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

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    1. 1. Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers
    2. 2. <ul><li>Consistent with the premises of the marketing concept and customer orientation </li></ul><ul><li>Enables the firm to focus its marketing resources </li></ul><ul><li>Helps the marketing firm gain strong competitive advantages through expertise in serving specific customer segments </li></ul>Benefits of Segmentation:
    3. 3. Steps in Market Segmentation, Targeting, and Positioning Figure 6.1
    4. 5. Using the “Correct” Segmentation Bases
    5. 6. Market Segmentation <ul><li>Best to use multiple approaches in order to identify smaller, better-defined target groups. </li></ul><ul><li>Start with a single base and then expand to other bases. </li></ul>
    6. 7. Application of Multi-Stage Segmentation (Banyan Tree Example) Figure 6.3
    7. 8. Segmenting Business Markets <ul><li>Consumer and business markets use many of the same variables for segmentation. </li></ul><ul><li>Business marketers can also use: </li></ul>Operating Characteristics Purchasing Approaches Personal Characteristics Situational Factors
    8. 9. Segmenting International Markets Factors Used: Geographic Location Economic Factors Political and Legal Factors Cultural Factors Intermarket Segmentation
    9. 10. Inter-market Segmentation Teens show surprising similarity no matter where in the world they live. For instance, this teen could live almost anywhere. Thus, many companies target teenagers with worldwide marketing campaigns.
    10. 11. Requirements for Effective Segmentation Measurable Accessible Substantial Differentiable Actionable
    11. 12. Evaluating Market Segments <ul><li>Segment Size and Growth </li></ul><ul><ul><li>Analyze current segment sales, growth rates, and expected profitability. </li></ul></ul><ul><li>Segment Structural Attractiveness </li></ul><ul><ul><li>Consider effects of: competitors, existence of substitute products, and the power of buyers & suppliers. </li></ul></ul><ul><li>Company Objectives and Resources </li></ul><ul><ul><li>Examine company skills & resources needed to succeed in that segment. </li></ul></ul><ul><ul><li>Offer superior value and gain advantages over competitors. </li></ul></ul>
    12. 13. Determining Market Segment Attractiveness Figure 6.4
    13. 14. Target Marketing Strategies Figure 6.5
    14. 15. Undifferentiated Marketing <ul><li>Focus is on common (not different) needs of consumers. </li></ul><ul><li>Product and marketing program are geared to the largest number of buyers. </li></ul><ul><li>Uses mass advertising and distribution. </li></ul>
    15. 16. Differentiated Marketing <ul><li>Firm targets several market segments and designs separate offers for each. </li></ul><ul><li>The goal is to have higher sales and a stronger position with each market segment. </li></ul><ul><li>This approach increases the costs of doing business. </li></ul>
    16. 17. Concentrated Marketing <ul><li>The focus is acquiring a large share of one or a few segments of niches. </li></ul><ul><li>Generally, there are fewer competitors. </li></ul><ul><li>The Internet is ideal for targeting small niche markets. </li></ul><ul><li>There is some risk in focusing on only one market. </li></ul>
    17. 18. Micromarketing <ul><li>Tailoring products and marketing programs to suit the tastes of specific individuals and locations. </li></ul><ul><ul><li>Local Marketing : Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores. </li></ul></ul><ul><ul><li>Individual Marketing : Tailoring products and marketing programs to the needs and preferences of individual customers. </li></ul></ul>
    18. 19. Choosing a Market Coverage Strategy Company Resources Product Variability Product’s Life-Cycle Stage Market Variability Competitors’ Marketing Strategies Factors to Consider:
    19. 20. Socially Responsible Target Marketing <ul><li>Smart targeting helps both companies and consumers. </li></ul><ul><li>Target marketing sometimes generates controversy and concern. </li></ul><ul><ul><li>Vulnerable and disadvantaged can be targeted. </li></ul></ul><ul><ul><li>Cereal, cigarette, beer, and fast-food marketers have received criticism. </li></ul></ul><ul><ul><li>Internet has raised fresh concerns about potential targeting abuses. </li></ul></ul>
    20. 21. Positioning for Competitive Advantage <ul><li>Product’s position is the way the product is defined by consumers on important attributes. </li></ul><ul><li>The place the product occupies in consumers’ minds relative to competing products. </li></ul>
    21. 22. Positioning Map Figure 6.6
    22. 23. Product vs Brand Positioning Figure 6.7
    23. 24. Choosing a Positioning Strategy #1 Identify a set of possible competitive advantages on which to build a position #2 Choose the right competitive advantages #3 Select an overall positioning strategy Must effectively communicate and deliver position to market
    24. 25. Identifying Possible Competitive Advantages <ul><li>Key to winning target customers is to understand their needs better than competitors do and to deliver more value. </li></ul><ul><li>Competitive advantage – extent to which a company can position itself as providing superior value. </li></ul>
    25. 26. Identifying Possible Competitive Advantages Product Differentiation (e.g., consistency, durability, reliability, repairability ) Services Differentiation (e.g., speed, convenience, careful delivery) Channel Differentiation Image Differentiation (e.g., convey benefits and positioning) People Differentiation (e.g., hiring, training better people than competitors)
    26. 27. Positioning Errors <ul><li>Underpositioning: </li></ul><ul><ul><li>Failing to really position the company at all. </li></ul></ul><ul><li>Overpositioning: </li></ul><ul><ul><li>Giving buyers too narrow a picture of the company. </li></ul></ul><ul><li>Confused Positioning: </li></ul><ul><ul><li>Leaving buyers with a confused image of a company. </li></ul></ul>
    27. 28. Choosing Right Competitive Advantages Affordable Superior Profitable Preemptive Distinctive Important Communicable Unique Selling Proposition
    28. 29. Which Differences to Promote? Unilever positioned its bestselling Lever 2000 soap on three benefits in one: cleansing, deodorizing, and moisturizing benefits. It’s good “for all of your 2000 parts.”
    29. 30. Possible Value Propositions Figure 6.8
    30. 31. Value Proposition “ Much more for much more” value proposition: Häagen-Dazs offers its super-premium ice cream at a price never before charged.
    31. 32. Communicating and Delivering the Chosen Position <ul><li>Company must take strong steps to deliver and communicate the desired position to target consumers. </li></ul><ul><li>The marketing mix efforts must support the positioning strategy. </li></ul><ul><li>Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies. </li></ul>
    32. 33. Shifting Market Positioning Over Time
    33. 34. Positioning and the Marketing Mix