Markets by RushenChahal

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									   Markets

Prof. Rushen Chahal
                  TYPES OF MARKETS
       • Consumer market: Purchasers and household
         members who intend to consume or benefit from
         the purchased products.

       • Business market: Individuals or groups that
         purchase a specific kind of product for resale, use in
         producing other products, or use in daily
         operations.




© PhotoDisc
              Steps in Segmentation,
             Targeting, and Positioning
                            6. Develop Marketing
                            Mix for Each Target Segment           Market
                    5. Develop Positioning                      Positioning
                    for Each Target Segment
               4. Select Target
               Segment(s)                                  Market
          3. Develop Measures                             Targeting
          of Segment Attractiveness
     2. Develop Profiles
     of Resulting Segments
                                             Market Segmentation
1. Identify Bases
for Segmenting the Market
        Market Segmentation
• Division of the total market into smaller,
  relatively homogeneous groups

• Determined by the market characteristics, not
  the product

• Segments must be:
   – Measurable
   – Substantial
   – Accessible
Segmenting Consumer Markets

  Geographic


      Demographic


           Psychographic


                    Behavioral
  Examples of Segmentation Bases for Consumer Markets


• Geographic Segmentation       –   North, South, East, West
   – Region                     –   Hot, temperate, cold
   – Climate                    –   Up to 100K, 100K +
   – City Size                  –   Urban, suburbanm rural
   – Population density
• Demographic Segmentation
   – Age
                                –   GenY, Gen X, Seniors
   – Gender
                                –   Male, female
   – Household size             –   1,2,3,4, or more persons
   – Income                     –   <$25k, $25-50K, >$50K
   – Occupation                 –   Professional, blue-collar
   – Education                  –   HS, some college, graduate
                Geographic Segmentation

                                 • Freestanding urban
      Metropolitan Statistical     population area of at
           Area (MSA)              least 50,000 and a total
                                   MSA population of
                                   100,000 or more
                                 • Usually border on
                                   nonurbanized counties
                                 • Examples: Huntsville-
                                   Madison County MSA




© PhotoDisc
              Steps in Segmentation,
             Targeting, and Positioning
                            6. Develop Marketing
                            Mix for Each Target Segment           Market
                    5. Develop Positioning                      Positioning
                    for Each Target Segment
               4. Select Target
               Segment(s)                                  Market
          3. Develop Measures                             Targeting
          of Segment Attractiveness
     2. Develop Profiles
     of Resulting Segments
                                             Market Segmentation
1. Identify Bases
for Segmenting the Market
  Examples of Segmentation Bases for Consumer Markets (continued)



 Psychographic Segmentation
  ◦ Values                            ◦   Achievement, image
  ◦ Attitudes                         ◦   Innovators, late adopters
  ◦ Lifestyles                        ◦   Adventurer, arts/cultural
  ◦ Social class                      ◦   Upper, middle, lower

                                      ◦ Convenience, economy,
                                        prestige
 Behavioral Segmentation
                                      ◦ 80/20 Principle (p. 190)
  ◦ Benefits sought
                                      ◦ Preference, insistence
  ◦ Usage rate
                                      ◦ Home, work, vacation
  ◦ Brand loyalty
  ◦ Usage situation
Segmenting for Business Markets

     Demographic

       Operating Variable

           Purchasing Approaches

               Situational Factors
                   Personal
                   Characteristics
   Examples of Segmentation Bases for Business Markets


 Demographic Segmentation
  ◦ Industry                    ◦ Consumer, B2B
  ◦ Company size                ◦ $$$, # employees
  ◦ Business Category           ◦ NAICS, SIC


 Operating Variables
  ◦ Technology                  ◦ Application, operation
  ◦ Purchase size               ◦ Heavy user, major accounts
  ◦ End-use                     ◦ Commercial (OEM), trade
                                  (resellers), government,
                                  institutions
 Purchasing situation          ◦ Buying center, familiarity
              Steps in Segmentation,
             Targeting, and Positioning
                            6. Develop Marketing
                            Mix for Each Target Segment           Market
                    5. Develop Positioning                      Positioning
                    for Each Target Segment
               4. Select Target
               Segment(s)                                  Market
          3. Develop Measures                             Targeting
          of Segment Attractiveness
     2. Develop Profiles
     of Resulting Segments
                                             Market Segmentation
1. Identify Bases
for Segmenting the Market
          Segment Profiles and Attractiveness

 Profiles are based on a combination of bases
  ◦ Ex. www.esri.com
 Segment Size and Growth
 ◦ Analyze sales, growth rates and expected profitability.

 Segment Structural Attractiveness
 ◦ Consider effects of: Competitors, Availability of Substitute Products
   and, the Power of Buyers & Suppliers.

 Company Objectives and Resources
 ◦ Company skills & resources relative to the segment(s).
 ◦ Look for Competitive Advantages.
         Select Target Market Segments
                 Mass Marketing
           Same product to all consumers
                 (no segmentation)


              Segment Marketing
    Different products to one or more segments
                (some segmentation)


                Niche Marketing
  Different products to subgroups within segments
                ( more segmentation)

                 Micromarketing
Products to suit the tastes of individuals or locations
              (complete segmentation)
              Steps in Segmentation,
             Targeting, and Positioning
                            6. Develop Marketing
                            Mix for Each Target Segment           Market
                    5. Develop Positioning                      Positioning
                    for Each Target Segment
               4. Select Target
               Segment(s)                                  Market
          3. Develop Measures                             Targeting
          of Segment Attractiveness
     2. Develop Profiles
     of Resulting Segments
                                             Market Segmentation
1. Identify Bases
for Segmenting the Market
    Develop Position Within Market Segment


• Positioning: a marketing strategy that emphasizes
  serving a specific market segment by achieving a certain
  position in buyers’ minds
• Positioning map: graphic illustration that shows
  differences in consumers’ perceptions of competing
  products
• Reposition: marketing strategy to change the position
  of its product in consumers’ minds relative to the
  positions of competing products
   General Thoughts on Positioning
• Positioning is in the mind of the consumer, not the
  company
• Slogan recall ≠ Positioning Success
• Positions evolve over time
• Positioning failure can be due to:
   – Lack of true differences
   – Lack of perceived differences
• Companies can have same product positioned in different
  markets
• Companies can have different products positioned in the
  same market
Common Positioning Strategies
     • Attribute/Benefit
     • Price/Quality
     • Use or application
     • Product class
     • Competitor comparison
           Sample Positioning by P&G
• Bold:       fabric softening and pill/fuzz removal

• Cheer:      Protects against color fading and fabric wear

• Dreft:      removes baby stains and hypoallergenic

• Gain:       Exceptional cleaning power and whitening

• Tide:       Premium product for cleaning, whitening,
       and stain removing
     Positioning Statement
   For [target segment], the [concept]
   is [most important claim] because
   [single most important support].


Example:

   For PC users, the IOMEGA Zip drive
   is the best portable storage device because
   it is most cost-effective system.
                           Store Ratings
Store           Quality         Cust. Serv.   Price      Atmosph.

Kohls           4.79 (6)        4.10 (3)      3.43 (3)   4.23 (4)

Belk            4.39 (5)        4.45 (5)      2.92 (2)   4.21 (5)

Stein Mart      2.55 (1)        2.76 (2)      2.65 (1)   3.10 (2)

Target          4.33 (4)        4.43(4)       4.44 (4)   4.31 (6)

TJ Max          2.57 (2)        4.55 (6)      4.67 (5)   2.73 (1)

Wal Mart        3.75 (3)        2.67 (1)      5.56 (6)   4.20 (3)

Avg. Score      3.41            3.69          3.96       3.67


6=Ranked best               1=Ranked worst
                 Perceptual Map for Stores
                      6                                                6

             Kohl’s                                                             TJ Max
      Belk                Target                      Belk



                                             Price                         Target
1                                           6     1                                       6

                                       Wal Mart               Kohl’s



                                   TJ Max             Stein Mart
    Stein Mart
                                                                                    Wal Mart
                      1                                                1
                 Selection/                                        Customer
                 Quality                                           Service

								
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