Brand Segmentation


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Brand Segmentation

  1. 1. Ch # 7-Segmentation, Targeting & Positioning Newport institute communication & economics Karachi CONSUMER SEGMENTATION
  2. 2. Ch # 7-Segmentation, Targeting & Positioning Market Segment • A subgroup within the market who share certain relevant characteristics • A group of customers with certain characteristics in common & whose needs can be met with a distinct marketing mix
  3. 3. Ch # 7-Segmentation, Targeting & Positioning Market segmentation - Definitions • The analytical division of the market into discrete groups of customers that share common attributes. • The identification of subsets of buyers within a market who share similarities, needs and who have similar buying processes.
  4. 4. Ch # 7-Segmentation, Targeting & Positioning 3 basic questions • Who is buying? • What do they buy? • When do they buy?
  5. 5. Ch # 7-Segmentation, Targeting & Positioning Steps to segmentation MARKET TARGET MARKET SEGMENTATION MARKETING POSITIONING Develop measure Develop positioning Identify bases for of segment for target segments segmenting the market attractiveness
  6. 6. Ch # 7-Segmentation, Targeting & Positioning Ways to segment • Geographic: by geographical area • Demographic: by population characteristics • Psychographic: classification on the basis of psychological factors • Behavioral: classifying by purchasing behavior
  7. 7. Ch # 7-Segmentation, Targeting & Positioning Ways to segment Geographic Demographic Region Age Urban/Sub urban Gender Occupation Socio-economic group Psychographic Behavioral Life style Rate of usage Personality Benefits sought Social status Loyalty status Readiness to purchase
  8. 8. Ch # 7-Segmentation, Targeting & Positioning Choice of market segments Unattractive Average Attractive segment segment segment Absence of Strongly Avoid Possible Competitive avoid advantage Avg. in Avoid Possible Secondary terms of target Competitive advantage Strong Possible Secondary Prime target Competitive target advantage
  9. 9. Firms engage in segmentation to… • Develop different strategies for different parts of the market • Increase sales & profit from each segment • Identify marketing opportunities • Dominate certain niche segments • Reflect differences in customer tastes • Prioritize on those segments most likely to provide a higher return
  10. 10. Ch # 7-Segmentation, Targeting & Positioning Evaluation of segments • Evaluating market segments – segment size & growth – segment’s structural analysis • competition within the segment • existing or potential substitute products • relative power of buyers / suppliers – company’s objectives & resources • environment, social responsibility, if it is core business, can employ skills & resources superior to those of competition
  11. 11. Ch # 7-Segmentation, Targeting & Positioning Segmentation strategies • Undifferentiated: Ignore segments • Concentrated or focused: Concentrate on a single segment (Small firms) • Differentiated: Different marketing mix for each segment (Large firms)
  12. 12. Ch # 7-Segmentation, Targeting & Positioning Segmentation strategies Undifferentiated Firm Market Marketing Segment A Segment B Differentiated Firm Marketing Segment C Segment D Segment A Concentrated/Focused Firm Segment B Marketing Segment C Segment D
  13. 13. Ch # 7-Segmentation, Targeting & Positioning Undifferentiated Strategy • Also known as market aggregation • Targets entire market with the same marketing mix – segments ignored • Used when segments cannot be identified or where aggregation proves more profitable than segmentation • Ford’s Model T car were sold as the universal car – “any car as long as it is black”
  14. 14. Ch # 7-Segmentation, Targeting & Positioning Concentrated strategy • Marketing effort directed at a single highly defined segment • Niche marketing – Rolex watches • Used when one group is especially attractive for the organization to target • A useful strategy for smaller firms – avoids a head on collision with major players • Provides scope for competitive advantage in a small niche in the market
  15. 15. Ch # 7-Segmentation, Targeting & Positioning Differentiation Strategy • Multi segment approach • Separate mix for each segment • Expensive In terms of product & marketing cost • Only possible for large firms
  16. 16. Ch # 7-Segmentation, Targeting & Positioning Continuum of targeting strategies Undifferentiated Single marketing mix for all customers Differentiated Different mix for each segment Concentrated Targets single large segment Niche Targets a single small segment Customized Different mix for each customer
  17. 17. Ch # 7-Segmentation, Targeting & Positioning POSITIONING
  18. 18. Ch # 7-Segmentation, Targeting & Positioning Position in the market • The location of a product or service alongside key competitors in the mind of consumers • Refers to the place the product occupies in the consumer’s perceptual map of the market
  19. 19. Ch # 7-Segmentation, Targeting & Positioning Position and Positioning • A product’s position ultimately depends on the attitudes of people in the target market • Firms will seek to position their products to increase sales • Either marketers accept the customer attitudes as they & tailor the product to fit those attitudes OR seek to change those attitudes • Positioning indicates how a company wishes to compete in the market place
  20. 20. Ch # 7-Segmentation, Targeting & Positioning Positioning • Arranging for a brand or product to occupy a clear and distinctive place in the minds of the target customers relative to competing products and brands
  21. 21. Ch # 7-Segmentation, Targeting & Positioning The role of positioning… • To strengthen the power of messages directed at consumers • To target a particular segment – RSTP • To ensure that the product is differentiated in the minds of the consumer • To decide on the ground on which to compete • To analyze re-positioning possibilities
  22. 22. Ch # 7-Segmentation, Targeting & Positioning Porter’s generic strategies • Cost leader: Compete by being the lowest cost producer • Differentiation: Compete by offering something different & superior • Focus: Become a niche player concentrating on small part of the market
  23. 23. Ch # 7-Segmentation, Targeting & Positioning Differentiation • The basic principle is that you must either: - Differentiate your product - Be a provider of generic products to be sold at the lowest prices
  24. 24. Ch # 7-Segmentation, Targeting & Positioning Perceptual map • The visual representation of a brand within a specific market place showing its position relative to competitors • Shows which and how products compete in consumers mind and suggests how a product can be positioned to maximize sales
  25. 25. Ch # 7-Segmentation, Targeting & Positioning A perceptual map for supermarkets Full range Low price High price Limited range
  26. 26. Ch # 7-Segmentation, Targeting & Positioning Position map & NPD • Two options for firms developing new products: - Develop a product to occupy identified gaps in the market OR - Develop “me-too” products which copy existing rival A position map will assist decision making
  27. 27. Ch # 7-Segmentation, Targeting & Positioning Other uses of Perceptual map • To analyze strengths and weaknesses • To reveal market segments • To develop new strategies • To reposition the product • To decide on competitive position which the product to be distinguished from competitor offerings
  28. 28. Ch # 7-Segmentation, Targeting & Positioning Approaches to Positioning • By attribute: - Associating the brand with a desirable attribute - E.g. Volvo cars associated with safety & durability • By price & quality: - Price level should be right to reflect quality - E.g. Rolls Royce – High priced with quality
  29. 29. Ch # 7-Segmentation, Targeting & Positioning Approaches to Positioning • With respect to application/use: - Kit Kat is positioned to link in with tea or coffee break “Have a break – Have a Kit Kat” • By product user: - E.g Ufone - “Everybody loves to Ufone”
  30. 30. Ch # 7-Segmentation, Targeting & Positioning Positioning strategies can be related to… • Product attributes • Benefits offered • Price • Quality • Application • User categories • Specific usage situations
  31. 31. Ch # 7-Segmentation, Targeting & Positioning Successful positioning strategy requires… • Clarity • Consistency • Credibility • Competitiveness
  32. 32. Ch # 7-Segmentation, Targeting & Positioning Mistakes in Positioning • Under positioning: Consumers have limited perception of the brand & are unaware of the distinguishing features • Over-positioning: Consumers believe that the brand in only active in very focused markets • Confusion: Consumers are unclear how a brand is comparable with other brands
  33. 33. Ch # 7-Segmentation, Targeting & Positioning Re-positioning • Changing the position of the product in the market • It becomes necessary sometimes: - To extend the product lifecycle - To move into a new market segment - Because of changes in society & in social attitudes - The brand evolves with time
  34. 34. Ch # 7-Segmentation, Targeting & Positioning Re-positioning • Image re-position: No change in the product. Promotion is used to change the image of the product. • Product re-positioning: Modification of the product • Intangible re-positioning: Targeting a different market segment with the same product • Tangible repositioning: Change in both product & target market
  35. 35. Ch # 7-Segmentation, Targeting & Positioning Re-positioning Example • Johnson & Johnson Baby shampoo: Originally aimed at infants. Re-positioned as a gentle, frequent use shampoo for the adults as well as babies.