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

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


1
Segmentation, Targeting, and Positioning
Building the Right Relationships with the Right
Customers
  • Suhel Khan
  • Oxford College ofLondon

2
Learning Goals
  1. Learn the three steps of target marketing, market
    segmentation, target marketing, and market
    positioning
  2. Understand the major bases for segmenting
    consumer and business marketing strategy
  3. Know how companies identify attractive market
    segments and choose target marketing strategy
  4. Realize how companies position their products for
    maximum competitive advantage in the marketplace

3
Case StudyProcter Gamble
  • Sells multiple brands within the same product
    category for a variety of products
  • Brands feature a different mix of benefits and
    appeal to different segments
  • Has also identified different niches within
    certain segments
  • Product modifications are useful Tide offers
    seven different product formulations to serve
    different niches needs

4
Steps in market segmentation, targeting and
positioning
  • Market Segmentation
  • Identify bases for segmenting the market
  • Develop segment profiles
  • Target Marketing
  • Develop measure of segment attractiveness
  • Select target segments
  • Market Positioning
  • Develop positioning for target segments
  • Develop a marketing mix for each segment

Goal 1 Learn the three steps of target marketing
5
Definition
  • Market Segmentation
  • Dividing a market into distinct groups with
    distinct needs, characteristics, or behavior who
    might require separate products or marketing
    mixes.

Goal 2 Understand the major bases for
segmentation
6
Segmenting Consumer Markets
  • Geographical segmentation
  • Demographic segmentation
  • Most popular segmentation
  • Psychographic segmentation
  • Lifestyle, social class, and personality-based
    segmentation
  • Behavioral segmentation

Goal 2 Understand the major bases for
segmentation
7
Geographic Segmentation Variables
  • World region or country
  • U.S. region
  • State
  • City
  • Neighborhood
  • City or metro size
  • Density
  • Climate

Goal 2 Understand the major bases for
segmentation
8
Demographic Segmentation Variables
  • Age
  • Gender
  • Family size
  • Family life cycle
  • Income
  • Occupation
  • Education
  • Religion
  • Race
  • Generation
  • Nationality

Goal 2 Understand the major bases for
segmentation
9
Behavioral Segmentation Variables
  • Occasions
  • Benefits
  • User Status
  • Attitude Toward the Product
  • User Rates
  • Loyalty Status
  • Readiness Stage

Goal 2 Understand the major bases for
segmentation
10
Readiness Stages
  • Before a customer makes a purchase, he or she
    first goes through a series of stages called
    buyer readiness. According to Marc Mancini,
    these stages are

11
  • Awareness. Before you can sell, you must make
    contact with those who want to purchase. Your
    agency should create advertising and promotional
    programs thatll make your name conspicuous and
    will attract serious buyers.
  • Knowledge. Once rospective clients know your
    name, they begin the process of acquiring
    knowledge about what you can offer. Therefore,
    your advertising efforts should establish you as
    an expert perhaps even a specialist in one or
    more niche areas.

12
  • Liking. We all tend to buy from people or
    companies we feel positive about. Entertaining
    ads, for example, will convey warmth and the
    humanity of your agency. Direct your creative
    efforts toward making your agency seem joyful,
    inviting and approachable.
  • Preference. Benefits statements are the key to
    making prospective clients prefer your agency
    over another. Provide target customers with
    reasons to do business with you.

13
  • Conviction. Your advertising should build the
    customers certainty that youre the agency to
    call first. Client testimonials, for example,
    provide just the right reinforcement for the
    preference youve created.
  • Purchase. Once prospective clients have decided
    to seek you out, expert sales skills are critical
    to helping them make the right purchase.

14
Segmenting Business Markets
  • Demographic segmentation
  • Industry, company size, location
  • Operating variables
  • Technology, usage status, customer capabilities
  • Purchasing approaches
  • Situational factors
  • Urgency, specific application, size of order
  • Personal characteristics
  • Buyer-seller similarity, attitudes toward risk,
    loyalty

Goal 2 Understand the major bases for
segmentation
15
Segmenting International Markets
  • Geographic segmentation
  • Location or region
  • Economic factors
  • Population income or level of economic
    development
  • Political and legal factors
  • Type / stability of government, monetary
    regulations, amount of bureaucracy, etc.
  • Cultural factors
  • Language, religion, values, attitudes, customs,
    behavioral patterns

Goal 2 Understand the major bases for
segmentation
16
Requirements for Effective Segmentation
  • Measurable
  • Size, purchasing power, and profile of segment
  • Accessible
  • Can be reached and served
  • Substantial
  • Large and profitable enough to serve
  • Differentiable
  • Respond differently
  • Actionable
  • Effective programs can be developed

Goal 2 Understand the major bases for
segmentation
17
Target Marketing
  • Target Market
  • Consists of a set of buyers who share common
    needs or characteristics that the company decides
    to serve

Goal 3 Know how companies identify and target
attractive segments
18
Target Marketing
  • Evaluating Market Segments
  • Segment size and growth
  • Segment structural attractiveness
  • Level of competition
  • Substitute products
  • Power of buyers
  • Powerful suppliers
  • Company objectives and resources

Goal 3 Know how companies identify and target
attractive segments
19
Target Marketing
  • Selecting Target Market Segments
  • Undifferentiated (mass) marketing
  • Differentiated (segmented) marketing
  • Concentrated (niche) marketing
  • Micromarketing (local or individual)

Goal 3 Know how companies identify and target
attractive segments
20
Choosing a Target Marketing Strategy
  • Considerations include
  • Company resources
  • The degree of product variability
  • Products life-cycle stage
  • Market variability
  • Competitors marketing strategies

Goal 3 Know how companies identify and target
attractive segments
21
Target Marketing
  • Socially Responsible Targeting
  • Some segments, especially children, are at
    special risk
  • Many potential abuses on the Internet, including
    fraud Internet shoppers
  • Controversy occurs when the methods used are
    questionable

Goal 3 Know how companies identify and target
attractive segments
22
Positioning
  • Positioning
  • The place the product occupies in consumers
    minds relative to competing products.
  • Typically defined by consumers on the basis of
    important attributes.
  • Involves implanting the brands unique benefits
    and differentiation in the customers mind.
  • Positioning maps that plot perceptions of brands
    are commonly used.

Goal 4 Realize how companies position their
products
23
Choosing a Positioning Strategy
Topics
  • Differentiation can be based on
  • Products
  • Services
  • Channels
  • People
  • Image
  • Identifying possible competitive advantages
  • Choosing the right competitive advantage
  • Choosing a positioning strategy

Goal 4 Realize how companies position their
products
24
Market Segmentation
Topics
  • How many differences to promote?
  • Unique selling proposition
  • Several benefits
  • Which differences to promote? Criteria include
  • Important
  • Distinctive
  • Superior
  • Communicable
  • Preemptive
  • Affordable
  • Profitable
  • Identifying possible competitive advantages
  • Choosing the right competitive advantage
  • Choosing a positioning strategy

Goal 4 Realize how companies position their
products
25
Market Segmentation
Topics
  • Value propositions represent the full positioning
    of the brand
  • Possible value propositions
  • More for More
  • More for the Same
  • More for Less
  • The Same for Less
  • Less for Much Less
  • Identifying possible competitive advantages
  • Choosing the right competitive advantage
  • Choosing a positioning strategy

Goal 4 Realize how companies position their
products
26
Developing a Positioning Statement
  • Positioning statements summarize the company or
    brand positioning
  • EXAMPLE To (target segment and need) our (brand)
    is (concept) that (point-of-difference)

Goal 4 Realize how companies position their
products
27
Communicating the Positioning
  • Companies must be certain to DELIVER their value
    propositions.
  • Positions must be monitored and adapted over
    time.

Goal 4 Realize how companies position their
products
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