Marketing Management

Front 1

Find sorry

Back 1

Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation).

Select one or more segments to enter (market targeting).

Establish and communicate the offering’s distinctive benefit(s) to each target segment (marketing positioning).

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A group of customers who shaw a similar set of needs and wants.

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Market Segment

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1. Naked solution containing the product and service elements that all segment members value.

2.Discretionary options that some members value.

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Flexible Market Offering

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Exist when all consumers have roughly the same preferences.

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Homogeneous Preferences

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Consumers vary greatly in there preferences

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Diffused Preferences

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Narrowly defined customer group seeking a distinctive mix of benefits.
Attractive when:
Customers have a distinct set of needs
Fairly small but has size, profit, and growth potential
Customers will pay a premium
_____ gains certain economies through specialization

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Niche

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Tailored to needs and wants of local customer groups in particular trading areas, neighborhoods, even individual stores.

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Local Marketing

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Customized, one-to-one marketing.

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Individual Marketing

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Traditional Segmentation Bases
Bases: factors that are utilized to group customers.

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Demographic Segmentation
Behavioral Segmentation
Psychographic Segmentation
Geographic Segmentation
Multi-Atribute Segmentation

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E.g., gender, age, income, education, generation, etc.
Easy to measure and predict; But, may not be correlated to needs
Honda Element “dorm room on wheels”; Average owner age = 42!! Boomers + Parents
Chrysler PT Cruiser –Nostalgia effect! ; Scion—Attracted Gen Y successfully

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Demographic Segmentation
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-Actual behavior or product usage (scanner data)
-User status (ex-, first-time, potential, regular)
-Usage rate (heavy beer drinkers account for 87% of beer consumed—7 times more than light beer drinkers; very loyal), Usage occasion etc.

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Behavioral Segmentation

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-State-of-mind issues (e.g., motives, personality, attitudes, opinions, values, lifestyles, interests, etc.)
-VALS classifies adults into 8 categories; www.sric-bi.com

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Psychographic Segmentation

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Geographic location
E.g., Major retailers stock products that suit local community

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Geographic Segmentation

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E.G., geoclustering combines multiple variables to identify smaller, better-defined target groups (PRIZM, ESRI)
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Multi Attribute Segmentation

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find it

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Need Based Segmentation

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7 Steps in Segmentation Process

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1. Needs Based Segmentation
2. Segment Identification
3. Segment Attractiveness
4. Segment Profitability
5. Segment Positioning
6. Segment 'Acid Test'
7. Marketing Mix Strategy

Front 17

Groups customers into segments based on similar needs and benefits sought by customer in solving a particular consumption problems.

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Needs Based Segmentation

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For each needs-based segment, determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable (actionable)

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Segment Identification

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Using predetermined segment attractiveness criteria, determine the overall attractiveness of each segment.

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Segment Attractiveness

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Determine segment profitability (net marketing contribution)

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Segment Profitability

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For each segment, create a 'value proposition' and product price positioning strategy based on that segment's unique customer needs and characteristics.

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Segment Positioning

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Create 'segment storyboards' to test the attractiveness of each segment's positioning strategy

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Segment ' Acid Test"

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Expand segment positioning strategy to include all aspects of the marketing mix product, price, promotion, and place.

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Market Mix Strategy

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(5) Effective Segmentation Criteria

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1. Measurable
2. Substantial
3. Accessible
4. Differentiable
5. Actionable

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1. Segment’s overall attractiveness
2. Fit with company’s objectives and resources

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Segment Evaluation

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5 Patterns of Target Market Selections

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1. Single-Segment Concentration
2. Selective Specialization
3. Product Specialization
4. Market Specialization
5. Full Market Coverage

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Focus on one segment

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Single Segment Concentration

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Select a number of segments

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Selective Specialization

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Specialize in making a certain product for several segments.

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Product Specialization

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Serve many needs of a particular customer group.

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Market Specialization

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Serve all customer groups with all the products they might need.

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Full Market Coverage

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The act of designing a firm’s offering and image to occupy a distinctive place in the minds of the target market.
--Consumers must understand the product’s ability to satisfy their needs and wants
--Relative to competition
--POP, POD, Frame of reference
--Manage marketing mix (4 Ps)

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Positioning

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To (target group and need) our (brand) is (concept) that (point-of-difference)
Example: To young, active soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine.

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Positioning Statement

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the products or sets of products with which a brand competes and which function as close substitutes.
---Announcing category benefits
---Comparing to exemplars
---Relying on the product descriptor

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Category Membership

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Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they couldn’t find to the same extent with a competitive brand.
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Points of difference

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Associations that aren’t necessarily unique to the brand but may in fact be shared with other brands.
--Category points-of-parity
--Competitive points-of-parity

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Points of Parity (pops)

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(3) Desirability Criteria

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1. Relevance
2. Distinctiveness
3. Believability

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(3) Deliverability

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1. Feasibility
2. Communicability
3. Sustainability

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Key Criteria for Points of Difference

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Desirability Criteria
Deliverability Criteria

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a company’s ability to perform in one or more ways that competitors can’t or won’t match.
--Few are sustainable, but a leverageable advantage can be used as a springboard to new advantages.
--Focus on building competitive advantages as customer advantages.

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Competitive Advantage

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Product

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Form
Features
Customization
Performance quality
Conformance quality
Durability
Reliability
Repairability
Style
Design

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Service

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Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance and repair
Returns