MM271 Introduction to Marketing - PowerPoint PPT Presentation
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MM271 Introduction to Marketing
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Age: may not related to one's need & buying power ... magazines; now spread to cars, deodorants, sports & financial services ... one learn about, buy, or use a ... – PowerPoint PPT presentation
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Title: MM271 Introduction to Marketing
1
MM271Introduction to Marketing
- Topic 4
- Identifying
- Market Segments Targets
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Learning Objectives
- By the end of this lecture, you will know
- Explain what market segmentation is, when to use
it, and the five steps involved in segmentation. - Recognize the different factors used to segment
consumer markets - Develop a market-product grid to use in
segmenting and targeting a market. - Understand how marketing managers position
products in a market.
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1. An Overview
- Segmentation
- aggregate prospective buyers into groups
(segments) that - have common needs and
- respond similarly to a marketing action of a firm
- Targeting
- Evaluate the attractiveness of various segments
- Decide how many and which segments to enter
- Positioning
- Define a product so that consumers will perceive
it to be different from other competing products
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1. An Overview
Choose the bases of segmentation group buyers
into segments
Develop a market-product grid estimate the size
of market
Assess the attractiveness of the segments
Pick the right one!!
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2. Segmentation
- 2.1 Segmentation Variables Consumer Market
GEOGRAPHIC
PSYCHOGRAPHIC
Region Density Community
Lifestyle Personality
DEMOGRAPHIC
BEHAVIORAL
Occasions Benefits User status Usage
rate Awareness
Age Family Gender Income Education Occupation
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2. Segmentation
- 2.1 Segmentation Variables Consumer Market
- Geographic
- For marketers operate in more than one geographic
area - Easy to localize marketing mix activities
- Some companies seek to find untapped geographic
areas - E.g. countries, states, provinces, regions,
cities, districts - Demographic
- Most commonly used ? easy to observe measure
- Age may not related to ones need buying power
- Gender used for clothing, cosmetics, toiletries,
magazines now spread to cars, deodorants, sports
financial services - Income used for car, boat, clothing, financial
service, travel
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2. Segmentation
- 2.1 Segmentation Variables Consumer Market
- Psychographic
- People in same demographic group may have very
different psychographic characteristics - Lifestyle segmentation is gaining popularity as
people are buying products to express their way
of living - Personality marketers are trying to associate
products with their target markets personality
type - Behavioral
- Based on consumer knowledge, attitudes, uses or
responses to a product - Some believe behavioral variables are the best
starting point for segmenting markets - Occasion when does one learn about, buy, or use
a product? - Benefit the product attributes that are useful
to consumers - User/usage frequency volume of purchase use
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2. Segmentation
- 2.2 Develop Market-Product Grid
- Step 1
- Classify the companys available product into
different categories - E.g. breakfast, lunch, snacks, dinner
- Step 2
- Line up different market segment against the
number of product categories - Step 3
- Estimate the market size in each cell
(market-product combination) - In terms of sales revenue or number of customers
- Could use crude guest estimates if formal
marketing research has yet to be conducted
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3. Targeting
- 3.1 Assessing the attractiveness of each segment
- Market size
- Expected growth
- Companys competitive position
- Level of competition
- Substitute products
- Power of buyers
- Powerful suppliers
- Cost of reaching the segment
- Compatibility with the companys objectives
resources
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3. Targeting
- 3.2 Targeting Strategies
- Undifferentiated strategy
- Differentiated strategy
- Concentration
- Single-segment concentration
- Product specialization
- Market specialization
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3. Targeting
- 3.2 Targeting Strategy
- Undifferentiated Strategy
- 1 product fits all
- ignore market segment differences
- modern marketers have strong doubts about this
strategy
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3. Targeting
- 3.2 Targeting Strategy
- Differentiated strategy
- Different product offerings for different market
segments - Hope to attain higher sales market position in
each one - Higher production marketing costs
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3. Targeting
- 3.2 Targeting Strategy
- Concentrated strategy Single segment
- One product goes after one market segment
- Hope to achieve strong market position in the
segment for greater knowledge, know-how
reputation - Higher risks if the market of the particular
segment suddenly turns negative
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3. Targeting
- 3.2 Targeting Strategy
- Concentrated strategy Product Specialization
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3. Targeting
- 3.2 Targeting Strategy
- Concentrated strategy Market Specialization
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3. Targeting
- 3.2 Targeting strategies
- Factors of considerations
- Company resources
- Limited resources ?
- The degree of product variability
- Standardized product ?
- Products life-cycle stage
- Early stages ?
- Market variability
- Similar tastes preferences ?
- Competitors marketing strategies
- Be careful of using opposites
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4. Positioning
- 4.1 Positioning for Competitive Advantage
- Definition
- Create meaningful differences that distinguish
one from its competitors - Steps
- Identify possible competitive advantage
- Choose the right competitive advantage
- Communicate deliver the chosen position
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4. Positioning
- 4.2 Identify possible competitive advantage
- Competitive advantage
- An advantage over competitors gained by offering
consumers superior value through - Lower prices
- More benefits that justify higher prices
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4. Positioning
- 4.2 Identify possible competitive advantage
- Ways for creating differentiation
IMAGES
CHANNELS
SERVICES
PERSONNEL
ORGANIZATION/ HERITAGE
PRODUCT
USER/USAGE
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4. Positioning
- 4.2 Identify possible competitive advantage
- Criteria for selecting differentiation premise
1
I M P O R T A N T
2
S U P E R I O R
3
P R E E M P T I V E
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4. Positioning
- 4.3 Select the right competitive advantage
- Perceptions of consumers
- Which attributes are important for a particular
product? - How do the consumer judge the existing products
according to the important attributes? - Perceptual map
- Illustrate two important attributes of a product
class - Display the relative position of different
products or brands in the minds of consumers on
the map - Identify the location in which the company wish
to position
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