1

Assistant Professor, MarketingPlease ensure all electronic devices are in “silent

mode”, “vibrate mode” or “turned off”

Anthony Francescucci

MKT 100-021WEEK 8 – SEGMENTATION,

TARGETING & POSITIONING

Welcome to

2

AGENDA

Segmentation, Targeting & Positioning

Metrics Mastery 6

3

CONSIDER THIS SCENARIO• YOU HAVE JUST INDENTIFIED THAT

YOU NEED A PRINTER TO GO WITH YOUR NEW COMPUTER. THINK ABOUT YOUR NEEDS FOR A PRINTER AND IDENTIFY TWO KEY PRINTER FEATURES THAT ARE MOST IMPORTANT IN MEETING YOUR PERSONAL PRINTING NEEDS.

What are your 2 most important printing needs?

4

WHAT ARE YOUR 3 MOST IMPORTANT?Printing Need Top 3 choice

Low cost 51

Quick printing speed 20

Ink printing 0

Laser printing 14

High Resolution 27

Network printing 11

Colour printing 28

Ease to use / setup 24

Extended warranty 5

Small Size 3

Noise Level 2

Review the printing needs options

You can vote for 3 of your top printing needs

Ask how many students rate each printing need as one of their top 3 needs

5

EFFECTIVE MARKETING REQUIRES…•Identi

fy and profile distinct groups of buyers who differ in their needs and preferences.

Segmentation

•Select one or more market segments to enter.

Targeting

•Establish and communicate the distinctive benefits of the market offering by getting customers to form a mental picture.

Positioning

6

THESE WORDS ARE NOT INTERCHANGEABLE

• is a group of customers who share a SIMILAR SET OF NEEDS AND WANTS within an overall market.

Market Segment

• is the process of identifying and categorizing the overall market into groups of customers with similar needs and wants (Market Segments).

Market Segmentation

• is the qualified available market segment which the company decides to pursue.

Target Market

7

MARKET & SEGMENT DIFFER

•refers to a group of buyers

•(THINK overall market)

Market

•refers to the subgroup of buyers within the Market that have a common need

Segment

•Baby Boomers (Age 45-63)

Market

•Female Baby Boomers who are empty nesters and are retired and enjoy reading

Segment

8

GROUPING CUSTOMER NEEDS & WANTS

Start by understanding different needs & wants in

overall market or sector

9

PREFERENCE PATTERNS TO SEGMENT NEEDS

10

MARKET SEGMENTS ARE;

• The role of the marketer is not to create the segment, but to IDENTIFY the segment and determine which to target

IDENTIFIED not created

• In indentifying market segments, begin with understanding common need and then layer in geographic, demographic, psychographic & behavioural characteristics

Starts with a COMMON NEED

11

PEOPLE IN A POPULATION TO BE GROUPED / SEGMENTED

12

BASES OF GROUPING - SHAPE

13

BASES OF GROUPING - COLOUR

14

BASES OF GROUPING- SIZE

15

BASES OF GROUPING- SIZE & SHAPE

16

BASES OF GROUPING- SHAPE & COLOUR

17

Alternative Bases of Grouping

Which basis of grouping would be best?

Size (big /small)

Colour (yellow /

Blue)

Shape (stars /moons)

18

Measurable

Accessible / Reachable

Substantial / SizableActionable

Differentiable

EFFECTIVE BASES OF SEGMENTATION

Which basis of grouping would be best?

Size (big /small)

Colour (yellow /

Blue)

Shape (stars

/moons)

19

SEGMENTATION OF PDA PREFERENCES

EASE OF USE

LOW

CO

ST

Low High

Low

Hig

h

▪▪▪▪▪

▪▪ ▪▪ ▪

▪▪▪▪▪

▪▪ ▪▪ ▪

▪▪▪▪▪

▪▪ ▪▪ ▪▪▪▪▪▪

▪▪ ▪▪ ▪

▪▪▪▪▪

▪▪ ▪▪ ▪

iphone

BB Storm

BB Curve

BB 8800

iphone BB Storm

BB Curve

Curve 8900

BB Pearl

BB Pearl

$680 $599 $599

$449 $499

20

SEGMENTATION

Start with common Needs & Wants within market, then layer in geog-, demo-, psycho-graphic and behavioural characteristics

21

LAYER IN OTHER SEGMENTATION VARIABLES

•Region, City or Metro side Density, Climate, province, country

Geographic

•Age, cohort generation, gender, family size, life-stage, education, income, occupation, nationality, ethnicity, tribal identity, family identity, religion, political party membership, nationality, social class.

Demographic

•Life-style, passions, interests, hobbies, personality, sociability, social class, values.

Psychographic

•Product usage rate, brand loyalty, product benefits sought, usage occasion characteristics, user status, buyer’s readiness to purchase, buy attitudes.

Behavioral

22

BEHAVIOURAL SEGMENTATION• Based according

occasions when develop a need

Occasions

• Based on benefits they seek

Benefits

• NonusersEx-userspotential users

User Status

• HeavyMediumLight

Usage Rate

• Different stages of readiness

Buyer-Readiness

• Hard-core• Split• Shifting• Switchers

Loyalty Status

• EnthusiasticPositiveIndifferentNegativeHostile

Attitude

23

SEGMENTATION EXAMPLE

Car buying market

Young, middle income car buyers

seeking low cost basic

transportation

seeking a luxurious driving experience

seeking a performance

oriented machine

Overall Market

Dem

o-gr

aphi

csSe

gmen

t N

eeds

24

SEGMENTATION EXAMPLE

Car buying market

Young, middle income car buyers

seeking low cost basic

transportation

seeking a luxurious driving experience

seeking a performance

oriented machine

Overall Market

Target Market

Dem

o-gr

aphi

csSe

gmen

t N

eeds

25

BUSINESS SEGMENTATION

Similar to consumer segmentation in that you start with common needs or wants

26

SEGMENTING FOR BUSINESS MARKETS

DemographicDemographic

Operating VariableOperating Variable

Purchasing ApproachesPurchasing Approaches

Situational FactorsSituational Factors

Personal CharacteristicsPersonal Characteristics

27

SEGMENTATION PROCESS

Consumer & Business

28

STEPS IN SEGMENTATION PROCESS

Needs-based segmentation

Segment identification

Segment attractiveness

Segment profitability

Segment positioning

Segment acid test

Marketing-MixStrategy

29

POSITIONING STRATEGY

Developing & Communicating

30

POSITIONING Is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market

While it starts with a product or service, it is not what you do to a product, but what you do to the mind of the prospect

You position the product in the mind of the prospect• You marketing mix reflects the positioning you are trying establish

with your target market

31

DEVELOPING A POSITIONING STATEMENT

• Target Market Characteristics• Customer Need• Customer Benefit• Point of Differentiation

Should include;

32

DIFFERENTIATION

“No Company can win if its product and services resemble every other product and offering”

(Kotler et al. 2009, pg. 10)

33

WHY DIFFERENTIATE?

To avoid the commodity trap, marketers must start

with the belief that you can differentiate anything.

34

Product Personnel

Channel Image

DIFFERENTIATION STRATEGIESFeatures

Performance

Durability

Style, Design

Ease of Order

DeliveryInstall

Maintenance

Coverage

Expertise

Performance

Salespeople

Cust. Service

Tech Support

Repair Team

Character & Value Prop

Distinctive Way

Emotional Power

Cost

35

DEVELOPING A POSITIONING STATEMENT

• Target Market Characteristics• Customer Need• Customer Benefit• Point of Differentiation

Should include;

36

LET’S LOOK AT A POSITIONING STATEMENT

Mountain Dew: To young, activesoft-drink consumers who have

little time for sleep, Mountain Dewis the soft drink that gives you

more energy than any other brandbecause it has the

highest level of caffeine.

Customer Benefit

POD

Customer Need

Target MarketCharacteristic

s

37

iPod Shuffle $55 (1GB)

iPod Nano $169 (8GB)

iPod Touch $329 (8GB)

HOW IS APPLE POSITIONING IPOD?

Younger, music listening consumer who may

be looking for a basic music listening device , at a low cost, because it offers a

limited feature set

be looking for a more enriching listening

experience, from an easy to navigate device because it

has a patented scroll wheel design

be looking for a feature rich multi-use device, that is

integrated with other applications, because it does

more than just play music

38

iPod Shuffle $55 (1GB)

iPod Nano $169 (8GB)

iPod Touch $329 (8GB)

WHAT ARE THE DIFFERENTIATION STRATEGIES?

Younger, music listening consumer who may

be looking for a basic music listening device , at a low cost, because it offers a

limited feature set

be looking for a more enriching listening

experience, from an easy to navigate device because it

has a patented scroll wheel design

be looking for a feature rich multi-use device, that is

integrated with other applications, because it does

more than just play music

Cost Product - Ease of Use

Product - Feature rich

39

ANY QUESTIONS

40

METRIC 6:PRICING

WHOLESALE TO RETAIL

41

PRICING WHOLESALE TO RETAIL

42

EXAMPLE 1Aaron owns a small furniture store. He buys BookCo brand bookcases from a local wholesaler for $200 per unit. Aaron is considering buying directly from BookCo, and he wants to calculate what he would pay if he received the same price that BookCo charges his wholesaler. Aaron knows that the wholesaler’s percentage margin is 30%.

Manufacturer Wholesaler RetailerBookCo Local

Wholesaler

Aaron’s Furniture

Store

= Manufacturer’s Price $

Manufacturer’s Cost $+ Manufacturer’s Margin $

= Wholesaler’s Price $

Wholesaler’s Cost $+ Wholesaler’s Margin $

Retailer’s Cost $

43

EXAMPLE 1Aaron owns a small furniture store. He buys BookCo brand bookcases from a local wholesaler for $200 per unit. Aaron is considering buying directly from BookCo, and he wants to calculate what he would pay if he received the same price that BookCo charges his wholesaler. Aaron knows that the wholesaler’s percentage margin is 30%.

Wholesaler’s Cost = Wholesaler’s Selling Price ($) * [1 – Wholesaler’s Margin (%)] = $200 * [1 – 30%]

= $140

Mfg Selling Price ($)

Manufacturer Wholesaler RetailerBookCo Local

Wholesaler

Aaron’s Furniture

Store

Wholesaler’s Selling Price = Wholesaler’s Cost ÷ [1 – Wholesaler’s Margin (%)]

44

[1 – Retailer’s Margin (%)] Retailer’s Selling Price = Retailer’s Cost

EXAMPLE 2Clyde’s Concrete sells 100 cubic yards of concrete for $300 to a retail landscaper. The landscaper wants to include this in her bill of materials, to be charged to the homeowner. Further she wants to earn a 25% margin. What is the landscaper’s selling price for the concrete?

Wholesaler Retailer CustomerClyde’sConcrete Landscaper

Retailer’s Selling Price = $300 / (1 – 25%)

= $400

Homeowner

Wholesale Selling Price

45

LET’S COMPLETE THE WORKSHEET

46

BEFORE YOU LEAVE TODAY

name cards

Front of the Class

Hand In:

47

SEE YOU NEXT WEEK