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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
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AGENDA
Segmentation, Targeting & Positioning
Metrics Mastery 6
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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?
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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
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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
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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
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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
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GROUPING CUSTOMER NEEDS & WANTS
Start by understanding different needs & wants in
overall market or sector
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PREFERENCE PATTERNS TO SEGMENT NEEDS
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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
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PEOPLE IN A POPULATION TO BE GROUPED / SEGMENTED
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BASES OF GROUPING - SHAPE
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BASES OF GROUPING - COLOUR
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BASES OF GROUPING- SIZE
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BASES OF GROUPING- SIZE & SHAPE
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BASES OF GROUPING- SHAPE & COLOUR
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Alternative Bases of Grouping
Which basis of grouping would be best?
Size (big /small)
Colour (yellow /
Blue)
Shape (stars /moons)
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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)
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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
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SEGMENTATION
Start with common Needs & Wants within market, then layer in geog-, demo-, psycho-graphic and behavioural characteristics
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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
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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
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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
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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
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BUSINESS SEGMENTATION
Similar to consumer segmentation in that you start with common needs or wants
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SEGMENTING FOR BUSINESS MARKETS
DemographicDemographic
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
Personal CharacteristicsPersonal Characteristics
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SEGMENTATION PROCESS
Consumer & Business
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STEPS IN SEGMENTATION PROCESS
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-MixStrategy
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POSITIONING STRATEGY
Developing & Communicating
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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
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DEVELOPING A POSITIONING STATEMENT
• Target Market Characteristics• Customer Need• Customer Benefit• Point of Differentiation
Should include;
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DIFFERENTIATION
“No Company can win if its product and services resemble every other product and offering”
(Kotler et al. 2009, pg. 10)
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WHY DIFFERENTIATE?
To avoid the commodity trap, marketers must start
with the belief that you can differentiate anything.
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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
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DEVELOPING A POSITIONING STATEMENT
• Target Market Characteristics• Customer Need• Customer Benefit• Point of Differentiation
Should include;
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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
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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
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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
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ANY QUESTIONS
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METRIC 6:PRICING
WHOLESALE TO RETAIL
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PRICING WHOLESALE TO RETAIL
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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 $
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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 (%)]
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[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
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LET’S COMPLETE THE WORKSHEET
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BEFORE YOU LEAVE TODAY
name cards
Front of the Class
Hand In:
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SEE YOU NEXT WEEK