Chapter 7: Segmentation, Targeting and Positioning. The STP Process

Transcription

1 Chapter 7: Segmentation, Targeting and Positioning The STP Process Step 1: Establish Overall Strategy or Objectives - Must be consistent with and derived from the firm s mission and objectives and current situation SWOT Step 2: Segmentation Bases - Develops descriptions of different segments, their needs, wants and characteristics; this helps the firms better understand the profile of the customers in each segment - Geographic Segmentation: the grouping of consumers on the basis of where they live - Demographic Segmentation: the grouping of consumers according to easily measured, objective characteristic such as age, gender, income and education o Gillette splits into gender fusion razor ads for men and Venus ads for women - Psychographic Segmentation: how consumers describe themselves; allows people to describe themselves by using those characteristics that help them chose how they occupy their time (behaviour) and what underlying psychological reasons determine those choices o Self-Values: goals for life, not just the goals one wants to accomplish in one day; a component of psychographics that refers to overriding desires that derive how a person lives his or her life o Self-Concept: the image a person has of himself or herself o Lifestyle: refers to the way a person lives his or her life to achieve goals o VALS: a psychographical tool developed by Strategic Business Insights, classifies consumers into 8 segments innovators, thinkers, believers, achievers, strivers, experiencers, makers and survivors - Behavioural Segmentation: groups consumers based on the benefits they derive from products or services, their usage rate, their user status and their loyalty o Benefit segmentation: groups consumers based on the benefits they derive from products/services o Loyalty segmentation: strategy of investing in retention and loyalty initiatives to retain the firm s most profitable customers - Multiple Segmentation Methods: o Demographic and geographic segmentation is easy but they don t help marketers determine their customer needs o Geodemographic segmentation: grouping demographic and geographic and lifestyle characteristics Consumers in the same neighbourhoods tend to buy the same cars, appliances, apparel etc. PSYTE cluster: the grouping of all neighbourhoods in Canada into 60 different lifestyle clusters Step 3: Evaluate Segment Attractiveness - Identifiable: who is within their market to be able to design products or services to meet their needs o The Gap, Gap Kids, babygap - Reachable: consumers must know the product exists, understand what it can do for them and how to buy it - Responsive: customers in the segment must react similarly and positively to the firm s offering - Substantial and Profitable: measure the size and potential growth of target markets Step 4: Select Target Market - Undifferentiated segmentation strategy (mass marketing) o A marketing strategy a firm can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups o Salt, sugar, greeting cards - Differentiated Segmentation Strategy

2 o A strategy through which a firm targets several market segments with a different offering for each o La Senza, La Senza Express and La Senza Girl - Concentrated (Niche) Segmentation Strategy o A marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market s needs o Cora s focusing on breakfast and brunch food o Abercrombie and Fitch year olds - Micromarketing (one-to-one) marketing o An extreme form of segmentation that a tailors a product or service to suit an individual customer s wants and needs o Build-A-Bear workshop, Yo-yos o Mass customization: the practice of interacting on a one-to-one basis with many people to create custom made products or services; providing one-to-one marketing to the masses NikeID lab Step 5: Identify and Develop Positioning Strategy - Positioning: the mental picture that people have about a company and its products or services relative to competitors o Friends, family, relatives, reference groups, TV and internet, newspaper, personal experience - Positioning Statement: expresses how a company wants to be perceived - Value o Price and quality o Gillette the best a man can get o Walmart Save money. Live Better - Product Attributes: focuses on attributes most important to the target market o Energizer it keeps going and going o KFC finger licking good - Benefits/Symbolism: meanings created behind brands tony the tiger, gerber baby o Canon Express yourself o L Oreal- because I m worth it - Competition: o Capital One hands in your pocket - Market Leadership o Canadian tire, RBC, HP, Google o Being #1 Positioning by Using Perceptual Mapping - Perceptual map: displays, in two or more dimensions, the position of products or brands in the consumer s mind - Ideal point: the position at which particular market segment s ideal product would lie on a perceptual map o Determine consumers perceptions and evaluations of the product/service in relation to competitors o Identify competitors position o Determine consumer preferences o Select position o Monitor the positioning strategy Repositioning - Junk food companies trying to reposition themselves as offering healthier choices - McDonalds and their Bistro menu - Pizza Pizza with multigrain dough - Tiffany & Co ; luxury brand until they tried to reach the middle class; upper class got pissed so Tiffany increased prices of other jewelry

3 - Brand Repositioning: a strategy in which marketers change a brand s focus to target new markets or realign the brand s core emphasis with changing market preferences Chapter 16: Global Marketing Growth of the Global Economy: Globalization of Marketing and Production - Globalization of production (off shoring): refers to manufacturers procurement of goods and services from around the globe to take advantage of national differences in the cost and quality of various factors of production o Eg. Labour, energy, land, capital o Not all offshoring is about inexpensive labour - General Agreement on Tariffs and Trade (GATT): agreement established to lower trade barriers, such as high tariffs on imported goods and restrictions on the number and types of imported precuts that inhibit a free flow of goods across boarders - World Trade Organization (WTO): replaces the GATT in 1994 o Differs from the GATT in that the WTO is an established institution based in Geneva, Switzerland, instead of simply an agreement o Represents the only international organization that deals with the global rules of trade among nations - International Monetary Fund (IMF): establish as a part of the original GATT; primary purpose is to promote international monetary cooperation and facilitate the expansion and growth of international trade - Work Bank Group: a development bank that provides loans, policy advice, technical assistance and knowledge sharing services to low-and-middle income countries in an attempt to reduce poverty Assessing Global Markets (PEST) - Political/Legal - Economic Analysis - Socio-Cultural Analysis - Technology & Infrastructure Analyzing the Political and Legal Environment - Trade Sanctions: penalties or restriction imposed by one country over another country for importing and exporting of goods, services and investments - Tariffs (duty): a tax levied on a good imported into a country o Dumping: the practice of selling a good in a foreign market at a price that is lower than its domestic price or below its cost - Quotas: designated the maximum quantity of product that may be brought into a country during a specific time period - Boycott: a group s refusal to deal commercially with some organization to protest against its policies - Exchange Control: refers to the regulation of a country s currency exchange rate o Exchange Rate: the measure of how much one currency is worth in relation to another o Countertrade: trade between two countries where goods are traded for other goods and not for hard currency - Trade Agreements: intergovernmental agreement designed to manage and promote trade activities for specific regions o Trading Block: consists of those countries that have signed a particular trade agreement o European Union: economic and monetary union that contains 28 countries Introducing the Euro eliminated price fluctuations o North American Free Trade Agreement (NAFTA)

4 Trade issues such as tariffs and quotas, among Canada, US and Mexico softwood lumber disputes settled between Canada and US through WTO o Central American Free Trade Agreement (CAFTA) Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and US o Mercosur (aka Southern Common Market) Covers south America, in 1995 they created Free Trade Area of the Americas (FTAA) o Association of Southeast Asian Nations (ASEAN) Originally to promote security in S.Asia during Vietnam war, now it builds economic stability and lowers trade restrictions among the six members - Political Risk Analysis o Must assess political, socio-economic, and security risks of doing business with a country Change in government, violence and imposition of restrictive trade policies Analyzing the Economic Environment - Evaluating the general economic environment - Generally healthy economies provide better opportunities for global marketing expansions o Trade deficit: results when a country imports more goods than it exports o Trade surplus: results when a country exports more goods than it imports o Gross Domestic Product (GDP): the market value of goods and services produced by a country in a year; the most widely used standardized measure of output o GNI: Value includes economic impact of firms earning income globally Better than GDP o Purchasing Power Parity (PPP): a theory that state that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed in the same currency o Human Development Index (HDI): a composite measure of three indicators of the quality of life in different countries; life expectancy at birth, educational attainment and whether the average incomes are sufficient to meet the basic needs of life in that country - Evaluating Market Size and Population Growth Rate o Less developed nations experiencing growth; not developed nations more immigration here - Evaluating Real Income income adjusted for inflation Analyzing Socio-Cultural Factors - 5 dimensions 1. Power Distance: willingness to accept social inequality as natural 2. Uncertainty Avoidance: the extent to which the society relied on orderliness, consistency, structure and formalized procedures to address situation that arise in daily life 3. Individualism: perceived obligation to and dependence on groups 4. Masculinity: the extent to which dominant values are male-oriented. A lower masculinity ranking indicated that men and women are treated equality in all aspects of society; a high masculinity rating suggests that men dominate in positions of power 5. Time Orientation: short versus long term orientation a country that tends to have a long term orientation values long term commitments and is willing to accept a longer time horizon for, say, the success of a new product introduction Analyzing Technological and Infrastructure Capabilities - Infrastructure: the basic facilities, services and installation needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions such as schools, post offices and prisons Choosing a Global Entry Strategy - Exporting: producing goods in one country and selling them in another RIM sells BLACKBERRY in Japan

5 - Franchising: agreement between a firm and another firm (franchisor and franchisee) to operate a business and use a name and format developed and supported by the franchisor STARBUCKS - Strategic Alliance: a collaborative relationship between independent firms, through the partnering firms do not create and equity partnership; that is they do not invest in one another STAR ALLIANCE - Joint Venture: formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared Tesco (UK) purchased 50% of Ting Hsin (CHINA) which it owns a operates a market chain Hymall - Direct Investment: when a firm maintains 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries BOMBARDIER Choosing a Global Marketing Strategy - Target Market: segmentation, targeting and positioning o More complicated than domestic STP o Global expansion is more difficult with cultural nuances o Subcultures must also be considered o Consumers view products and their role as consumers differently in different countries - Global Marketing Mix o Global product or service strategies Three potential strategies Sell the same product or service in both the home country market and host market Sell a product or service similar to that sold in the home country but include minor adaptations Sell a totally new product or service o Global Pricing Strategies There may be restrictions placed by the government In Belgium, Italy, Spain, Greece and France promotional sales are only allowed 2 a year In more European countries retailers can t sell below cost and cant advertise sales on merchandise until they have been there over a month o Global Distribution Strategies Global distribution chains involve intermediaries, exporters, importers and different transportation systems that add to the cost of the final selling price o Global Communication Strategies Some countries only offer state controlled media Advertising regulations differ Nestle Kit Mail Ethical Issues in Global Marketing - Environmental Concerns: include, but are not limited to, the excessive use of natural resources and energu, refuse from manufacturing processes, excess trash created by consumer goods packaged, and hard-to-dispose-of products such as tires, cell phones and computer monitors - Global Labour Issues: includes concerns about working conditions and wages paid to factory workers in developing countries - Impact on Host Country Culture o Cultural imperialism: the belief that one s own culture is superior to that of other nations; can take the form of an active, formal policy or a more subtle general attitude