M A R K E T S E G M E N T A T I O N, T A R G E T I N G A N D P O S I T I O N I N GPresentation Transcript
Market Segmentation, Targeting, and Positioning for Competitive Advantage
Steps in Market Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
Step 1. Market Segmentation Levels of Market Segmentation Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Mass Marketing Same product to all consumers (no segmentation, i.e Tomato Seller) Segment Marketing Different products to one or more segments (some segmentation, i.e. Marriot)
Is mass marketing dead?
Take a position:
Mass marketing is dead.
2. Mass marketing is still a viable way to build
a profitable brand.
Ford’s Model T Followed a Mass Market Approach
Toyota Scion Targets Gen Y Consumers
Step 1. Market Segmentation Levels of Market Segmentation Niche Marketing Different products to subgroups within segments (more segmentation, i.e. Standard or Luxury Cars) Micromarketing Products to suit the tastes of individuals and locations (complete segmentation,boutiques) Local Marketing Tailoring brands/ promotions to local customer groups, i.e KFC Individual Marketing Tailoring products and programs to the needs of individual customers, i.e. Dell
Step 1. Market Segmentation Geographic Segmentation Density or Climate City or Metro Size World Region or Country
Analyze current sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness
Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.
Company Objectives and Resources
Company skills & resources needed to succeed in that segment(s).
Look for Competitive Advantages.
Step 2. Market Targeting Market Coverage Strategies Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing
Step 2. Market Targeting Choosing a Market-Coverage Strategy Company Resources Product Variability Product’s Stage in the Life Cycle Market Variability Competitor’s Marketing Strategies
Socially Responsible Target Marketing
Smart targeting helps companies and consumers alike.
Target marketing sometimes generates controversy and concern.
Disadvantaged and vulnerable can be targeted.
Cigarette, beer, and fast-food marketers have received criticism in the past.
Internet has come under attack because of the loose boundaries and lack of control in marketing practices.
Step 3. Choosing a Positioning Strategy
Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.
Plan positions to give their products the greatest advantage in selected target markets,
Design marketing mixes to create these planned positions.
Step 3. Choosing a Positioning Strategy Step 1. Identifying Possible Competitive Advantages Step 2. Selecting the Right Competitive Advantage Step 3. Communicating and Delivering the Chosen Position
Identifying Possible Competitive Advantages
Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value.
Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,
Identifying Possible Competitive Advantages Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services Product Differentiation i.e. Features, Performance, Style & Design, or Attributes Image Differentiation i.e. Symbols, Atmospheres, Events Personnel Differentiation i.e. Hiring, Training Better People Than Competitors Do
Choosing the Right Competitive Advantages Criteria For Determining Which Differences To Promote Affordable Superior Profitable Preemptive Distinctive Important Communicable Unique Selling Proposition
Selecting an Overall Positioning Strategy Benefits Price More The same Less More The Same Less More for More e.g: mont blanc, mercedes More for the Same e.g: lexus MORE FOR LESS e.g: zong, maggi vsknorr The same for less e.g: dell, wal mart, imtiaz store Less for much less e.g: marriot vs. resturants, emirates vs. PIA
Selecting an Overall Positioning Strategy
The five green cells represent winning value propositions-differentiation and positioning that gives the company competitive advantages.
The red cells represents losing value propositions.
The center yellow cell represents at best a marginal proposition.
Communicating and Delivering the Chosen Position
Once position is chosen, company must take strong steps to deliver and communicate the desired position to target consumers.
All the company’s marketing mix must support the positioning strategy.
Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies.
Positioning statement vs tagline
they are two branding components.
The positioning statement is usually longer and more detailed than a tagline. It will quite often borrow from the mission statement, the value statement, the vision statement
It is an integral part of the brand platform, and drives the direction of the creative process when developing brand elements – name, tagline, logo, graphic standards, trade dress, brand messaging and packaging.
It is possible for some positioning statements to be voiced as a tagline as well, but this will be a rare occurrence.
the positioning statement precedes the development of brand elements
It is usually a paragraph in length rather than a short phrase.
The tagline crystallizes and is usually connected to the name and logo as part of the company/product identification.