Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Unit2 market segmentation2


Published on

Published in: Business
  • Be the first to comment

Unit2 market segmentation2

  1. 1. Unit 2 Principles of Marketing Market Segmentation (Targeting & Positioning) Subhajit Sanyal
  2. 2. STP Marketing recap… <ul><li>SEGMENTING </li></ul><ul><li>Consider variables for segmenting market. </li></ul><ul><li>Look at profile of emerging segments. </li></ul><ul><li>Validate segments emerging. </li></ul><ul><li>TARGETING </li></ul><ul><li>Decide on targeting strategy. </li></ul><ul><li>Decide which and how many segments should </li></ul><ul><li>be targeted. </li></ul><ul><li>POSITIONING </li></ul><ul><li>Understand consumer perceptions. </li></ul><ul><li>Position products in the mind of the consumer. </li></ul><ul><li>Design appropriate marketing mix. </li></ul>
  3. 3. Market Coverage Strategies Undifferentiated Strategy Marketing Mix Entire Market Concentrated Strategy Marketing Mix Target Market Differentiated Strategy Marketing Mix Segment 1 Marketing Mix Segment 2 Marketing Mix Segment 3
  4. 4. Target market selection <ul><li>Single segment concentration (eg. Volkswagen -Porche </li></ul><ul><li>Selective specialization (e.g New york’s KISS FM </li></ul><ul><li>Product specialization ( eg. –Microscope) </li></ul><ul><li>Market specialization (assortment of products to various University labs. </li></ul><ul><li>Full market coverage (Coke ,IBM) </li></ul>
  5. 5. Target Marketing Strategies <ul><li>Undifferentiated marketing </li></ul><ul><li>Differentiated marketing </li></ul><ul><li>Concentrated/Focused marketing </li></ul><ul><li>Customized marketing (Levis, Mattel, De beers) </li></ul>
  6. 6. Undifferentiated Marketing Marketing mix Whole market
  7. 7. Differentiated Marketing Marketing mix 1 Marketing mix 2 Marketing mix 3 Segment 1 Segment 2 Segment 3
  8. 8. Concentrated/ Focused Marketing Segment 1 Segment 2 Segment 3 Marketing mix
  9. 9. Customized Marketing Marketing mix 1 Marketing mix 2 Marketing mix 3 Customer 1 Customer 2 Customer 3
  10. 10. Positioning Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
  11. 11. <ul><li>“ Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person… But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect..” (Al Ries & Jack Trout) </li></ul><ul><li>The process of creating an image for a product in the mind of target customers </li></ul>Positioning
  12. 12. Position The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings.
  13. 13. Product Differentiation A positioning strategy that some firms use to distinguish their products from those of competitors.
  14. 14. Characteristics of positioning <ul><li>Positioning is a facilitating process that coordinates marketing functions. </li></ul><ul><li>Positioning strategy can be applied to both micro and macro levels of marketing. </li></ul><ul><li>The position a customer perceives for a product may be based on the product’s physical features or intangible images created by the company’s promotional efforts. </li></ul><ul><li>To be effective positioning must be consumer oriented. </li></ul>
  15. 15. Keys to successful positioning Consistency Clarity Credibility Competitiveness Successful positioning
  16. 16. Perceptual mapping to establish (product) position Perceptual mapping is a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
  17. 17. Developing perceptual maps <ul><li>Identify a set of competing brands </li></ul><ul><li>Identify important attributes </li></ul><ul><li>That consumers use when choosing between brands using qualitative research </li></ul><ul><li>Conduct quantitative marketing research where consumers score each brand on all key attributes </li></ul><ul><li>Plot brands on a two dimensional brands </li></ul>
  18. 18. Tools for drawing perceptual maps… <ul><li>Experiential basis (stereotypes..) </li></ul><ul><li>Market research (consumer surveys; focus groups etc.) Qualitative as well as quantitative. </li></ul><ul><li>With tools such as – </li></ul><ul><ul><li>Multi dimensional scaling techniques </li></ul></ul><ul><ul><li>Discriminant analysis </li></ul></ul>
  19. 19. Perceptual Mapping – Levi’s Red Tab Basics High Price Low Price Classic Designer Old product New product Vintage Red Line Silver Tab Slates Dockers Premium Dockers Classics 501 Red Tab Dry Goods L2 Red Tab Elesco
  20. 20. Positioning Strategies <ul><li>Positioning strategies are designed to answer </li></ul><ul><li>2 basic questions: </li></ul><ul><li>Against whom should you position? </li></ul><ul><li>How should you position? </li></ul>
  21. 21. Positioning Strategy-What does it mean? <ul><li>Developing a favourable image in the mind of consumers that differentiates the organisation from its competitors </li></ul><ul><ul><li>Focus on intangible element, as tangible element difficult to differentiate </li></ul></ul><ul><li>Ensuring that target markets clearly understand what the service, product or brand stands for </li></ul><ul><li>Establishing a match between the benefits sought by the consumer, the company’s strengths and its competitors weaknesses </li></ul>
  22. 22. Steps in positioning Step 1: Identify product positions <ul><li>To identify a product’s existing or desired position, we need to understand the product and the consumer. </li></ul><ul><li>A product can be described – </li></ul><ul><ul><li>physically with respect to its function or its sensory or physiological characteristics; </li></ul></ul><ul><ul><li>Socially in terms of the social uses to which it can be put; or </li></ul></ul><ul><ul><li>Psychologically in terms of its use in expressing human emotions, desires or behaviours. </li></ul></ul>
  23. 23. Step 2: Identify positioning bases Attribute Price and Quality Use or Application Product User Product Class Competitor Positioning Bases
  24. 24. Positioning bases contd. <ul><li>Product characteristics and customer benefits: they tell us how the customer is going to be benefited by the attributes of the product. </li></ul><ul><li>Price quality: this positioning approach is based on the notion of giving value through quality products sold at low prices. </li></ul><ul><li>Product use: this associates the product with a use. </li></ul>
  25. 25. <ul><li>Product user: this is association of a product with a user or user type. </li></ul><ul><li>Product class: some products may benefit by positioning themselves within a product class </li></ul><ul><li>Symbols: the use of symbols to position brands. </li></ul><ul><li>Competition positioning </li></ul>Positioning bases contd.
  26. 26. Steps 3: Selecting a position <ul><li>Factors to consider when selecting the basis for a position – </li></ul><ul><ul><li>The market position: is the product a leader, no. 2, or one of the small brands </li></ul></ul><ul><ul><li>The positioning used by current competitors. </li></ul></ul><ul><ul><li>Compatibility of the desired positioning with consumers’ needs, wants and current perception of the product’s positioning versus its competitors, and a given product class. </li></ul></ul>
  27. 27. Selecting a position contd. <ul><ul><li>The newness of the considered basis for positioning and its departure from the current practice in the market. </li></ul></ul><ul><ul><li>The resources available to communicate the positioning effectively and the compatibility of the positioning with the firm’s marketing strategy </li></ul></ul><ul><ul><li>The firm’s desire for an innovative image rather than a “me-too” image. </li></ul></ul><ul><ul><li>The firm’s ability to execute the chosen positioning effectively and creatively; and </li></ul></ul><ul><ul><li>The legality of the proposed positioning. </li></ul></ul>
  28. 28. <ul><li>To communicate a co. or brand positioning a marketing plan should include a positioning statement, viz; To (target group and need) our (Brand) is (concept) that (point-of-difference). E.g. - </li></ul><ul><ul><li>“ To busy professionals who need to stay organized , Palm Pilot is an electronic organizer that allows you to back-up files on your PC more easily and reliably than competitive products” . </li></ul></ul>Step 4: Communicating a position
  29. 29. Repositioning Changing consumers’ perceptions of a brand in relation to competing brands. Q: How is repositioning accomplished?
  30. 30. Repositioning <ul><li>Reasons For Repositioning </li></ul><ul><li>Falling sales </li></ul><ul><li>An opportunity to serve an emerging market </li></ul><ul><li>The threat of competition eroding market share </li></ul><ul><li>Dangers </li></ul><ul><li>Sending confusing signals </li></ul><ul><li>Losing existing customers </li></ul><ul><li>May require change in personnel </li></ul>
  31. 31. Repositioning strategies PRODUCT Same Different TARGET MARKET Same Different Image repositioning Intangible repositioning Product repositioning Tangible repositioning
  32. 32. Choosing a Market Coverage Strategy <ul><li>Several factors to consider </li></ul><ul><li>Company resources </li></ul><ul><li>Degree of product homogeneity </li></ul><ul><li>Market homogeneity </li></ul><ul><li>Competitors’ strategies </li></ul>
  33. 33. The Gradual Change of McDonald’s Marketing Strategy <ul><li>The example of McDonald’s shows a typical development in the marketing approach of various companies (in Kotler et al, 1999) </li></ul>1 MASS MARKETING 2 PRODUCT VARIETY MARKETING 3 TARGET MARKETING
  34. 34. The Gradual Change of McDonald’s Marketing Strategy <ul><li>Mass Marketing </li></ul><ul><li>Featured by mass production, mass distribution and mass promotion of one product to all buyers </li></ul><ul><li>Firms benefit from economies of scale </li></ul><ul><li>EXAMPLE: </li></ul><ul><li>In the beginning, McDonald’s only produced one size of hamburgers hoping it would appeal to everyone </li></ul>
  35. 35. The Gradual Change of McDonald’s Marketing Strategy <ul><li>Product Variety Marketing </li></ul><ul><li>Firm sells two or more products that have different features, styles, qualities etc. </li></ul><ul><li>Designed to offer variety to buyers rather than to target different segments </li></ul><ul><li>EXAMPLE: </li></ul><ul><li>McDonald’s is now offering variety to its buyers by selling regular Hamburgers, Big Macs, Cheeseburgers etc </li></ul>
  36. 36. The Gradual Change of McDonald’s Marketing Strategy <ul><li>Target Marketing </li></ul><ul><li>Seller identifies different segments, selects one or more according to the scope of the company and develops products and marketing mixes tailored to each selected segment </li></ul><ul><li>EXAMPLE: </li></ul><ul><li>McDonald’s developed a salad line to target diet-conscious diners </li></ul>