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Chapter 08 MKT120 STP

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Chapter 08 MKT120 STP

  1. 1. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  2. 2. Learning Objectives LEARNING OBJECTIVES How does a firm decide what type of segmentation strategy to use? What is the best method of segmenting a market? How do firms determine whether a segment is attractive? What is positioning and how do firms do it? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-2
  3. 3. Coke ZeroWhy a newDiet Soda? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-3
  4. 4. Segmentation, Targeting, Positioning Process© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-4
  5. 5. Step 1: Establish Overall Strategy or Objectives Derived from mission Derived from mission Check Yourself Check Yourself and current state and current state © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-5
  6. 6. Segmentation Strategy© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-6
  7. 7. A firm’s segmentation strategy must be consistent with and derived from the firm’s_______________, as well as its current situation. A. perceptual map B. disclosure statement C. mission and objectives D. self-concept E. lifestyle © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-7
  8. 8. Step 2: Describe Segments© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-8
  9. 9. Geographic Segmentation© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-9
  10. 10. Demographic Segmentation U.S. Census Bureau Website© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-10
  11. 11. Demographic segmentation is the most common basis ofconsumer market segmentation, because these segments are: A. easy to define and usually easy to reach. B. psychographically distinct. C. self-value, self-contained segments. D. defined by the benefits consumers’ receive. E. all of the above. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-11
  12. 12. Balancing Act Career Moms© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-12
  13. 13. Psychographic Segmentation© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-13
  14. 14. VALS Framework VALS Website© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-14
  15. 15. Benefit Segmentation© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-15
  16. 16. Geodemographic Segmentation Claritas Website© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-16
  17. 17. State Farm Not Insuring Mississippi © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-17
  18. 18. Loyalty SegmentationMuch cheaper to keep anMuch cheaper to keep an Lifetime value Lifetime value existing customer existing customer © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-18
  19. 19. One of the reasons marketers utilize_______________ segmentation is the high cost of finding new customers. A. geographic B. benefit C. psychographic D. loyalty E. geodemographic © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-19
  20. 20. Step 3: Evaluate Segment Attractiveness© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-20
  21. 21. Identifiable• Who is in their market?• Are the segments unique?• Does each segment require a unique marketing mix? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-21
  22. 22. Substantial Too small and it is insignificant Too big and it might need it’s own store © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-22
  23. 23. Reachable© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-23
  24. 24. Responsive Customers must:© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-24
  25. 25. Profitable© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-25
  26. 26. Profitable Segments  Segment size = 60 million (<15 yrs)  Segmentation Adoption Percentage = 35%  Purchase Behavior = $500 x 1 time purchase  Profit margin % = 10%Is this segment profitable? Is this segment profitable?  Fixed Cost = $50M © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-26
  27. 27. Step 4: Selecting a Target Market How does Hallmark select target markets? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-27
  28. 28. Segment Attractiveness© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-28
  29. 29. Step 5: Identify and Develop Positioning Strategy© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-29
  30. 30. Step 5: Identify and Develop Positioning Strategy© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-30
  31. 31. Value  Meet Grandpa Tony, now retired:  He knows the price of everything.  He clips coupons.  He goes to multiple stores to get the best price.  He is willing to pay more for quality.  He trusts brand names.© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-31
  32. 32. Value Meet Celia, college freshman: Reasons for her college choice: Close to home. Good academic reputation. Good financial aid package. Did we mention cute guys? © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-32
  33. 33. Symbol© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-33
  34. 34. Competition© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-34
  35. 35. Positioning© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-35
  36. 36. When selecting a target market, a marketer should:A. determine a customer’s objective.B. describe past market segments.C. evaluate the attractiveness of each consumer.D. Match the firm’s competency with a market segment’s attractiveness.E. identify a positioning strategy. © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-36
  37. 37. Positioning Steps© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-37
  38. 38. Perceptual Maps© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-38
  39. 39. Repositioning© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-39
  40. 40. GlossaryBenefit segmentation groups consumers on the basis of the benefits they derive from products or services. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-40
  41. 41. GlossaryDemographic segmentation groups consumers according to easily measured, objective characteristics such as age, gender, income, and education. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-41
  42. 42. GlossaryGeodemographic segmentation uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-42
  43. 43. GlossaryGeographic segmentation organizes customers into groups on the basis of where they live. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-43
  44. 44. GlossaryLoyalty segmentation classifies customers by whether they buy almost exclusively from the firm. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-44
  45. 45. Check Yourself 1. Identify the steps in the segmentation process 2. What are the four segmentation strategies? 3. What are the various segmentation methods? 4. Identify four positioning strategies.© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-45
  46. 46. Check Yourself 1. What is a perceptual map? 2. Identify the five positioning steps.© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-46
  47. 47. GlossaryPsychographic segmentation, or psychographics, allows people to describe themselves using characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine these choices. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-47
  48. 48. GlossaryThe Value and Lifestyle Survey (VALS) is a psychographic tool that classifies consumers into eight categories based on their answers to a questionnaire. Return to slide © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8-48

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