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Learning Objectives: • Learn the three steps of marketing, market segmentation, target marketing, and market positioning • Understand the major bases for segmenting consumer and business marketing strategy • Know how companies identify attractive market segments and choose market strategy • Realize how companies position their products for maximum competitive advantage in the market place
- dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.
Major Segmentation Variables for Consumer Markets • Age • Gender • Family size • Family life cycle • Income • Occupation • Education • Religion • Race • Generation • Nationality
GEOGRAPHIC SEGMENTATION • Calls for dividing the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods
DEMOGRAPHIC SEGMENTATION • Divides the market into groups based on variables such as age, sex, family size, family life cycle, income, occupation, education, religion, race and nationality
AGE AND LIFE CYCLE SEGMENTATION • Dividing a market into different age and life cycle groups
GENDER SEGMENTATION • Dividing a market into different groups based on gender
Psychographic Segmentation • dividing a market into different groups based on social class, lifestyle or personality characteristics
Behavioral Segmentation • dividing a market into groups based on consumer knowledge, attitude, use or response to a product Occasions buyers can be grouped according to occasions – when they get the idea to buy, make their purchase or use the purchased item Occasion Segmentationdividing the market into groups according to occasion
B. Benefits Sought • a powerful form of segmentation is to group buyers according to different benefits that they seek from the product • Benefit Segmentationrequires finding the major benefits people look for in the product class – the kinds of people who look for each benefit and the major brand that deliver each benefit
C. User Status • Markets can be segmented into groups of non users, ex-users, potential users, first-time users and regular users of a product • D. Usage Rate • markets can also be segmented into light, medium and heavy product users • Heavy Usersare often a small percentage of the market but account for a high percentage of total consumption • E. Loyalty Status • a market can also be segmented by consumer loyalty. Consumers can be loyal to brands, stores and company
Requirements for Effective Segementation • Measurable: The size, purchasing power, and profiles of the segments can be measured. • Accessible: The market segments can be effectively reached and served • Substantial: The market segments are large or profitable enough to serve.
Requirements for Effective Segementation • Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs • Actionable: Effective programs can be designed for attracting and serving the segments
Evaluating Market Segments • Segment size and growth • Segment structural attractiveness • Company objectives and resources
Selecting Target Market Segments • Target Market • consists of a set of buyers sharing common needs or characteristics that the company decides to serve. Target Marketing Strategies Targeting narrowly Targeting broadly
Undifferentiated (mass) marketing • A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. • Focuses on what is common in the needs of consumers rather than on what is different.
2. Differentiated (segmented) marketing • A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. • It also increases the costs of doing business.
3. Concentrated (niche) marketing • A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches. • The firm achieves a strong market position.
4. Micromarketing • The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups-includes local marketing and individual marketing. • Local marketing – tailoring brands and promotions to the needs and wants of local customer groups-cities, neighborhoods, and even specific stores. • Individual marketing – tailoring products and marketing programs to the needs and preferences of individual customers-also labeled “markets-of-one-marketing”, “customized-marketing”, and “one-to-one-marketing”.
Company resources • Limited resources Concentrated marketing • Product variability • Uniform products Undifferentiated marketing • Products that varies in design Differentiated or concentrated • marketing • Product's life cycle stage • New product differentiated or concentrated marketing • In mature stage of product life cycle differentiated marketing
Market variability • If buyers have the same taste, buy the same amount and react the same way • Competitors' marketing strategies • If competitors use undifferentiated marketing undifferentiated marketing differentiated or concentrated marketing
Socially Responsible Target Marketing • Socially responsible marketing calls for segmentation and targeting that serve not just the interests of the company but also the interest of those targeted.
POSITIONING FOR COMPETITIVE ADVANTAGEProduct position - the way the product is defined by consumers on important attributes-- the place the product occupies in consumers' minds relative to competing productsExamples:Tide - "powerful, all purpose family detergent"Toyota Echo and Ford Focus are positioned on economyMercedes and Cadillac on luxuryPorsche and BMW on performancesVolvo positions powerfully on safety
Positioning Maps Perceptual positioning maps - shows consumer perceptions of their brands versus competing products on important buying dimensions. CHOOSING A POSITIONING STRATEGY Three steps 1. Identifying possible competitive advantages 2. Choosing the right competitive advantages 3. Selecting an overall positioning strategy
Identifying Possible Competitive Advantages • Product differentiation • Services differentiation • Channels differentiation • People differentiation • Image differentiation
How many differences to promote? • Marketers think that companies should promote only one benefit to the target market. • A company should develop a unique selling proposition (USP) for each brand and stick to it. Each brand should pick an attribute and tout itself as a “number one” on the attributes. Buyers tend to remember number one better especially in an over communicated society.
Which Differences to Promote? • The company must carefully select the ways in which it will distinguish itself from competitors. A difference is worth establishing to the extent that it satisfies the ff. criteria: • Important: The difference delivers a highly valued benefit to target buyers. • Distinctive: Competitors do not offer the difference or the company can offer it in a more distinctive way. • Superior: The difference is superior to other ways that customers might obtain the same benefit. • Communicable: The difference is communicable and visible to buyers. • Preemptive:Competitors cannot easily copy the differences. • Affordable:buyers can afford to pay for the difference. • Profitable:The Company can introduce the difference profitability.
Selecting an Overall Positioning Strategy • Consumers typically choose products and services that give them the greatest value. Thus, marketers want to position their brands on the key that they offer relative to competing brands.
More for more • Involves providing the most upscale product or service and charging a higher price to cover the higher costs.
More for the same • Companies can attack a competitors more-for-more positioning by introducing a brand offering comparable quality but a lower price. • "Perhaps the first time in history that trading a $72000 car for a $36000 car could be considered trading up”
The Same for Less • They don’t claim to offer different or better products. Instead, they offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations. • Less for much less • A market almost always exists for products that offer less and therefore cost less. Less for much less positioning involves meeting consumer’s lower performance or quality requirements at a much lower price. • More for less • Many companies claim to do this. More features, more product, more value, for a really low price. We typically see "More for Less" when a new brand is entering a target market with established players. Many claim to offer "More for less" today.
Developing a Position Statement • Position Statement • A statement that summarizes company or brand positioning---it takes this form: To (target segment and need) our (brand) is (concept) that (point of difference)
Communicating and Delivering the Chosen Position Once it has chosen a position, the company must take strong steps to deliver and communicate the desired position to target consumers. All the company’s marketing mix efforts must support the positioning strategy.
MARKET SEGMENTS FOR MITSUBISHI Micro and Compact Car Family Car Road Off and SUV Sports Car Premium Car Business Cars and Trucks
GEOGRAPHICAL • By region of the world Mitsubishi cars, there are different VERSIONS that is suitable for all…
