Week 6

Week 6

• 1.
  Week 6 “Segmentation, Targetingand Positioning” Chapter 7
• 2.
  Ways marketers segment consumergroups?  Process of classifying customers into groups with different needs, characteristics or behaviours.  Marketers analyse four different bases to segment the market: 1. Geographical segment 2. Demographic segment 3. Psychographic segment 4. Behavioural segment
• 3.
  Geographical Segment  whereare consumers located = country, states and cities? These can be researched to understand needs of particular region i.e. regionalised approach to production
• 4.
  Demographic Segment  understandingcharacteristics such as age, gender, family, income, occupation, education, religion, ethnicity and nationality.  These variables strongest influences of creating overall profile of target market as they have a measurability and strong likenesses that can be concluded from each characteristic.
• 5.
  Psychographics Segment  Includesthe social class, lifestyle and personality  Social class impacts strongly on type of product they enjoy or prefer  Businesses typically have social class in mind when they design their product or service  Lifestyle choices and preferences impact on marketing mix.
• 6.
  Behavioural Segment  tounderstand what consumers know and feel about a product and how they will respond to the product  Attitude of consumer is important aspect  marketers are also concerned with knowing when a person is likely to buy or have the idea that they need to buy termed “occasion segmentation” use this segmentation to have product available at the right time.  Benefit segmentation whereby marketers aim to understand the benefits desired by consumer.
• 7.
  Market Targeting  Oncebusiness has engaged with the market segmentation process they next need to decide on which segments of the market they will focus their attention.  To do this, businesses need to evaluate and select a target market.  Evaluating the market segment involves analysing three elements: 1. Size and growth 2. Structural attractiveness and company objectives 3. Resources
• 8.
  Size and Growth Selecting segments of the market that have appropriate growth rate and size  This is based on sales, sales projections and profit margins will help the business to meet their organisational objectives
• 9.
  Structural Attractiveness  Withinthis an analysis of the competitors, power of buyers, and suppliers all need to be considered  If market is flooded with similar products may be structurally unattractive  If buyers hold the power and can affect pricing maybe unattractive too  Power of suppliers can impact structural attractiveness; where suppliers are large without much competition, may hold power to restrict supply and control prices
• 10.
  Resources  Objective ofa business combined with the resources available to the business can contribute to how an organisation will evaluate the suitability of a market segment.  If market segment does not fit the organisational objectives and resources despite the size, growth and structural attractiveness the business might choose a different better suited market segment to concentrate its efforts.
• 11.
  Post Market Evaluation Business will turn its attention to selecting a market segment or segments  Ultimately the business will choose a target market which is “ a set of buyers with common needs or characteristics that the company decides to serve.  Three options are open: 1. Undifferentiated marketing 2. differentiated marketing 3. concentrated marketing
• 12.
  Undifferentiated Marketing  meansbusiness will choose not to consider the market segment characteristics and differences and instead choose to blanket the market with their product.  Mass marketing „one size fits all‟ style approach  Advantages include cheap production and advertising  Disadvantages might cost in terms of losing business to competitors who can provided more tailored product/service
• 13.
  Differentiated Marketing  Takeson a more personalised view of the right product for the right segment.  Production and advertising more expensive  advantages include sales are usually higher than in undifferentiated marketing. Brand loyalty is usually also higher as consumer are more loyal to a brand that has been tailored to best meet their needs.
• 14.
  Concentrated Marketing  Thisapproach is suited where businesses do not have marketing capabilities to use differentiated marketing approach or where many submarkets with special needs exist.  Businesses in this situation develop a specialisation and greater in-depth understanding of their product and how consumers use their product.  Resources are limited  example apple targets personal user segment with its ipod, Dell computers and business users and personal
• 15.
  Product Positioning and Differentiation Product positioning occurs after the business has determined to which segment that will target.  Product positioning is the way consumers define or understands features of product  Consumer have position in mind for product and have a comparison in mind for alternative products  Role of marketer to assign a value proposition for the product which is how the business will differentiate their product from the competition.
• 16.
   Various strategiesfor positioning a product are available to marketers.  The process of differentiating and positioning a product involves four steps: 1. Identifying a set of possible value differences 2. Selecting the right competitive advantage 3. Selecting an overall positioning strategy 4. Developing a positioning statement ** Once these steps have been followed, marketer can implement the strategy and begin to communicate their decisions with target market.
• 17.
  Identify a setof Possible value differences  Brand Positioning can be achieved through a process of mapping out the competition in the minds of consumers.  Marketer will also identify possible competitive advantages, whereby the business achieves an advantage over competitors based on offering the best solution to the consumers needs. This might be through lower prices, better quality, or some other factor that creates an advantage.
• 18.
  Overall Positioning Strategy Where the price continuum will meet somewhere along the price continuum.  The value proposition of a brand is important here, providing an answer as to why the consumer would choose to buy this product or brand.  In one positioning strategy they will receive a higher quality product and pay a higher price  Another strategy promises comparable or better quality with competition but with similar or lower price  Another position suggest same quality for a lower price  A business might try to offer lower price this however affects profit considerably.
• 19.
  Summary of Positioning Developing a positioning statement is the last step in differentiating and positioning a product/brand.  Position of brand should be concisely articulated in a positioning statement  The statement should include target segment, and their needs, the brand name and its objectives and how it differs from competition.  This statement can then be used in delivering the differentiated product and communicating its position to the target market.