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Dr. Stephanie J. Morgan Lecture 3: Segmentation, targeting and positioning. Marketing Principles and Practice The full series will be available for download at:  www.bizface.co.uk
Objectives of Lecture 3 Segmentation ,[object Object],[object Object],[object Object],[object Object]
Defining segmentation ,[object Object],[object Object]
2 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill The advantages of market segmentation Understand The customer! Opportunities and threats Target market selection Market segmentation Tailored marketing mix Differentiation
Is segmentation always applicable? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
3 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill The process of market segmentation and target marketing The disaggregated market The segmented market The target market The characteristics of individual customers are understood Customers are grouped into segments on the basis of having similar characteristics Segment 3 is judged to be most attractive and a marketing mix strategy is designed for that target market 1 2 3 1 2 3 Marketing mix targeted at segment 3 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8
4 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Segmenting consumer markets Consumer segmentation Behavioural Benefits sought Purchase occasion Purchase  behaviour Usage Perceptions and beliefs Lifestyle Personality Demographic Socio-economic Geographic Psychographic Profile
Benefit Segmentation Causal not Descriptive factors Identify each Segment by benefits sought Total  Configuration Of benefits differentiates Continue segmentation within Has practical marketing implications, provides fresh insight Into markets, requires extensive research or insight
Other Behavioural bases ,[object Object],[object Object],[object Object],[object Object],[object Object]
Psychographic Lifestyle Young sophisticates, Traditional working class etc. Personality Extroverts, Introverts… More likely to be useful when brand choice is a reflection of self expression – symbolic, linked to identity
13 D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Life cycle stages At home single Young couple no children Young parents Middle-aged parents Empty nester married working Empty nester married retired Solitary retired Young divorced no children On own young Young divorced with children M-aged divorced no dep’nt children M-aged divorced with children Middle-aged married no children Middle-aged divorced no children On own middle-aged
6 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Macro and micro segmentation of organizational markets Macrosegment 2 (medium-sized companies) Macrosegment 2 (prime choice criterion: convenience) Macrosegment 3 (small companies) Macrosegment 3 (prime choice criterion: price) Macrosegment 1 (large companies) Macrosegment 1 (prime choice criterion: reliability) Organizational market
7 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Segmenting organizational markets Organizational size Industry Geographic location Macrosegmentation Organizational segmentation Microsegmentation Decision-making process Buy class Purchasing organization Organizational innovativeness Decision-making unit structure Choice
Alternative bases for segmenting Demographic: Industry, size, location Operating Variables: Technology, user status (heavy, light etc.,) customer capabilities Purchasing Approaches: Highly centralized/de-cent; Power structure (Eng/finance) Quality/service/price? Situational Factors: Need quick/sudden delivery Specific applications? Large/small orders? Personal Characteristics: Buyer-seller similarity? Risk Attitudes? Loyalty?
Evaluating Segments Market Attractiveness Market Factors: Growth, size, price sensitivity, barriers Competitive Factors : Type of competition, New entrants, differentiation Political, Social and  Environmental Factors : Issues, Social Trends, public Concerns. Organizational Capability: Exploitable assets, Cost advantages, Technological edge, Managerial capabilities Balance
8 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Target marketing strategies ,[object Object],[object Object],[object Object],[object Object]
Undifferentiated Strategy Example Post Office? ,[object Object],[object Object],[object Object],[object Object],Everybody ORGANISATION MARKETING MIX TARGET MARKET 10 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Utilitarian  Customer   Trendy- Casual Price  shopper Mainstream Tradition- alist LEVI’s Marketing Mix 1 Marketing Mix 2 Marketing  Mix 3 Marketing Mix 4 Marketing  Mix 5 Example of Differentiated Strategy 12 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Example of Focused Strategy ,[object Object],[object Object],[object Object],[object Object],Cement Manufacturer Builders Merchants Independent DIY Shops National DIY Chains Unserved Unserved ORGANISATION MARKETING MIX 14 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Example of Customized Strategy Marketing Mix 1 Marketing Mix 2 Marketing Mix 3 Marketing Mix 4 Nissan Birdseye Heinz Levis Industrial Electronic Systems  Supplier INDIVIDUAL MIXES ORGANISATION INDIVIDUAL CUSTOMERS 16 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
17 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Key tasks in positioning Where  and  how  we compete 1. Market segmentation 2. Target market 3. Differentiated advantage Positioning
18 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Keys to successful positioning Successful positioning Clarity Consistency Credibility Competitiveness
20 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill A perceptual map of supermarkets High price Low price Narrow product range Wide product range A B C D X G E F
21 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Repositioning strategies Image repositioning Product repositioning Intangible repositioning Tangible repositioning Same Different Same Different Target market Product
Issues in Positioning and Repositioning ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Services and Public Sector ,[object Object],[object Object],[object Object]
Additional considerations? Ethics – social responsibility Unfair advantage of vulnerable or disadvantaged groups Segment interrelationships Segment by segment invasion plans Inter-segment co-operation
Objectives ,[object Object],[object Object],[object Object],[object Object]
Workshop on Segmentation ,[object Object],[object Object],[object Object],[object Object]
Workshop aims and objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Workshop segmentation ,[object Object],Identification of a target market Tailoring of marketing mix Develop differential marketing strategies between segments Creation of differential advantage
Disadvantages of targeting and segmentation? ,[object Object],[object Object],[object Object]
Car Industry Possible Examples ? ? Other? Morgan High Individualists Distinctiveness Catalytic Converters Environmental Compactness, good for Env. Mondeo Large family Space Sports cars Young males Performance BMW High income Status Punto Thrifty Economy Example Profile Benefits
Ethical Considerations  ,[object Object],[object Object],[object Object],This Presentation is at:   www.bizface.co.uk   for download

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Segmenting the market and finding your niche

  • 1. Dr. Stephanie J. Morgan Lecture 3: Segmentation, targeting and positioning. Marketing Principles and Practice The full series will be available for download at: www.bizface.co.uk
  • 2.
  • 3.
  • 4. 2 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill The advantages of market segmentation Understand The customer! Opportunities and threats Target market selection Market segmentation Tailored marketing mix Differentiation
  • 5.
  • 6. 3 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill The process of market segmentation and target marketing The disaggregated market The segmented market The target market The characteristics of individual customers are understood Customers are grouped into segments on the basis of having similar characteristics Segment 3 is judged to be most attractive and a marketing mix strategy is designed for that target market 1 2 3 1 2 3 Marketing mix targeted at segment 3 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8 c 1 c 5 c 7 c 2 c 6 c 3 c 4 c 8
  • 7. 4 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Segmenting consumer markets Consumer segmentation Behavioural Benefits sought Purchase occasion Purchase behaviour Usage Perceptions and beliefs Lifestyle Personality Demographic Socio-economic Geographic Psychographic Profile
  • 8. Benefit Segmentation Causal not Descriptive factors Identify each Segment by benefits sought Total Configuration Of benefits differentiates Continue segmentation within Has practical marketing implications, provides fresh insight Into markets, requires extensive research or insight
  • 9.
  • 10. Psychographic Lifestyle Young sophisticates, Traditional working class etc. Personality Extroverts, Introverts… More likely to be useful when brand choice is a reflection of self expression – symbolic, linked to identity
  • 11. 13 D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Life cycle stages At home single Young couple no children Young parents Middle-aged parents Empty nester married working Empty nester married retired Solitary retired Young divorced no children On own young Young divorced with children M-aged divorced no dep’nt children M-aged divorced with children Middle-aged married no children Middle-aged divorced no children On own middle-aged
  • 12. 6 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Macro and micro segmentation of organizational markets Macrosegment 2 (medium-sized companies) Macrosegment 2 (prime choice criterion: convenience) Macrosegment 3 (small companies) Macrosegment 3 (prime choice criterion: price) Macrosegment 1 (large companies) Macrosegment 1 (prime choice criterion: reliability) Organizational market
  • 13. 7 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Segmenting organizational markets Organizational size Industry Geographic location Macrosegmentation Organizational segmentation Microsegmentation Decision-making process Buy class Purchasing organization Organizational innovativeness Decision-making unit structure Choice
  • 14. Alternative bases for segmenting Demographic: Industry, size, location Operating Variables: Technology, user status (heavy, light etc.,) customer capabilities Purchasing Approaches: Highly centralized/de-cent; Power structure (Eng/finance) Quality/service/price? Situational Factors: Need quick/sudden delivery Specific applications? Large/small orders? Personal Characteristics: Buyer-seller similarity? Risk Attitudes? Loyalty?
  • 15. Evaluating Segments Market Attractiveness Market Factors: Growth, size, price sensitivity, barriers Competitive Factors : Type of competition, New entrants, differentiation Political, Social and Environmental Factors : Issues, Social Trends, public Concerns. Organizational Capability: Exploitable assets, Cost advantages, Technological edge, Managerial capabilities Balance
  • 16.
  • 17.
  • 18. Utilitarian Customer Trendy- Casual Price shopper Mainstream Tradition- alist LEVI’s Marketing Mix 1 Marketing Mix 2 Marketing Mix 3 Marketing Mix 4 Marketing Mix 5 Example of Differentiated Strategy 12 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
  • 19.
  • 20. Example of Customized Strategy Marketing Mix 1 Marketing Mix 2 Marketing Mix 3 Marketing Mix 4 Nissan Birdseye Heinz Levis Industrial Electronic Systems Supplier INDIVIDUAL MIXES ORGANISATION INDIVIDUAL CUSTOMERS 16 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
  • 21. 17 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Key tasks in positioning Where and how we compete 1. Market segmentation 2. Target market 3. Differentiated advantage Positioning
  • 22. 18 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Keys to successful positioning Successful positioning Clarity Consistency Credibility Competitiveness
  • 23. 20 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill A perceptual map of supermarkets High price Low price Narrow product range Wide product range A B C D X G E F
  • 24. 21 D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Repositioning strategies Image repositioning Product repositioning Intangible repositioning Tangible repositioning Same Different Same Different Target market Product
  • 25.
  • 26.
  • 27. Additional considerations? Ethics – social responsibility Unfair advantage of vulnerable or disadvantaged groups Segment interrelationships Segment by segment invasion plans Inter-segment co-operation
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33. Car Industry Possible Examples ? ? Other? Morgan High Individualists Distinctiveness Catalytic Converters Environmental Compactness, good for Env. Mondeo Large family Space Sports cars Young males Performance BMW High income Status Punto Thrifty Economy Example Profile Benefits
  • 34.

Notas del editor

  1. Introduce me as final year PhD on organizational attachment in IT outsourcing. Explain background in IT and managing people remotely. Masters and doctoral research at Birkbeck revealing interesting issues about intranets and e-mail usage. (Possibly explain a little about organizational focus as I see all other talks are to do with shopping type stuff). Could get attention by asking how many of them class themselves as remote workers or work from home sometimes? Aim of the talk today is to highlight the problems (still) faced by managers and staff in these days of increased reliance on electronic communication, and suggest that information overload is not just a ‘stress/overwork’ issue but can lead to increased isolation for remote workers.