w6 market segmentation and positioning

STP (segmenting, targeting and positioning)

• enhance company’s competitive position

• identify market growth opportunities

• effective matching of company resources to targeted segments so grater return on marketing investment (ROMI)

market segmentation

division of a market into identifiable segments where individuals have common needs with no overlap from other segments

• new segment to offer a product

3 goals of market segmentation

• leverage scarce resources

• ensure elements of marketing mix meet different segment needs

• allows for focus on customer needs efficiently

product differentiation

curate new offering based off a new segment

• find new product to offer new segment

breakdown method in market segmentation

market consists of similar customers, identify groups that share particular differences

buildup method in market segmentation

market consists of customers who are different, must find similarities

segment heterogenity

identify market segments in which identifiable differences exist between segments

member homogeneity

similarities exist between members within each segment

4 criteria for effective market segmentation

substantial, measurable, differentiable, accessible

4 stages of marketing for b2b segmentation

1. pre-segmentation to define segmentation and purpose

2. segmentation to determine variables, models and target segments

3. implementation for leadership and resource allocation, marketing mix adjustment

4. evaluation to measure customer satisfaction, sales performance

3 segmentation bases

profile, behavioural, psychological

life stage analysis

people have varying amount of disposable income and different needs at different points in time

social interaction perspective in usage segments

considers symbolic aspects of usage and social meanings attached to consumption of socially conspicuous offerings

experiential consumption perspective in usage segments

considers emotional and sensory experiences as a result of usage

functional utilisation perspective in usage segments

considers functional use of products and their attributes in different situations

b2b market segmentation

intensification of a group of customers with some common characteristic relevant in explaining their response to a suppliers marketing stimuli

2 groups of interrelated variables used to segment b2b markets

• organisational characteristics including firmographics, economic and geographic

• characteristics surrounding the decision making process including DMU, purchase strategy, relationship type, attitude to risk, choice criteria, purchase situation

choice criteria

business markets can be segmented on the basis of specifications of offerings they choose p

purchase situations

companies segment markets on basis of how organisations buy or do not buy

target markets

determine which of the segments should be targeted

DAMP

• distinct so each segment is different and none are mutually exclusive

• accessible so buyers can be reached through promotional programmes

• measurable as each segment should be easy to identify

• profitable as each segment should be large enough to provide stream of constant future revenues

undifferentiated approach

no delineation between segments and market (one mass market)

differentiated targeting approach

several market segments to target, each being attractive to marketing organisation

concentrated/niche marketing strategy

only a few market segments, used by small firms

customising market strategy

developed for each customer rather than each segment, used by b2b or high value consumer markets

micro targeting

identifies clusters of consumers with similar personal details that are constantly evolving

positioning in STP

concerns overall perception of an offering relative to its competitors

perceptual mapping

understanding complexity associated with different attributes and brands are made easier by visual representation of each market

4 ways to reposition

• change tangible attributes then communicate new proposition to same market

• change how proposition is communicated to original market

• change target market and deliver same proposition

• change proposition and target market