marketing segmentation, targeting and provisioning; Product

MKT Module 4

Market Segmentation Steps

1. Identify bases for segmenting the market.

2. Develop profiles of resulting segments.

Market Targeting Steps

1. Develop measures of segment attractiveness.

2. Select target segment(s).

Market Positioning Steps

1. Develop positioning for each target segment.

2. Develop a marketing mix for each target segment.

Market Segmentation

the division of a market into distinct groups of buyers with different needs, characteristics, or behaviors and who might require separate products or marketing mixes.

Behavioral Segmentation

Benefits- segmented by the benefits the buyers seek from a product or service.

Usage- segmenting buyers by the frequency they use/buy products.

Application- by the way buyers use the products

Demographic Segmentation

Profile of customers

Age, race, ethnicity

Geographic Segmentation

Where are the customers located?

How can they be reached?

Geodemographics (neighborhood geography)

combines both demographics and geographics to analyze consumer behavior based on their geographic location and demographic characteristics.

Psychographic Segmentation

personality characteristics, motives, lifestyle

The VALS Types

Innovators—successful, sophisticated, take-charge people
Thinkers—mature, satisfied, comfortable, well educated
Achievers—goal oriented, conservative, predictable, stable
Experiencers—young, enthusiastic, seek variety and
excitement
Believers—conservative, conventional, believe in established
codes
Strivers—trendy, fun loving, seek approval, job vs. career
Makers—practical, self sufficient, suspicious of large institutions
Survivors—few resources, concerned with safety, low
motivation

Effective Segmentation (5)

Measurable - Size, purchasing power, profiles of segments can be measured.

Accessible- Segments must be effectively reached and served.

Substantial- Segments must be large or
profitable enough to serve.

Differential- Segments must respond
differently to different marketing
mix elements & actions.

Actionable- Must be able to attract and serve the segments.

Market Targeting

The process of evaluating
each market segment’s
attractiveness and
selecting one or more
segments to enter.

Evaluating Market Segments

1. Segment Size and Growth- Analyze sales, growth rates and expected profitability.

2. Segment Structural Attractiveness- Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.

3. Company Objectives and Resources- Company skills & resources relative to the segment(s). Look for Competitive Advantages.

Mass marketing

Same product to all consumers
(no segmentation)

Focus is on common (not different) needs of
consumers.
Product and marketing program are geared to the
largest number of buyers.
Uses mass advertising and distribution.

Segment Marketing

Different products to one or more segments
(some segmentation)

Firm targets several market segments and designs
separate offers for each.
The goal is to have higher sales and a stronger
position with each market segment.
This approach increases the costs of doing
busine

Niche Marketing

Different products to subgroups within segments(more segmentation)

The focus is acquiring a large share of one or a few
segments of niches.
Generally, there are fewer competitors.
There is some risk in focusing on only one market

Micromarketing

Products to suit the tastes of individuals or locations (complete segmentation)

Market Positioning

The arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of the
target consumer.

Positioning

How consumers perceive a product relative to the competition

Perceptual Map

a two-dimensional graph that
visually shows where your product stands, or should
stand, relative to your competitors, based on criteria
important to buyers.

Reposition

an effort to “move” a product to a different place
in the minds of consumers.

Layers of a Product

AUGMENTED PRODUCT Warranty, delivery, support website
CORE PRODUCT - lawn neighbors envy
ACTUAL PRODUCT- lawnmower

Convenience Products

The customer usually buys frequently, immediately, & with a minimum comparison & buying effort
 Newspapers
 Candy
 Fast Food

Shopping Products

The customer compares carefully on suitability, quality, price, & style
 Furniture
 Cars

Specialty Products

consumer products & services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
 Medical services
 Designer clothes
 High-end electronics

Unsought Products

The consumer does not know about or knows about but does not normally think of buying
 Life insurance
 Funeral services
 Blood donations

Industrial Products

Products purchased for further processing or for use in conducting a business
 Materials & parts
 Capital items
 Supplies & services

Product and Service Decisions

Product Attributes → Branding → Packaging → Labeling → Product Support Service

Product & Service Attributes

Product features, quality, style and design

Branding

is the name,
term, sign, or design—
or a combination of
these—that identifies
the maker or seller of a
product or service.

Packaging

for convenience, shipping, green. influences consumers

Labeling

identify the product or brand, describe
attributes, & provide promotion

Product Support Services

Fast and reliable customer assistance

Product line

is a group of products that are
closely related because they function in a similar manner.

Product line strength

is the number of items in the
product line

Line stretching

adding new products that are more or less expensive than existing

Line filling

adding new products to the line to fill gaps

Product Mix

consists of all the products &
items that a particular seller offers for sale

Product & service decisions

width - number of different product lines the company carries

length - total number of items the company carries within its product lines

depth - number of versions offered of each product in the line

Consistency - how closely related the various product lines are in end use, production requirements, distribution channels, or some other way