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Seminar 4
Managing Marketing Processes
----
Identifying Market Segments and Targets:
Exploring Segmentation, Targeting, an...
Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
2
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-3
What is a Marketing Plan?
A marketing plan is the...
A marketing plan ≠ A business plan
4
Wide overview of
business, eg mission,
goals, strategy, staff,
operations, location,
...
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-5
Levels of a Marketing Plan
 Strategic
 Target m...
Marketing Plan Contents
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-6
 Executive Summary
 Tab...
Marketing Plan Group Assignment
 Assume role of a “marketing manager” and
select an existing Swedish company within a
spe...
75–80%75–80% of new products being launched fail.
Common reasons are:
 The idea is good, but the market share isThe idea ...
Marketing Plan Teams
9
MGM MARKETING - MARKETING PLAN
FALL 2013  
GROUPS PREFERENCES COMPANY
DRAGON B2C (Fortune 500) Prod...
Presentations
 September 13, 9:15-12:00 Initial Presentation
 Max 10 minute presentation by each Team
 5 minutes for di...
Passport Gmid
 Euromonitor International
 Global Market Information Database
 Market statistics on industries, countrie...
Final Report – October 4, 17:00
 15 pages Plan + 3 pages Accounting Appendix in MS Word Doc
 Not including title page, e...
Independent Research – Get Started Now
 Start researching
 Use library’s databases and library staff
 Determine what da...
Swedish Company and Industry Info
 International: Orbis and Factiva
 Swedish specific (In Swedish): Retriever and
Affärs...
15
Friday Assignment – Marketing Plan
 What do you think the marketing plan needs to accomplish in order to lead
the company...
Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
17
Aqualisa
 What is the Quartz value proposition to plumbers? To
consumers?
 Why is the Quartz shower not selling?
 Aqual...
Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
19
http://en.wikipedia.org/wiki/Henry_Ford
Ford’s Model T: Mass Market Approach
Any customer can have a
car painted any color...
CHP: 8&10-21
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Devel...
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-22
What is a Market Segment?
A market segment consi...
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-23
Approaches to Segmenting Consumer Markets
Geogra...
Geographic Segmentation
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-24
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-25
Demographic Segmentation
 Age and family size, ...
Age and Lifecycle Stage
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-26
Gender and Income
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-27
Generational Influences
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-28
Nationality, Race and Culture
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-29
Psychographic Segmentation:
the VALS (Values, Attitudes, Lifestyles)
Framework
Copyright © 2011 Pearson Education, Inc.
Pu...
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-31
Approaches to Segmenting Consumer Markets
Geogra...
Rising Interest in Ethnography
“Ethnography or observational research has
drawn significant attention recently, not only i...
CHP: 8&10-33
Behavioral Segmentation
Decision Roles
 Initiator
 Influencer
 Decider
 Buyer
 User
Behavioral Variables...
CHP: 8&10-34
Behavioral Segmentation Breakdown
GFE Associates: Analysis of Attitudinal
Clusters in U.S. Television Households
35
CHP: 8&10-36
Segmenting for Business Markets
Demographic segmentation
– Industry, company size, location
Operating variabl...
CHP: 8&10-37
Size, purchasing power, profiles
of segments can be measured.
Segments can be effectively
reached and served....
CHP: 8&10-38
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Devel...
CHP: 8&10-39
Market Targeting
Evaluating Market Segments
 Segment Size and Growth
 Analyze current sales, growth rates a...
CHP: 8&10-40
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segme...
Targeting Strategies
41
http://www.globalspec.com/reference/47105/203279/undifferentiated-concentrated-and-
differentiated...
CHP: 8&10-42
Patterns of Target Market Selection
CHP: 8&10-43
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Devel...
Diffusion of Innovation - Rogers
44http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png
Crossing the Chasm - Moore
45http://www.10xfactor.com/Bookstore_Ten_Best_Book5.html
Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
46
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Managing Marketing Processes_Seminar 4

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Fourth seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics, http://www.hhs.se/EDUCATION/MSC/MSCGM/Pages/default.aspx

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Managing Marketing Processes_Seminar 4

  1. 1. Seminar 4 Managing Marketing Processes ---- Identifying Market Segments and Targets: Exploring Segmentation, Targeting, and Positioning Robin Teigland Master of General Management Stockholm School of Economics September 10, 2013
  2. 2. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 2
  3. 3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-3 What is a Marketing Plan? A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical level. McDonald, M. (2006) Strategic Marketing Planning: Theory and Practice, The Marketing Review, 6, 375-418.
  4. 4. A marketing plan ≠ A business plan 4 Wide overview of business, eg mission, goals, strategy, staff, operations, location, marketing, financial Often used as financial tool to see if business viable Business Plan Marketing Plan Details actions to fulfill mission and goals. Identifies business price points, target markets, and competition and explains how business generates customers http://smallbusiness.chron.com/difference-between-marketing-business-plan-1682.html But they are interdependent!
  5. 5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-5 Levels of a Marketing Plan  Strategic  Target marketing decisions  Value proposition  Analysis of marketing opportunities  Tactical  Product features  Promotion  Merchandising  Pricing  Sales channels  Service
  6. 6. Marketing Plan Contents Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-6  Executive Summary  Table of Contents  Situation Analysis  Marketing Opportunity Assessment  Marketing Strategy  Financial and Marketing Goals and Budgets  Implementation and Controls  References
  7. 7. Marketing Plan Group Assignment  Assume role of a “marketing manager” and select an existing Swedish company within a specified industry  Develop a marketing plan for a product or service not currently offered by your company to be launched on the Swedish market  Completely new-to-the-world or can be new just to your company.  Write a comprehensive marketing plan profiling the competitive strategy to bring that product or service to the Swedish market. 7
  8. 8. 75–80%75–80% of new products being launched fail. Common reasons are:  The idea is good, but the market share isThe idea is good, but the market share is overratedoverrated..  The product itself is not developed enough.  The new product is badly positioned on the market, not well-known enough, is priced too high or has the ”wrong” packaging.  The management wants to see their favourite ideas become products against all market research.  Developing costs are higher than anticipated.  Competitors put up more of a fight than anticipated. GfK 2012
  9. 9. Marketing Plan Teams 9 MGM MARKETING - MARKETING PLAN FALL 2013   GROUPS PREFERENCES COMPANY DRAGON B2C (Fortune 500) Product H&M OPERATION BRAHMA  B2B SME (<250) Product VETROLIFE ORANGE B2C SME (<250) Product  ASSESSIO PEAK PERFORMANCE B2B SME Service TENANT & PARTNER THE MOJITOS B2C (Fortune 500) Service SPOTIFY THE TRANSFORMERS B2C SME Services LINAS MATKASSE
  10. 10. Presentations  September 13, 9:15-12:00 Initial Presentation  Max 10 minute presentation by each Team  5 minutes for discussion by Feedback Team  Upload Feedback1_Team#.doc to Courseweb and email to respective team by September 13, 17:00  September 26, 9:15-13:00 Final Presentation  Max 10 minute presentation by each Team  5 minutes for discussion by Feedback Team  Upload Feedback2_Team#.doc (3 page max Word doc) to Courseweb and email to your respective team by September 27, 17:00
  11. 11. Passport Gmid  Euromonitor International  Global Market Information Database  Market statistics on industries, countries and consumers (8 million +)  Market reports, company reports and country reports (18 000 +) Excellentresource!!
  12. 12. Final Report – October 4, 17:00  15 pages Plan + 3 pages Accounting Appendix in MS Word Doc  Not including title page, executive summary, table of contents, references or other appendices  Single-spaced, 12 Times Roman, numbered pages, 2.54 margins  All sources documented in proper manner  See www.plagiarism.org for more information on how to cite and document sources.  The marketing plan is evaluated according to three criteria:  Professional Written and Oral Communications  Critical Thinking Involving Analysis and Understanding of Theoretical Concepts and Frameworks that Build Your Argument  Creative and Original Content yet Feasible Plan  Integration with Using Accounting Reports  Separate 3 page Appendix evaluating financial consequences of proposed marketing plan: detailed month-to-month analysis of impact on company’s financial statements and quantitative evaluations of the proposed investment using capital budgeting techniques covered in “Using Accounting Reports”.  Each group member contributes to the assignment in fair proportion 12
  13. 13. Independent Research – Get Started Now  Start researching  Use library’s databases and library staff  Determine what data you need to collect and how  Databases, Qualtrics, focus groups, interviews, etc.  Contact any relevant people  Follow related topics on twitter: marketing, industry product, etc.  Blog, tweet, post, etc. about what you find  #SSEMGM2013  Share with one another! 13
  14. 14. Swedish Company and Industry Info  International: Orbis and Factiva  Swedish specific (In Swedish): Retriever and Affärsdata  Under Company Databases in library  Company information, e.g., annual reports for past 10 years  Similar in number of companies in database  Retriever is more user friendly than Affärsdata  Own sector classification vs SIC for Affärsdata  Can filter search better  Creates reports in PDF or Excel  Both have extensive news/article database  Affärsdata has better coverage, e.g., Veckans Affärer  Retriever has Svenska Dagbladet och Dagens Industri 14
  15. 15. 15
  16. 16. Friday Assignment – Marketing Plan  What do you think the marketing plan needs to accomplish in order to lead the company closer to its strategic goals?  Develop an initial idea for a product/service that you would like to launch for this company on the Swedish market. Motivate your choice of this product.  What do you need to do to develop an understanding of the markets and potential customers of your product? What market research do you need to conduct? What steps will you take to do this?  What are your initial ideas for STP for this product?  What are your next steps in order to plan the direction, objectives, and marketing support for the marketing plan? 16
  17. 17. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 17
  18. 18. Aqualisa  What is the Quartz value proposition to plumbers? To consumers?  Why is the Quartz shower not selling?  Aqualisa spent three years and €5.8 million developing the Quartz. Was the product worth the investment? Is Quartz a niche product or a mainstream product?  What should Harry Rawlinson do to generate sales momentum for the Quartz product? Should he change his marketing strategy to target consumers directly, target the DIY market, or target developers? Should he lower the price of the Quartz? Or should he do something different altogether? 18
  19. 19. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 19
  20. 20. http://en.wikipedia.org/wiki/Henry_Ford Ford’s Model T: Mass Market Approach Any customer can have a car painted any color that he wants so long as it is black. -Ford in his autobiography
  21. 21. CHP: 8&10-21 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
  22. 22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-22 What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants.
  23. 23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-23 Approaches to Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 1. Descriptive: Start with consumer and then look at needs 2. Behavior & Attitudes: Start with product and then look at descriptives
  24. 24. Geographic Segmentation Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-24
  25. 25. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-25 Demographic Segmentation  Age and family size, lifecycle  Gender  Income  Occupation  Education  Religion  Race  Generation  Social class  Nationality, race and culture
  26. 26. Age and Lifecycle Stage Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-26
  27. 27. Gender and Income Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-27
  28. 28. Generational Influences Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-28
  29. 29. Nationality, Race and Culture Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-29
  30. 30. Psychographic Segmentation: the VALS (Values, Attitudes, Lifestyles) Framework Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-30 http://en.wikipedia.org/wiki/VALS Divide into different groups based on psychological/personality traits •Lifestyle • E.g., culture, sports, outdoor •Personality • E.g., compulsive, authoritarian
  31. 31. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-31 Approaches to Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 1. Descriptive: Start with consumer and then look at needs 2. Behavior & Attitudes: Start with product and then look at descriptives
  32. 32. Rising Interest in Ethnography “Ethnography or observational research has drawn significant attention recently, not only in the market research and marketing fields but in the mass media as well …all starts by doing something simple – keenly watching consumers, fact to face, knee to knee and listening, with ears, eyes, heart, brain and your intuitive sixth sense.” Procter & Gamble ex-CEO A.G. Lafley Tesco: http://www.youtube.com/watch?v=fGaVFRzTTP4
  33. 33. CHP: 8&10-33 Behavioral Segmentation Decision Roles  Initiator  Influencer  Decider  Buyer  User Behavioral Variables  Occasions  Benefits  User Status  Usage Rate  Buyer-readiness  Loyalty Status  Attitude
  34. 34. CHP: 8&10-34 Behavioral Segmentation Breakdown
  35. 35. GFE Associates: Analysis of Attitudinal Clusters in U.S. Television Households 35
  36. 36. CHP: 8&10-36 Segmenting for Business Markets Demographic segmentation – Industry, company size, location Operating variables – Technology, usage status, customer capabilities Purchasing approaches – Purchasing-function, power structure, nature of existing relationships, general purchase policies, purchasing criteria Situational factors – Urgency, specific application, size of order Personal characteristics – Buyer-seller similarity, attitudes toward risk, loyalty
  37. 37. CHP: 8&10-37 Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. MeasurableMeasurable AccessibleAccessible SubstantialSubstantial DifferentialDifferential ActionableActionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments. Effective Segmentation Criteria
  38. 38. CHP: 8&10-38 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
  39. 39. CHP: 8&10-39 Market Targeting Evaluating Market Segments  Segment Size and Growth  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 (five forces).  Company Objectives and Resources  Company skills & resources needed to succeed in that segment(s).  Look for Competitive Advantages.
  40. 40. CHP: 8&10-40 Segment 1Segment 1 Segment 2Segment 2 Segment 3Segment 3 Segment 1Segment 1 Segment 2Segment 2 Segment 3Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 MarketMarket A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing Market Targeting Market Coverage Strategies
  41. 41. Targeting Strategies 41 http://www.globalspec.com/reference/47105/203279/undifferentiated-concentrated-and- differentiated-targeting-strategies
  42. 42. CHP: 8&10-42 Patterns of Target Market Selection
  43. 43. CHP: 8&10-43 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
  44. 44. Diffusion of Innovation - Rogers 44http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png
  45. 45. Crossing the Chasm - Moore 45http://www.10xfactor.com/Bookstore_Ten_Best_Book5.html
  46. 46. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 46

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