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This is a basic description of how to go for STP.

This is a basic description of how to go for STP.

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  • Similar principle also applies to geographical area’s. Not every local market is valuable to a manufacturer. Not every local market holds the same potential for a product. The competition might not be as severe in every local market. So again , it really makes sense to be able to identify the most and least valuable geographical markets and to execute your sales and marketing strategy based on that.
  • Summary Overview Computer-aided methods afford marketers additional help in segmenting markets. The ability of the computer to record, sort, recombine, and analyze a great many variables relating to consumer behaviour at the same time allows marketers to develop much more sophisticated market segments. More Sophisticated Techniques for Segmentation and Positioning Clustering . Clustering techniques try to find similar patterns within sets of data. Patterns of behaviour can be combined into new needs analysis and product design and marketing communications can focus on how these needs can be filled. Database Sorting . Past customer behaviour is often the source of information about new purchase opportunities or identification of cyclical buying habits. Teaching Tip: Database sorting is especially helpful in providing services. For example, a financial advisor enters a great deal of information about a client in a database. By contacting the client before key events, such as an wedding anniversary, the advisor demonstrates to the client the importance of their continuing relationship and how well the advisor has internalized what is important to the client. Differentiation . Differentiation refers to how the marketer tries to distinguish her or his offer in the marketplace -- how it is set off from the competition in hopefully meaningful ways. Positioning . Positioning refers to how customers think about proposed and/or present brands in a market. Marketing managers must always remember that it is the customer’s perception of where a product or brand is in relation to the other choices that is important.
  • Transcript

    • 1. Market Segmentation
    • 2. Consider
      • the role of segmentation in marketing strategy
      • types of market segmentation in
        • consumer markets B2C
        • industrial B2B
      • criteria & bases for segmenting consumer markets.
      • the segmentation process & basic strategies
      • positioning & repositioning
      • factors behind segmentation strategy choices.
    • 3. Overview
      • discover needs/wants of consumer groups to develop specialised products to satisfy group needs
      • identify the best media for advertising
      • related concepts (STP)
        • Segmentation (subsets with similar needs)
        • Targeting (which segment to aim for)
        • Positioning (the product in the mind of the customer)
    • 4. Target Market Analysis
      • What market segments are we choosing to serve
      • Why?
      • How are these segments evolving?
      • What new segments are emerging?
      • Mass marketing?
        • econ of scale
      • Micromarketing
        • clear segment
        • a Niche
        • a Locality
        • an Individual
    • 5. Concentrated (niche) & micro-marketing
      • Niche
      • commit all marketing resources to serve a single market segment
      • Attractive to small firms with limited resources and to firms offering highly specialized goods and services
      • Micro-marketing
      • target potential customers at a very basic level, such as by ZIP code, specific occupation, lifestyle, or individual household
      • WWW & Internet makes micromarketing more effective
    • 6. Trainers that meet the special needs of women and their feet.
    • 7. Market Aggregation The market
      • No segmentation
      • heterogenous customers
      • homogenous product
      • no differentiation
    • 8. Segmentation S-1 S-2 S-3 ...based on customer -based characteristics or product attributes
      • Segments must be
      • Identifiable
      • Measurable
      • Accessible, reachable
      • Substantial enough
      • Unique enough
      • Durable/stable
      • Good market segmentation
      • has internally homogenous members and
      • is externally heterogeneous
    • 9. Targeting S-1 S-2 S-3
      • Focus on segment(s)
      • providing most value
      • Pareto Principle
      • the 20% who
      • provide 80% of
      • sales value
      • Group e.g. by
      • age
      • sex
      • income
      • lifestyle
      Choice criteria?
    • 10. Value segmentation – Pareto - illustrations Brand User Loyal Switchers 20% 20% Revenue/Profits . 80% The 80/20 rule 20% 40% 20% Semi-Loyal Source: Garth Hallberg Competitive Brand User Non User of Category
    • 11. Tasks in Strategic Marketing Plans
      • Before implementing a marketing mix strategy (7Ps), identify, evaluate & select a target market.
        • Who has the purchasing power, authority & willingness to buy?
        • What specific consumer segment is most likely to buy the product?
      • Now target the market, design a programme to fit, implement it
    • 12. Positioning Low Price Consistent quality Not accessible convenient accessible Brand conscious premium A B D C
    • 13. Positioning
      • shaping the product & developing a marketing programme so that product is perceived to be (and is) different from competitors’ products.
      • Positioning map: to show differences in consumers’ perceptions of competing products
      • Reposition: marketing strategy to change a product’s position in consumers’ minds relative to positions of rival product
    • 14. B2C and B2B Goods
      • identify the purchaser + reasons for buying the goods
      • Consumer goods (B2C)
        • products & services bought by the end consumer for personal use.
      • Business goods (B2B)
        • Products/services bought to be used, directly or indirectly, to produce or supply other goods/services or for resale e.g. 5 litre tomato sauce containers for food service operators
    • 15. Bases for Market Segmentation
      • Demographic
      • Gender
      • Age
      • Family life cycle
      • Race/Ethnic group
      • Social class
      • Education
      • Income
      • Occupation
      • Family size
      • Religion
      • Home ownership
      Potential Markets Geographicn Country Region Urban/Suburban/Rural Population density City size Climate
      • Psychographic Segmentation
      • Activities
      • Interests
      • Opinions, Attitudes & Values
      • (AIO) surveys for measuring lifestyle. Lifestyles
      • Personality
      • Self-image
      • Behavioural
      • actual behavior toward product itself. A good starting point for segmentation
      • Benefits sought
      • Usage rate
      • Brand loyalty
      • User status: potential, 1st-time, regular etc.
      • Readiness to buy
      • Occasions: holidays & events that stimulate purchases
      Geo-Demographic – Ethnic .. "birds of a feather flock together"
    • 16. Decisions Affected by Segmentation Choices
      • Basis
      • Geographic
      • Demographic
      • Psychographic
      • Benefit
      • Product Usage Rates
      • Decisions
      • sales region
      • Sales force location
      • Retail location
      • Estimate segment size
      • local distribution channels or catering to different age, income & education groups
      • Product/service positioning
      • Advertising themes
      • Sales training
      • Product/service design--different models + different features
      • Advertising themes
      • Sales training
      • Special products (sizes and quality) or services
      • Frequent-user promotions
      • Special financial terms
      divides U.S. consumer into 14 groups & 66 segments. Urban Uptown Midtown Mix Urban Cores Elite Suburbs The Affluentials Middleburbs Inner Suburbs 2nd City Society City Centers Micro-City Blues Landed Gentry Country Comfort Middle America Rustic Living
    • 17. Main Inhabited Areas in Canada Geographic segmentation - Canada
      • Dividing overall market into homogeneous groups by location
      • Can identify general patterns but not all consumers in a location will make the same buying decision.
      • Major brands get 40-80% of sales from core regions
      • Climate is a segmentation factor e.g.
        • Northerners eat more soup than Southerners
        • Southerners use more swimming pool chemicals than Northerners
    • 18. % Distribution of Canadian Population by Province 2001
    • 19. Provincial and Territorial Populations, 1981, 1991, 2001 POPULATION (THOUSANDS) Source: Statistics Canada Website http://geodepot.ca/English/Pgdb/People/Population/demo05.htm. Region 1981 1991 2001 Newfoundland 568 568 513 Prince Edward Island 123 130 135 Nova Scotia 847 900 908 New Brunswick 696 724 729 Quebec 6 438 6 896 7 237 Ontario 8 625 10 085 11 410 Manitoba 1 026 1 092 1 120 Saskatchewan 968 989 979 Alberta 2 238 2 546 2 975 British Columbia 2 744 3 282 3 908 Yukon 23 28 29 Northwest Territories 46 36 37 Nunavut n/a 21 27 Canada 24 343 27 297 30 007
    • 20. Urban - Rural Population Distribution, 1871-2001
    • 21. Canada's 25 Largest Metropolitan Areas
      • Toronto
      • Montreal
      • Vancouver
      • Ottawa-Hull
      • Calgary
      • Edmonton
      • Quebec
      • Winnipeg
      • Hamilton
      • London
      • Kitchener
      • St. Catharines-Niagara
      • Halifax
      • Victoria
      • Windsor
      • Oshawa
      • Saskatoon
      • Regina
      • St. John’s
      • Chicoutimi-Jonquière
      • Sudbury
      • Sherbrooke
      • Trois-Rivières
      • Saint John
      • Thunder Bay
      1996 Population (Thousands) 4881 3512 2079 1107 972 935 693 685 681 426 432 393 359 319 314 305 231 198 176 159 157 155 142 128 125 2001 Population (Thousands) Area 4445 3359 1891 1031 852 392 698 677 650 416 403 390 347 313 292 281 222 199 178 167 166 150 144 129 131 Source: http:www.statcan.ca/english/Pgdb/People/Population/demo05.htm
    • 22. Population Projections by Age Group Demographic segmentation : dividing consumer groups by e.g. sex, age, income, occupation, education, household size & stage in family life cycle
    • 23. Family Life Cycle
      • young singles
      • young married
      • couples who remain childless,
      • single parenthood
      • parenthood (full nest)
      • post-parenthood (empty nest)
      • dissolution (separated, widowed, or divorced)
      • retirees with children still at home
      • able elderly
    • 24. Buying Patterns for Different Age Groups
      • Age Name of Age Group Merchandise bought
      • 0 - 5 Young children Baby food, toys, nursery, furniture, children’s wear
      • 6 - 19 School children Clothing, sports equipment, records, (including teenagers) school supplies, food, cosmetics, used cars
      • 20 - 34 Young adults Cars, furniture, houses, clothing,
      • recreational equipment, purchases for younger age groups.
      • 35 - 49 Younger middle-aged Larger homes, better cars, second
      • adults cars, new furniture, recreational equipment
      • 50 - 64 Older middle-aged Recreational items, presents for adults young marrieds & infants
      • 65+ Senior adults Medical services, travel, medicines, purchases for younger age groups
    • 25. Segmenting by age
      • many firms identify market segments by age
      • design products to meet specific needs of certain age groups e.g.
        • baby food, toothpaste, fashion garments, walking aids
      • sociologists attribute different consumer needs & wants across age groups to a cohort effect
      • tendency among members of a generation to be influenced & drawn together by significant events occurring in formative years e.g. age 17-22
    • 26. Demographic: The Grey Market
      • 40% of UK income, 70-80% of wealth
      • UK population split
        • 16% 50-64 years old
        • 16% 64 +
      • Grey market wealth
        • 20% well off (twice average income)
        • 40% property-rich; income poor
        • 40% poor
          • 1% in UK (15% in US) on incomes 40% lower than national average income
      • Grey market lifestyle groups WOOPIES (Well off older persons)
        • married in two person households, <75yrs, well off, 86% Investment income
        • high home & car ownership
      • OPALS (Old people with affluent lifestyles)
      • JOLLIES - Jet-setting oldies with lots of loot
    • 27. Ethnic Group Segmentation
      • USA Census Bureau
        • by 2050, nearly 50% of US population will belong to nonwhite minority groups
        • three largest & fastest-growing racial/ethnic groups African Americans, Hispanics, Asian Americans.
    • 28. Generalisation
      • … based on studying the impact of household income changes on consumer spending behaviour
      • As family income increases
      • 1. a smaller % goes on food
      • 2. the % spend on housing & household operations & clothing stays constant
      • 3. % spend on other items (such as recreation & education) increases
    • 29. Percentage Annual Expenditures by Income Groups, 1999
    • 30. Psychographic Segmentation - Lifestyles
      • decisions about how to live
      • family, job, social & consumer activities
      • Lifestyles  values & demographics
      • AIO surveys: Activities, Interests, Opinions
      • Why?
        • richer descriptions of potential target markets
        • behavioural profiles to target promotions, price etc
        • detail to match company’s image & offerings with types of consumers likely to buy
      • develop population psychographic profiles using survey instruments – see VALS - “Values and Lifestyles”
      • UK Households 23 million
      • Young NK 29.7%
        • Most affluent 4.8%
        • Mid-high affluent 11.2%
          • Farm & 4x4
          • Future families
          • Rising stars
          • MOR
          • Urbans
          • Trendy upstarts
        • Mid-low affluent 6.3%
        • Least affluent 7.4%
          • High rise hopefuls
          • Hard choices
          • Beer & crisps
          • Hand-to-mouth
      • Families 29.7%
      • Empty nesters 21.1%
      • Retired seniors 19.5%
    • 31. Geo-demographics: Lifestyle and postcodes
      • Thriving e.g. 20% of population
        • wealthy achievers (suburbs), affluent greys (rural); prosperous pensioners (retirement areas)
      • Expanding - 12%
        • affluent execs - families
      • Rising - 8%
        • affluent urbanites, better off execs in inner cities
      • Settling - 24%
        • comfortable middle-agers in suburbia
      • Aspiring 14%
        • new home owners
      • Striving (struggling?) 23%
        • older people in less prosperous areas; council estates
    • 32. Lifestyle-VALS
      • Values and Lifestyles (1978)
      • based on the idea that
        • social class, although significant , does not determine all of our values.
        • there are important value differences within a class
          • Fulfilled’s, Achievers, Experiencers all have the same level of resources. Why are they different?
          • see http://www.sric-bi.com/VALS/
    • 33. VALS TM Network Source: SRI Consulting Business Intelligence http://www.sric-bi.com/VALS/presurvey.shtml
    • 34. VALS Question
      • How would you classify yourself in terms of lifestyle profile? Your parents?
      • Note the URL below and do the VALS survey tonight.
      • Evaluate the result
      • http://www.sric-bi.com/VALS/presurvey.shtml
      • How does your VALs result represent you as a consumer? Is it a true reflection of yourself?
      • If so, for what products does it fit you - as a consumer?
    • 35. High-end watches for which life-style segments?
    • 36. Other lifestyle descriptors: McCann-Erickson Men
      • Avant Guardians
        • concerned with well-being of others rather than possessions. Well educated, self-righteous.
      • Pontificators
        • strongly held, traditional opinions. Very British and concerned with keeping others on the right path.
      • Chameleons
        • want to be contemporary to win approval. Copiers not leaders.
      • Self-Admirers
        • High self-image, young, intolerant of others, motivated by success.
      • Self-Exploiters
        • the “doers” and “self-starters”, competitive, pressured, pessimistic
      • Token Triers
        • always willing to improve their luck, but tend to try and fail.
      • Sleepwalkers
        • actively opt out, contented under achievers.
    • 37. Behaviour/product-related segmentation
      • segmentation according to the different benefits that consumers seek from the product
      • focus on ‘why’ a customer purchases rather than ‘what’
      • Benefits that we seek when we buy
        • attributes we seek in a good or service
        • benefits we expect to receive from that good or service
      • Usage rates for a product e.g.
        • heavy-, moderate-, light-user segments
      • 80/20 principle (“Pareto’s Law”) 80% of a product’s revenues comes from a relative small, loyal % of total customers
      • Consumer brand loyalty toward product e.g. AirMiles, ClubCard points
    • 38. Band-Aid offers “flex” as a benefit to consumers.
    • 39. Benefit Segmentation Applied to Yogurt Attributes of Yogurt Source: Adapted from Marco Vriens and Ter Hofseted, “Linking Attributes, Benefits, and Consumer Values,” Marketing Research, Chicago, Fall 2000, V. 12(3) pp. 4-10. Reprinted with permission by the American Marketing Association. Provides choice for family members X X Convenient to use X Tastes good X X Good quality X X X X Healthy X X X X Helps digestion X Helps diet X Spend less money X BENEFITS SOUGHT FROM YOGURT Individually packaged With fruit High- priced Mild Organic Contains bio-bifidus Low fat Low- priced
    • 40. Other segmentation categories
      • Buyer-readiness segmentation:
        • ignorance, awareness, knowledge, preference and conviction
      • Interaction segmentation:
        • different channels, payment methods, promotions & communications
      • Occasion segmentation:
        • time of day, festivals, births, marriages, deaths etc.
        • examples:
          • Whenever our daughter Jamie gets a raise, we always take her out to dinner.
          • When I’m away on business, I try to stay at a suites hotel.
          • I always buy my wife flowers on Valentine’s Day.
      • Internet usage
    • 41. Market Matching Strategies (1 of 2)
      • 1908 Early 2000s 1955 Early 2000
      • Market Single-Offer Multi-Offer Single-Offer Multi-Offer
      • Segment Strategy Strategy Strategy Strategy
      • General-Purpose Cars
      • Small Model T Focus Beetle Polo
      • Medium Model T Taurus Golf
      • Large Crown Victoria Passat
      • Sporty Cars
      • Low-Priced ZX2 Escort new Beetle
      • GTI
      • Medium-Priced Cougar Cabrio
      • Mustang Audi TT
      • Boxster
      • High-priced Jaguar XK8 Porsche
      • Aston Martin DB7 911
      PRODUCT OFFERINGS Ford Motor Company Audio/Volkswagen/Porsche
    • 42. Market Matching Strategies (2 of 2)
      • 1908 Early 2000s 1955 Early 2000s
      • Market Single-Offer Multi-Offer Single-Offer Multi-Offer
      • Segment Strategy Strategy Strategy Strategy
      • Luxury Cars
      • Medium-priced Lincoln Continental Audi A4
      • Lincoln Town Car
      • High-priced Jaguar S-Type Audi A6 Audi A8
      • Vans Windstar EuroVan
      • Econoline
      • Trucks
      • Small Model T (Truck) Ford Ranger
      • Medium Ford “F” series
      • Sport Utility Vehicles Explorer
      • (SUVs) Expedition
      • Excursion
      • Lincoln Navigator
      Ford Motor Company Audio/Volkswagen/Porsche
    • 43. Segmentation for Industrial Markets
      • Organizational Demographics
        • industry size, location, company age
      • Operating Variables
        • Technology, process
      • Purchasing Approach
        • Organization & DMU structure
      • Situational Variables
        • Order size, routine vs. customized, urgency of order
      • Personal Characteristics of Buyers
        • attitude to risk, champions
      End-Use Application Segmentation Product Segmentation Account Size and Potential Segmentation Geographic Segmentation Potential Industrial Markets
    • 44. Radio Broadcast segmentation
      • The Total Market for Radio
      The Market Segment for Radio by Age & Benefit Age Benefit Teens Middle Adults Senior Young Adult Information Entertainment Companionship This matrix is too simple. How would we classify today?
    • 45. Hypothetical Middle Adult Segment for Radio Early Retiree Hourly Employee Business Owner Professional Information X X X Entertainment X X Companionship X Desired Benefit Middle Adults
    • 46. Hypothetical Middle Adult Segment for Information Radio Early Retiree Hourly Employee Business Owner Professional Breaking news X X Political commentary X X Financial market commentary X X X Desired Information Focus Advice X X Weather X X Call-in X Gossip X Middle Adults
    • 47. Hypothetical Positioning Map: CBC versus Commercial Radio Informational Music Challenging Entertaining Commercial Talk Radio Commercial Talk Radio *As it Happens CBC local* *This Morning After Hours* *CBC News *Ideas Disc Drive* Take 5*
    • 48. Positioning of Soap “ Product Space” Representing Consumers’ Perception for Different Brands of Bar Soap Deodorant High moisturizing Nondeodorant Low moisturizing 1 2 4 5 7 8 6 3
      • Zest
      • Lever 2000
      • Safeguard
      • Dial
      • Lifebuoy
      • Lava
      • Lux
      • Dove
      • Tone
    • 49. Plot these cars on this Positioning Map
      • Honda Accord
      • Jaguar
      • Toyota Yaris
      • VW Golf
      • BMW 300 series
      • Skoda Fabia
      • Porche
      • Place other cars on the map
      • What other criteria would we add to improve the map's usefulness?
      Expensive Inexpensive Conservative Sporty Expensive Inexpensive Conservative Sporty
    • 50. Construct a Competitive Positioning Map
      • for the clothing areas of the following retailers
        • Next
        • Marks and Spencer
        • Primark
        • Miss Selfridge
        • Asda (George)
        • H&M
        • La Senza
        • Coast
    • 51. Non-profit market segmentation
      • Is segmentation for nonprofit marketers of more, less, or the same importance than for profit-oriented marketers?
      • Examples ?

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