts must support the positioning strategy. Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

Rest Stop: Reviewing the Concepts : 

6 - 28 Rest Stop: Reviewing the Concepts Define the three steps of target marketing: market segmentation, market targeting, and market positioning. List and discuss the major bases for segmenting consumer and business markets. Explain how companies identify attractive market segments and choose a target marketing strategy. Discuss how companies position their products for maximum competitive advantage in the marketplace.

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