Chapter 7 Segmentation, Targeting, and Positioning

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2. Market Segmentation. Represents an effort to identify and categorize groups of customers and countries according to common characteristics. 3. Targeting. The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond.
Chapter 7 Segmentation, Targeting, and Positioning

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1. 1 Chapter 7 Segmentation, Targeting, and Positioning

2. 2 Market Segmentation Represents an effort to identify and categorize groups of customers and countries according to common characteristics The first few slides are added to ensure that the students have an understanding of the basic terms that will be discussed in the chaper.The first few slides are added to ensure that the students have an understanding of the basic terms that will be discussed in the chaper.

3. 3 Targeting The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond

4. 4 Positioning The process of occupying a favorable position in the consumers mind as opposed to competition

5. 5 Global Market Segmentation Defined as the process of identifying specific segments?whether they be country groups or individual consumer groups?of potential customers with homogeneous attributes who are likely to exhibit similar responses to a company?s marketing mix. As noted in earlier chapters, two decades ago Professor Theodore Levitt advanced the thesis that consumers in different countries increasingly seek variety, and that the same new segments are likely to show up in multiple national markets. Thus, ethnic or regional foods such as sushi, falafel, or pizza might be in demand anywhere in the world. Levitt suggested that this trend, known variously as the pluralization of consumption and segment simultaneity, provides an opportunity for marketers to pursue one or more segments on a global scale. Global market segmentation is based on the premise that companies should attempt to identify consumers in different countries who share similar needs and desires. A. Coskun Samli has developed a useful approach to global market segmentation that compares and contrasts ?conventional? versus ?unconventional? wisdom. This is shown on the next slide As noted in earlier chapters, two decades ago Professor Theodore Levitt advanced the thesis that consumers in different countries increasingly seek variety, and that the same new segments are likely to show up in multiple national markets. Thus, ethnic or regional foods such as sushi, falafel, or pizza might be in demand anywhere in the world. Levitt suggested that this trend, known variously as the pluralization of consumption and segment simultaneity, provides an opportunity for marketers to pursue one or more segments on a global scale. Global market segmentation is based on the premise that companies should attempt to identify consumers in different countries who share similar needs and desires. A. Coskun Samli has developed a useful approach to global market segmentation that compares and contrasts ?conventional? versus ?unconventional? wisdom. This is shown on the next slide

6. 6 Contrasting views of global segmentation Conventional Wisdom Assumes heterogeneity between countries Assumes homogeneity within a country Focuses on macro level cultural differences Relies on clustering of national markets Less emphasis on within-country segments Unconventional Wisdom Assumes emergence of segments that transcend national boundaries Recognizes existence of within-country differences Emphasizes micro-level differences Segments micro markets within and between countries

7. 7 Global Market Segmentation Demographics Psychographics Behavioral Characteristics Benefits sought Today, global companies (and the research and advertising agencies that serve them) use market segmentation to identify, define, understand, and respond to customer wants and needs on a worldwide, rather than strictly local, basis. As we have noted many times in this book, global marketers must determine whether a standarized or adapted marketing mix is required to best serve those wants and needs. By performing market segmentation, marketers can generate the insights needed to devise the most effective approach. The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers. This slide shows the most common segmentation categories. The following slides will discuss them more deeply. Today, global companies (and the research and advertising agencies that serve them) use market segmentation to identify, define, understand, and respond to customer wants and needs on a worldwide, rather than strictly local, basis. As we have noted many times in this book, global marketers must determine whether a standarized or adapted marketing mix is required to best serve those wants and needs. By performing market segmentation, marketers can generate the insights needed to devise the most effective approach. The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers. This slide shows the most common segmentation categories. The following slides will discuss them more deeply.

8. 8 Psychographic Segmentation Grouping people according to attitudes, value, and lifestyles SRI International and VALS 2 Porshe example Top Guns (27%): Ambition, power, control Elitists (24%): Old money, car is just a car Proud Patrons (23%): Car is reward for hard work Bon Vivants (17%): Car is for excitement, adventure Fantasists (9%): Car is form of escape Data are obtained from questionnaires that require respondents to indicate the extent to which they agree or disagree with a series of statements. Psychographics is primarily associated with SRI International, a market research organization whose original VALS and updated VALS 2 analyses of consumers are widely known. Data are obtained from questionnaires that require respondents to indicate the extent to which they agree or disagree with a series of statements. Psychographics is primarily associated with SRI International, a market research organization whose original VALS and updated VALS 2 analyses of consumers are widely known.

9. 9 Behavior Segmentation How much they use it How often they use it User status Law of disproportionality/Pareto?s Law ? 80% of a company?s revenues are accounted for by 20% of the customers Behavior segmentation focuses on whether or not people buy and use a product, as well as how often, and how much they use or consume. Consumers can be categorized in terms of usage rates: for example, heavy, medium, light, and non-user. Consumers can also be segmented according to user status: potential users, non-users, ex-users, regulars, first-timers, and users of competitors? products. Behavior segmentation focuses on whether or not people buy and use a product, as well as how often, and how much they use or consume. Consumers can be categorized in terms of usage rates: for example, heavy, medium, light, and non-user. Consumers can also be segmented according to user status: potential users, non-users, ex-users, regulars, first-timers, and users of competitors? products.

10. 10 Benefit Segmentation Benefit segmentation focuses on the value equation Value = Benefits / Price Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses

11. 11 Assessing Market Potential Be mindful of the pitfalls Tendency to overstate the size and short-term attractiveness of individual country markets The company doesn?t want to ?miss-out? on a strategic opportunity Management?s network of contacts will emerge as a primary criterion for targeting After segmenting the market by one or more of the criteria just discussed, the next step is to assess the attractiveness of the identified segments. This part of the process is especially important when sizing up emerging country markets as potential targets. It is at this stage that global marketers should be mindful of several potential pitfalls associated with the market segmentation process. After segmenting the market by one or more of the criteria just discussed, the next step is to assess the attractiveness of the identified segments. This part of the process is especially important when sizing up emerging country markets as potential targets. It is at this stage that global marketers should be mindful of several potential pitfalls associated with the market segmentation process.

12. 12 Targeting: 9 Questions Who buys our product? Who does not buy it? What need or function does it serve? Is there a market need that is not being met by current product/brand offerings? What problem does our product solve? What are customers buying to satisfy the need for which our product is targeted? What price are they paying? When is the product purchased? Where is it purchased?

13. 13 Target Market Strategy Options Standardized global marketing Mass marketing on a global scale Undifferentiated target marketing Concentrated global marketing Niche marketing Single segment of global market Differentiated global marketing Multi-segment targeting Two or more distinct markets

14. 14 Positioning The process of occupying a favorable position in the consumers mind as opposed to competition Attribute or Benefit Quality and Price Use or User Competition


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