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Segmentation

Segmentation. Group Exercise Travel/Business/Leisure Sports Outdoor/Skiing/Mountain Biking New Mothers/New Fathers Gardening/Home Related Recreational Shopping Students/Computers/Movies/Reading . Segmentation & Mkt Targeting.

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Segmentation

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  1. Segmentation • Group Exercise • Travel/Business/Leisure • Sports • Outdoor/Skiing/Mountain Biking • New Mothers/New Fathers • Gardening/Home Related • Recreational Shopping • Students/Computers/Movies/Reading

  2. Segmentation & Mkt Targeting • Market Segmentation is the process by which a market is divided into distinct customer subsets of people with similar needs & characteristics that lead them to respond to a particular product offering and strategic marketing program

  3. Targeting • Evaluating the relative attractiveness of each segment, (size, revenue potential, growth rate), the benefits sought & the firms relative strengths. • Positioning is designing product offerings and developing strategic marketing programs that collectively create an enduring competitive advantage in marketplace

  4. Rationale • Market Aggregation Strategy • Segmentation Strategy Benefits are opportunity for new product development • Strategic allocation of resources • Reach homogeneous groups • Issue: Finding appropriate scheme to facilitate formulation of successful mkt strats & programs

  5. Segmentation • 2 Step Strategy • 1. Identify • 2. Aggregate into segments • Physical Descriptors-General Behavioral-Product Related Behavioral-Needs • How might you do this on the web? • (bookmarked sites, lifeminders surveys, etc?) • Foundation for developing the proper mix of • mkt activities including advertising

  6. Segmentation Issues • What should come first? • Product Selection? Or Prospect Selection? • (do you start with product or do you start • with a mkt segment that is desireable?) • GLOBAL segmentation, sophisticated markets & communication issues • Market Attractiveness • Analyzing & Prioritizing Target Mkts

  7. Mkt Attractiveness Factors Mkt/Customer Economic/Tech Competitive Environmental Competitive Position Factors Mkt Position Economic/Tech Capabilities Interactions Market Attractiveness Matrix

  8. Analyzing & Prioritizing Targets • 1 Selection of Mkt attractivenss & business strength factors choose criteria • 2 Weighing each of these factors • 3 Rating each segment on these areas • 4 Projecting the future position of a mkt • 5 Evaluating implications for choosing target mkts and allocating resources

  9. SEGMENTATION • CREATE PROFITABLE EXCHANGES • to do this on web, must first • initiate awareness • SHARED CHARACTERISTICS • with web quietly assess characteristics/test • easier to do subtle queries to find out more • without as much expense and time now

  10. SEGMENTATION • CONSUMER MARKETS • B2C • BUSINESS MARKETS • -B2B

  11. Targeting Strategies • Mass Market Strategy • Niche-Market Strategy • Growth Market Strategy • International Arena • Ethical Issues • Exclusion Issues

  12. SEGMENTATION • FOOTPRINTS - web (bookmarked sites, subscriptions, cookie trails, purchases) • STARS -Simmons Teenage Research Study • GVU - Georgia Tech Graphics Visualization Usability Survey 10,000 users • Forrester Research Data - web site • GVU 38.7% Forrester 43% • Home Environment Growth of Internet

  13. Segmentation • PROFILE: • BEHAVIORISTIC • GEOGRAPHIC • DEMOGRAPHIC • PSYCHOGRAPHIC

  14. Segmentation • Behavioristic - Stephan & Tannenholz • 1. Sole Users • 2. SemiSole • 3. Discount Users • 4. Aware Nontriers • 5. Trial/Rejectors • 6. Repertoire Users

  15. SEGMENTATION • USAGE RATE VARIABLES: • What factors impact usage rate? • Q: How might the trend toward pants affect • pantyhose sales globally? L’Eggs Data • Volume Segmentation - • Q: Is it easier to get heavy users to use more or to get nontriers to do trial? • Q: How to predict usage via other products?

  16. SEGMENTATION • How does the weather impact buying patterns? • Purchase occasion variables? • Benefits Sought Variables - this is the prime objective of many consumer attitude studies and is the basis for ads. • Switching in response to different need states - compare to Maslow hierarchy.

  17. DEMOGRAPHIC AGE GENDER INCOME OCCUPATION ETHNICITY PSYCHOGRAPHIC VALUES ATTITUDES PERSONALITY LIFESTYLE EMOTIONAL SEGMENTATION PROFILE

  18. SEGMENTATION • Cultural Anthropology - Environment can have a powerful impact. • China Example - 1% run water/84% TV • Hispanic Example - Texas vs LA trends • Psychographics may help predict purchase • behavior or tendencies because it shows what people feel, believe, how they live • web hyperlinks, domain names, search engines, pricing, cross cultural etc.

  19. SEGMENTATION • GEOGRAPHIC SEGMENTATION • GLOBAL DEVELOPMENTS • Cosmopolitanism • COMBINING GEOS & PSYCHOS • VALS/SRI -Japan, Germany, France, Norway, Italy Y&R - 4 Cs. • RISC - 12 European countries • Anticipating Change in Europe (ACE) • traditionalist, homebody, rationalist, pluralist, striver, trendsetter ---- Istanbul Turkey Update

  20. CHICAGO SEGMENTATION

  21. CHICAGO SEGMENTATION • Selection of Target Prospect Groups: • Must be large enough market to be profitable - market assessment formulas • Estimate potential demand & volume • Starbucks/Coffee Beanery Examples • Web - may need to have speed, convenience, delivery, but can reach broader geographic range potentially.

  22. 4 Ps…6Ps…7Ps... • PRODUCT • PRICE • PLACE • PROMOTION • PUBLIC • POLICY • PROLIFERATION/PACE/TECHNOLOGY • (ALSO KNOWN AS IP INFORMATION P

  23. Positioning Decisions • Physical vs Perceptual Product Positioning • Physical Positioning Limitations • Perceptual Product Positioning • How Consumers Perceive Competitive Offerings: • Simple physical based attributes • Complex physical attributes • Abstract attributes

  24. Product Life Cycle • Introduction - trendsetters/early adopters • innovator stage critical • Decline - selective demand/conquest • Service • Equipment based vs People Based • Product • Classifications

  25. Product Classifications

  26. Product Differences • Perceptible Differences • Hidden Differences (not known until use) • Induced Differences

  27. BRAND EQUITY • Individual Brand • National Brand • Family Brand • Private Label Brand • WEB Brand (emerging virtual brands) • RossRoy/InterOne Plymouth - Chrysler • Brand Stewardship - BrandAsset Valuator Matrix - brand stature & vitality/personality

  28. Brand Equity • Packaging - containment/protection/convenience/appeal • Identification - • web becomes validator for brand • web is also way to have universal brand price information, knowledge, comparison • Price, Quantity = demand, supply, sales

  29. Positioning Process • 1 Identify relevant product brand set • 2 Set of determinant attributes/product space • 3 Collect information from sample customers • 4 Analyze intensity of a product’s current position in customer’s minds • 5 Determine product’s current location/position • 6 Determine customer’s most preferred combo • 7 Examine fit btw preferences of mkt segments • 8 Select positioning or repositioning strategy

  30. Expensive Slow ------------------------------- Inexpensive Quick ------------------------------- Perceptual Mapping Exercise

  31. Market Position Strategies • Monosegment Positioning • Multisegment Positioning • Standby Positioning • Imitative (copy cat) Positioning • Anticipatory Positioning (proactive/offensive/pre-emptive) • Adaptive Positioning (evolutionary) • Defensive Positioning

  32. Profile Behavior Listens classical radio 3 Foreign Trips/3 yrs Attended live theatre Drinks imported wine Visited Museum Uses Gold AMEX card Uses Dry Cleaner % Microvision Index 21.5 750 22.9 483 47.2 345 29.6 350 45.8 334 36.6 710 26.5 481 Nat ave index = 100 Lifestyle Data ClusterWWW.SITERREPORTS.COM

  33. MicroVision Groups • MVG01 - Accumulated Wealth • MVG02 - Mainstream Families • MVG03 - Young Accumulators • MVG04 - Mainstream Singles • MVG05 - Asset Building Families • MVG06 - Conservative Classics • MVG07 - Cautious Couples • MVG08 -Sustaining Families • MVG09 - Sustaining Singles • MVG10 - Anomalies • MVG11 - Unclassified • WHO ARE THEY MISSING AND WHAT DO YOU THINK OF MVG10 & 11?

  34. IVALS INTERNET PSYCHOGRAPHICShttp://future.sri.com • Affinity Mapping Software • 10 Profile Segments: • WIZARDS SURFERS • PIONEERS IMMIGRANTS • UPSTREAMERS SOCIABLES • SOCIALITES SEEKERS • WORKERS MAINSTREAMERS • WHICH GROUP CONTAINS THE POWER USERS? • WHICH GROUP SEES THE INTERNET AS A TOOL?

  35. CLICK-STREAM ANALYSISwww.alexa.com • A NEW MODEL OF ADVERTISING VIEWERSHIP • NOVAK & HOFFMAN OF VANDERBILT UNIV • similar to eye tracking studies, but applied to how one navigates through electronic ads and online navigation process • http://www200.ogsm.vanderbilt.edu/papers/clickstream/clickstream.html • This would be good as a paper option!

  36. MARKET DEMAND • DEMAND VARIABLES Nielsen Knowledge Vault - product sales & factors • Product & Distribution Costs • Competition • Corporate Obj & Strats • Variable Influences • Research - www.forrester.com, www.demographics.com, www.census.gov

  37. SOFTWARE • AC NIELSEN KNOWLEDGE VAULT • TEAMS - Total Evaluation Analysis Sales • SPSS - DIA Study • Arbitron • Knowledge Seeker • Proprietary forecasting programs

  38. Segmentation • Distribution Issues - B-B, alternative channels, place issues • Place, direct, network, multilevel, indirect • Input/Output web based • push/pull selective, distribution, co-op, excl • VMS - Franchising McD.s, Mailboxes

  39. SEGMENTATION • EMOTIONAL FACTORS THAT MOTIVATE CONSUMERS: • Theoretical underpinnings… • Business Industrial Markets - purchasing depts & buyers, some of this may carry over • Business Markets - segment by end user, by channels, primary demand trends, 2 step • wholesaler WD channels have diff needs

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