MARKETING MANAGEMENT

14th edition

8 Identifying Market Segments and Targets

Kotler

Keller

Effective Targeting Requires

Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. Establish and communicate the distinctive benefits of the market offering.

CHP: 8&10-2

Fords Model T Followed a Mass Market Approach

CHP: 8&10-3

Steps in Market Segmentation, Targeting, and Positioning

1. Identify bases for segmenting the market 2. Develop segment profiles

Market Segmentation

Market Targeting

3. Develop measure of segment attractiveness 4. Select target segments 5. Develop positioning for target segments 6. Develop a marketing mix for each segment CHP: 8&10-4

Market positioning

Four levels of Micromarketing

Segments

Niches

Local areas

Individuals

CHP: 8&10-5

Segment Marketing

Targeting a group of customers who share a similar set of needs and wants.

CHP: 8&10-6

Basic Market Preference Patterns

CHP: 8&10-7

Customerization

Combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.

CHP: 8&10-8

Examples of Market Customization

CHP: 8&10-9

Segmenting Consumer Markets

Geographic Demographic Psychographic

Behavioral

CHP: 8&10-10

Demographic Segmentation
Age and Life Cycle
Life Stage Gender Income Generation Social Class
CHP: 8&10-11

Psychographic Segmentation: The VALS Segmentation System

CHP: 8&10-12

Behavioral Segmentation
Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude
CHP: 8&10-13

Behavioral Segmentation Breakdown

CHP: 8&10-14

Segmenting for Business Markets

Demographic Operating Variable

Purchasing Approaches
Situational Factors Personal Characteristics
CHP: 8&10-15

Segmenting for Business Markets

Demographic segmentation Industry, company size, location Operating variables Technology, usage status, customer capabilities Purchasing approaches Situational factors Urgency, specific application, size of order Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty

CHP: 8&10-16

Effective Segmentation Criteria

Measurable Accessible Substantial Differential Actionable
Size, purchasing power, profiles

of segments can be measured.

Segments can be effectively

reached and served.

Segments are large or

profitable enough to serve.

Segments must respond

differently to different marketing mix elements & programs.

Effective programs can be

designed to attract and serve the segments.

CHP: 8&10-17

Market Targeting
Evaluating Market Segments
Segment Size and Growth Analyze current sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers. Company Objectives and Resources Company skills & resources needed to succeed in that segment(s). Look for Competitive Advantages. CHP: 8&10-18

Market Targeting
Market Coverage Strategies
Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3
A. Undifferentiated Marketing

Market

Segment 1 Segment 2 Segment 3

B. Differentiated Marketing

Company Marketing Mix

C. Concentrated Marketing

Segment 1 Segment 2 Segment 3

CHP: 8&10-19

Patterns of Target Market Selection

CHP: 8&10-20

Patterns of Target Market Selection

CHP: 8&10-21

Patterns of Target Market Selection

CHP: 8&10-22

MARKETING MANAGEMENT
14th edition

10 Crafting the Brand Positioning

Kotler

Keller

Marketing Strategy
Segmentation

Targeting

Positioning

CHP: 8&10-24

Positioning

Act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.

Positioning provides synergy among 4Ps.

CHP: 8&10-25

Choosing a Positioning Strategy

Step 1. Identifying Possible Competitive Advantages Step 2. Selecting the Right Competitive Advantage
Step 3. Communicating and Delivering the Chosen Position
CHP: 8&10-26

Defining Associations
Points-of-parity Points-of-difference (PODs) (POPs) Attributes or benefits Associations that are consumers strongly not necessarily unique associate with a brand, to the brand but may positively evaluate, and be shared with other believe they could not brands find to the same extent with a competitive brand
CHP: 8&10-27

Consumer Desirability Criteria for PODs

Relevance

Distinctiveness

Believability

CHP: 8&10-28

Deliverability Criteria for PODs

Feasibility

Communicability

Sustainability

CHP: 8&10-29

Examples of Negatively Correlated Attributes and Benefits

Low-price vs. High quality Taste vs. Low calories Nutritious vs. Good tasting Efficacious vs. Mild Powerful vs. Safe Strong vs. Refined Ubiquitous vs. Exclusive Varied vs. Simple

CHP: 8&10-30

Developing and Communicating a Positioning Strategy

Positioning: How many ideas to promote?
Unique selling proposition

Four major positioning errors

1. 2. 3. 4. Underpositioning Overpositioning Confused positioning Doubtful positioning
CHP: 8&10-31

USP
Who are the customers? What is the set of needs that the product fulfills? Why is the product the best option to satisfy those needs?

CHP: 8&10-32

Positioning Statement

Our (1)product/brand is
(2)single most important claim

among all (3)competitive frame because (4)single most important support.

Our (1)KKY yogurt is (2)the healthiest among all (3)KKY because of (4)our unique hygenic technology.
CHP: 8&10-33

Differentiation Strategies

Product

Personnel

Channel

Image

CHP: 8&10-34

Product Differentiation
Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance

CHP: 8&10-35

Identity and Image

Identity: The way a company aims to identify or position itself

Image: The way the public perceives the company or its products

CHP: 8&10-36