Market segmentation, targeting, and positioning Marketing 3331

Transcription

1 Market segmentation, targeting, and positioning Marketing 3331

2 IN MARKETING NEW S TODAY 2

3 Stand By You Since 1988, our employees have helped provide more than 79 million cans of water to cities across the U.S. that were impacted by natural disasters. But there s more to do. By the end of 2018, our brewery in Fort Collins, CO will be joining our brewery in Cartersville, GA to deliver even more clean drinking water to communities in need. Source: / watch?v=cxgumtrlm5g 3

4 Blaze and Ice Mountain Dew Super Bowl Commercial 2018 with Morgan Freeman and Peter Dinklage and Doritos Blaze Source: / watch?v=4ekyr_il5eu 4

5 Japanese ads of 2017 Source: / watch?v=2joeqzbpmyo 5

6 Zappos.com Strategy: Segments + Service = WOW A Clear Market Segmentation Strategy Founder: Tony Hsieh Origin: zapatos, or shoes Offer a huge selection of shoes to people who will buy them online. Expanded their products to clothes, accessories and beauty aides. 6

7 Zappos.com Strategy: Segments + Service = WOW 7

8 WOW Customer Service Mandatory 4-week customer service training He offers one-month s salary for an new-hire employee that takes the training If you take the money and run, you re not right for this company Few have ever taken the money and left. 8

9 Your culture is your brand. As we grow as a company, it has become more and more important to explicitly define the core values from which we develop our culture, our brand, and our business strategies. 9

10 1 Market Segments Relatively homogeneous groups of perspective buyers that that result from the market segmentation process

11 2 Market Segmentation involves aggregating prospective buyers into groups, or segments, that: 1. Have common needs 2. Will respond similarly to a marketing action.

12 3 Product Differentiation a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products

13 Why segmentation? Linking the various buyers needs and the organizations marketing program It s a means to an end. It leads to a tangible marketing action that could increase sales and profitability Grouping people together by similarity of their needs and benefits they are looking for in order to make a purchase 13

14 Market segmentation links market needs to an organization s marketing program through marketing mix actions 14

15 Market Product Grid a framework to relate the market segments of potential buyers to products offered or potential marketing actions 15

16 A market-product grid shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness Where do they get these numbers? - MR 16

17 Why segment markets? One-Size-Fits-All Mass Markets No Longer Exist One Product and Multiple Market Segments Multiple Products and Multiple Market Segments 17

18 One-Size-Fits-All Mass Markets No Longer Exist Targeting high-income and low income families P&G expects segmentation to increase sales, profit, and return on investment 18

19 One Product and Multiple Market Segments When a organization produces only one single product or service and attempts to sell it to two or more market segments Avoids extra costs of development and producing additional versions of the product, thus not having to do a separate promotional campaign 19

20 One Product and Multiple Market Segments Magazines and books are single products directed towards two or more distinct market segments. Who reads Harry Potter? Pre-teens, teens, and adult segments around the world in over 67 different languages. 20

21 Multiple Products and Multiple Market Segments Products targeted to a different type of customer Producing multiple versions of essentially the same product a vehicle But for this to work: 1. Must meet customer needs 2. Doesn t reduce quality or increase price 3. Adds to Ford s sales revenue and profit 21

22 Segments of One Back in the day economies of scale in manufacturing mass-produced items so affordable that people were willing to compromise their individual tastes and settle for standardized products Mass Customization Due to technology and flexible manufacturing, tailored products and services can be produced in mass quantities to individual costumers on a high-volume scale Build-to-Order (BTO) 22

23 The Segmentation Tradeoff: Synergies vs. Cannibalization Organizational Synergy Cannibalization Tiffany/ Walmart Strategies 23

24 4 Organizational Synergy the increased customer service value achieved through performing organizational functions (i.e. marketing or manufacturing) More products Improved quality of existing products Lower prices Easier access to products through channels of distribution

25 5 Tiffany/ Walmart Strategies Offering variations of the same basic offering to high-end and lowend segments

26 Tiffany/ Walmart Strategies 26

27 6 Cannibalization when new products and new stores steal customers and sales from older, existing products

28 Cannibalization successful, relatively affluent, fashion conscious women value-conscious women who want a casual lifestyle at work and home 28

29 The five key steps in segmenting and targeting markets that link market needs to a firm s marketing program 29

30 Step One Group potential buyers into segments 30

31 Group potential buyers into segments Opened a restaurant on campus at an urban university that offers day and night classes. You offer the basics of all Wendy s restaurants You are free to set hours and local advertising to generate profit 31

32 Criteria to Use in Forming the Segments Similarity of Needs of Potential Buyers within a Segment Potential for Increased Profit Similarity of Needs of Potential Buyers among Segments 32

33 Criteria to Use in Forming the Segments Differences of Needs of Buyers Among Segments Potential of a Marketing Action to Reach a Segment 1. How will they react to it? 2. Will they eventually purchase the brand? 33

34 7 4 Ways to Segment Consumer Markets Geographic Segmentation Demographic Segmentation Psychographic Segmentation Behavioral Segmentation

35 Geographic Segmentation Geographic Segmentation Based on where prospective customers live and work Too spicy for the East and not spicy enough for the West and Southwest Texas and California has spicier cheese to accomodate thie region 35

36 Demographic Segmentation Demographic Segmentation Based on some objective, physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers More than half the U.S. households have 1-2 individuals, thus serving sizes are 1-2 servings per can 36

37 Psychographic Segmentation Psychographic Segmentation Based on subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers Campbell s Star Wars Ad: New Kids / watch?v=elyrllt2sym Campbell s Star Wars Ad: Dads / watch?v=elyrllt2sym 37

38 Behavioral Segmentation Behavioral Segmentation Based on product features that are important to different customers College dorm students prepare their own food and snack late at night in dorm rooms that are very limited on space MicroFridge offers a combo microwave, refrigerator, freezer, and charging station appliance 38

39 Behavioral Segmentation Behavioral Segmentation Based on usage rates during a specific period of time; also called frequency marketing Many airline companies have frequent flier programs to encourage passengers to fly with them often and create loyal customers 39

40 8 80/ 20 Rule a concept that suggests 80 percent of a firm s sales are obtained from 20 percent of its customers 80% of income in Italy was received by 20% of the Italian population

41 Segmentation bases, variables, and breakdowns for U.S. consum er m arkets 41

42 Comparison of various kinds of users and nonusers for Wendy s, Burger King, and McDonald s fast-food restaurants; adults asked about fast-food preferences 42

43 9 Segment Variables Students Dorms, Sororities and fraternities OR Apartments Day OR Night Commuters Non-Students Faculty & Staff Residents in Area Workers in Area 43

44 Ways to Segment Organizational Markets Geographic Segmentation Personal sales calls Demographic Segmentation Printing needs vary by people Behavioral Segmentation The size of the firm determines the copier product 44

45 Segmentation bases, variables, and breakdowns for U.S. organizational markets 45

46 Step Two Group products into categories 46

47 Individual Wendy s Products Founder Dave Thomas promised four basic items: 1. Hot N Juicy hamburgers 2. Frosty Dairy Desserts (Frostys) 3. French Fries 4. Soft Drinks 47

48 Groupings of Wendy s Products Breakfast Lunch Dinner Between Meal Snack After Dinner Snack 48

49 Wendy s new products and innovations target specific market segments based on a customer s gender, needs, or university affiliation 49

50 Step Three Develop a market-product grid and estimate the size of the markets 50

51 Forming a Market Grid Base on past purchase data Guesstimate if funds are low 51

52 Selecting a target market for your Wendy s fast-food restaurant next to an urban university (target market is shaded) 52

53 Step Four Select the target markets 53

54 Criteria to Use in Selecting Target Markets 1. Divide the market into segments 2. Actually pick the target segments 54

55 Criteria to use in selecting target markets Market Size Expected Growth Competitive Position Cost of Reaching the Segment Organizational Compatibility 55

56 Choose the products and segments No Breakfast Too small a market and incompatible with your objectives and resources Four Student Segments Only Look back (Slide 51); Not the three nonstudent segments but not turning their business away either! 56

57 Step Five Taking marketing actions 57

58 Wendy s Segmentation Strategy 1. Day Commuters 2. Between-Meal Snacks 3. Dinners to Night Commuters 4. Keep an eye on competition 58

59 Advertising actions to market various meals to a range of possible market segments of students 59

60 Keeping an Eye on Competition Simple menu and décor Modest prices Fresh beef Fresh potatoes from specific farms Trans-fat-free menu (cooking with peanut oil) 60

61 Keeping an Eye on Competition 61

62 Apple s Segmentation Strategy 62

63 Apple s Segmentation Strategy 63

64 Apple s Segmentation Strategy 64

65 10 Product Positioning the place a product occupies in consumers minds based on important attributes relative to competitive products 65

66 11 Two Approaches to Product Positioning Head-to-Head Positioning Competing directly with competitors on similar product attributes in the same target market Differentiation Positioning Involves seeking a less competitive, smaller market niche in which to locate a brand 66

67 67

68 Product Positioning with Perceptual Maps 1. Identify Important Attributes for a Product or Brand Class 2. Customers Ratings of Competing Products or Brands on These Attributes 3. Customer s Ratings of the Company s Products or Brands on These Attributes 4. Reposition the Company s Products or Brands in the Minds of Consumers 68

69 12 Perceptual Maps a means of displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm s own product or brand 69

70 Repositioning Chocolate Milk Identify Important Attributes for Adult Drinks Discover How Adults See Competing Drinks Discover How Customers See Chocolate Milk Reposition Chocolate Milk to Make It More Appealing to Adults 70

71 A perceptual map of the location of beverages in the minds of American adults 71

72 The strategy American dairies are using to reposition chocolate milk to reach adults 72

73 Repositioning Chocolate Milk 73