Mkt Mgmt062011 by 81eN6G


									Segmentation, Targeting,
   and Positioning
              P&G – Segments the Market

           Strategy                           The Payoff
   Sells multiple brands within      P&G generates revenues of
    the same product category          $4+ billion in U.S. laundry
    for detergents, soaps, and         detergent market.
    other goods.
                                      Tide has 34% share of
   Each brand features a              powder and 24% share of
    different mix of benefits
    and appeals to a different         liquid market segments.
    segment.                          Combined, all P&G brands
   Product modifications              account for 75% share of
    appeal to different niches         powder and 55% share of
    within certain segments.           liquid detergent markets.
Steps in Segmentation, Targeting,
         and Positioning
       Market Segmentation
 Geographic,  demographic, psychographic,
  and behavioral variables are used in
 There is no single way to segment a market.
 Often best to combine more than one
  variable in order to identify smaller, better-
  defined target groups.
      Geographic Variables
 Geographic   segmentation divides a market
  into different geographic units.
 Variables and breakdowns include:
  – World Region or Country: North America,
    Western Europe, Pacific Rim, Mexico, etc.
  – Country Region: Pacific, Mountain, etc.
  – City or Metro Size: defined numerically
  – Density: rural, suburban, urban
  – Climate: northern, southern
     Demographic Variables
 Differences in age, gender, family size,
 family life cycle, income, occupation,
 education, race, and religion can be used to
 segment markets.
  – Frequently used in segmentation.
  – Easier to measure than most other types of
Demographic Targeting by Age

Crest targets adults with the ad and product on the left, and
children with the ad and product on right.
Psychographic Variables

  Psychographic segmentation
      divides a market into
   different groups based on
    social class, lifestyle, or
   personality characteristics.

People in the same demographic classification
     often have very different lifestyles.
         Behavioral Variables
 Segmentation                   User   Status
  by Occasion                     – Nonusers, ex-users,
  – Special promotions &            potential users, first-
    labels for holidays.            time users, regular
  – Special products for            users.
    special occasions.           Usage   Rate
 Benefits   Sought               – Light, medium, heavy.
  – Different segments           Loyalty   Status
    desire different benefits     – Brands, stores,
    from products.                  companies.
Segmenting by Benefits Sought
                   Citicards’ various
                   products offer
                   different benefits:
                    – rewards
                    – establishing
                    – small business
                    – no frills value
 Geodemographic:
  – Claritas, Inc.
  – Potential Rating Index for Zip Markets
  – Based on U.S. Census data
  – Profiles on 260,000 U.S. neighborhoods
  – 62 clusters or types
 Segmenting Business Markets
 Consumer  and business
  markets use many of the
  same variables for
 Business marketers can also
   –   Operating Characteristics
   –   Purchasing Approaches
   –   Situational Factors
                                   This American Express ad
   –   Personal Characteristics     targets small businesses.
    Segmenting International
 Factors   used:
  – Geographic location
  – Economic factors
  – Political and legal
  – Cultural factors

 Intermarket   segmentation:
  – Segments of consumers who have similar needs and
    buying behavior even though they are located in
    different countries.
Requirements for Effective
               Measurable
               Accessible
               Substantial
               Differentiable
               Actionable

             “Lefties” are hard to identify and
             measure, thus few firms tailor their
             offers to this group. “Anything Left
             Handed” is an exception.
  Evaluating Market Segments
 Segment   Size and Growth
  – Analyze current segment sales, growth rates, and
    expected profitability.
 Segment   Structural Attractiveness
  – Consider competition, existence of substitute products,
    and the power of buyers & suppliers.
 Company    Objectives and Resources
  – Examine company skills & resources needed to succeed
    in that segment.
  – Offer superior value & gain advantages over
Target Marketing Strategies
  Target Marketing Strategies
 Undifferentiated    (mass) marketing
  – Ignores segmentation opportunities
          products rarely succeed for long in the
      Such
      American marketplace.
 Differentiated    (segmented) marketing
  – Targets several segments and designs separate
    offers for each.
      Coca-Cola, Procter & Gamble (soaps and
      detergents), and Toyota are a few examples.
   Target Marketing Strategies
 Concentrated   (niche)
  – Targets one or a couple
    small segments
  – Niches have very
    specialized interests
 Tailoring  products and marketing programs to suit
  the tastes of specific individuals and locations.
   – Local Marketing: Tailoring brands and promotions
     to the needs and wants of local customer groups—
     cities, neighborhoods, specific stores.
   – Individual Marketing: Tailoring products and
     marketing programs to the needs and preferences of
     individual customers.
    Choosing a Targeting Strategy

 Factors   to consider:
  – Company resources
  – Product variability
  – Product’s life-cycle
  – Market variability
  – Competitors’ marketing
          Socially Responsible
 Smart targeting helps both companies and
 Target marketing sometimes generates controversy
  and concern.
   – Vulnerable and disadvantaged can be targeted.
   – Cereal, cigarette, beer, and fast-food marketers have
     received criticism.
   – Internet has raised fresh concerns about potential
     targeting abuses.
       Product Positioning
A  product’s position is the way the product
 is defined by consumers on important
 attributes, or as the place the product
 occupies in consumers’ minds relative to
 competing products.
 – Perceptual position maps can help define a
   brand’s position relative to competitors.
Positioning Map: Large Luxury SUVs
   Choosing a Positioning Strategy

 Identify a set of possible competitive
  advantages on which to build a position.
 Choose the right competitive advantages.
 Select an overall positioning strategy.
Identifying Possible Competitive
 Key to winning target customers is to
  understand their needs better than
  competitors do and to deliver more value.
 Competitive advantage – extent to which a
  company can position itself as providing
  superior value.
  – Achieved via differentiation.
         Sources of Competitive
                can be
 Differentiation
  achieved by means of:
   –   Products
   –   Services
   –   Image
   –   People

 Which form of differentiation is
  promoted in the ad at right?
          Positioning Errors
 Underpositioning:
  – Failing to really position the company at all.
 Overpositioning:
  – Giving buyers too narrow a picture of the
 Confused   Positioning:
  – Leaving buyers with a confused image of a
          Choosing the Right
        Competitive Advantages
   Not all brand differences      The best competitive
    are meaningful and              advantages are those that
    worthwhile, nor do all          meet seven key criteria.
    differences make a good          – Important
                                     – Distinctive
                                     – Superior
   Each difference has
    the potential to create          – Communicable
    company COSTS as                 – Preemptive
    well as consumer value.          – Affordable
                                     – Profitable
Possible Value Propositions
Communicating and Delivering
   the Chosen Position
 Company   must take strong steps to deliver
  and communicate the desired position to
  target consumers.
 The marketing mix efforts must support the
  positioning strategy.
 Must monitor and adapt the position over
  time to match changes in consumer needs
  and competitors’ strategies.

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