Marketing Management - Segmentation, Study notes of Marketing Management

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 Product-Related SegmentationProduct-Related Segmentation

Dividing a consumer population into

homogeneous groups based on

characteristics of their relationships to the

product

◦ (^) Can take the form of segmenting based on:  (^) Benefits that people seek when they buy  (^) Usage rates for a product  (^) Consumers’ brand loyalty toward a product

 Brand LoyaltyBrand Loyalty

◦ (^) Segmenting consumers grouped according to the strength of brand loyalty felt toward a product ◦ (^) Frequent flyer programs of airlines and many hotels

 Using PsychographicUsing Psychographic

Segmentation Segmentation

◦ (^) Psychographic profiles produce rich descriptions of potential target markets ◦ (^) Greater detail aids in matching a company’s image and its offerings with the types of consumers who are likely purchasers

SEGMENTING BUSINESS MARKET

DEMOGRAPHIC: Industry, Company size, Location.

OPERATING VARIABLES: Technology, User or Non-user status, Customer capabilities.

PURCHASING APPROACHES: Purchasing function organization, Power structure, Nature of existing relationships, General purchase policies, Purchasing criteria.

SITUATIONAL FACTOR: Urgency, Specific application, Size of order.

PERSONAL CHARACTERSTICS: Buyer-seller similarity, Attitudes towards risk & Loyalty.

BUSINESS BUYERS can be FIRST TIME PROSPECTS, NOVICES, SOPHISTICATES.

INDUSTRIAL BUYERS can be PROGRAMMED, RELATIONSHIP, TRANSACTION & BARGAIN HUNTERS.

**1. Standardization

2. Differentiation**

4 P’s, People, Images, Service, Channel

3. Focus

Positioning

Simply, positioning is how target market is defined

to the competitors.

[A] Marketing environment

[B] Competitive advantage

 Concentrated Marketing (nicheConcentrated Marketing (niche

marketing): marketing): when a firm commits all of its

marketing resources to serve a single

market segment

 Micromarketing:Micromarketing: involves targeting

potential customers at a very basic level,

such as by ZIP code, specific occupation,

lifestyle, or individual household

 Selecting and Executing a StrategySelecting and Executing a Strategy

◦ No single, best choice strategy suits all firms ◦ Determinants of a market-specific strategy:  (^) Company resources  (^) Product homogeneity  (^) Stage in the product life-cycle  (^) Competitors’ strategy

◦ Positioning mapPositioning map Graphic illustration that shows differences in consumers’ perceptions of competing products

◦ RepositionReposition Marketing strategy to change the position of its product in consumers’ minds relative to the positions of competing products

Positioning Strategies

1.Product Attributes 2.Benefits 3.Usage Occasions 4.Users 5.Against a Competitor 6.Away from a Competitor 7.Product Classes

Positioning Differences

1.Important 2.Distinctive 3.Superior 4.Communicable 5.Preemptive 6.Affordable 7.Profitable

Form (^) turesFea- mance^ Perfor- Quality

Conform- ance Quality

Dura- bility

Relia- bility

Repair- ability Style^ Design

Choosing the right Competitive advantage Choosing the right Competitive advantage

Product Differentiation Product Differentiation

More for More

More for More

More for the Same

More for the Same

More for Less

More for Less

The same for less

The same for less

Less for much less

Less for much less

Price More The same Less More

The Same

Less

Benefits