Segmentation and Positioning Principles Buku : MARKETING STRATEGY AND COMPETITIVE POSITIONING Bab 10

Key issues Competition positioning Market segmentation Customer needs

Competitive positioning and market segmentation How customers perceive alternative How marketers identify groups of customers Competitive positioning Market segmentation Customer needs Market offerings Market

Positioning and segmentation Market segmentation Choice of target markets Competitive positioning Iteration

Stages in segmentation and positioning

Principles of competitive positioning Positioning is the act of designing the company’s offering and image so that they occupy a meaningful and distinct competitive position in the target customers’ minds (Kotler, 1997)

Principles of competitive positioning The essential principle of competitive positioning is that it is concerned with how customers in different parts of the market perceive the competing companies, products / services or brands. It is important to bear in mind that positioning may apply to any of these levels: Companies Products and services Brands

Criteria to create differentiation Importance Distinctive and pre-emptive Superior Communicable Affordable Profitable

The four pillars of company’s distinctive value proposition : D i r e c t Hassle free Peace of mind C o u r t e s y

Kesalahan Utama Positioning Under-positioning Over-positioning Confused positioning Doubtful positioning Kesalahan Utama Positioning

Positioning risk and errors Uniqueness claimed Credibility Narrow Broad Believable Over-positioning Too exclusive or narrow Under-positioning Nothing special Less believable Doubtful positioning Improbable claims Confused positioning Unclear what the position is

The underlying premises of market segmentation – three basic propositions Differ from one another Identified by measurable characteristics Isolate

Major issues in market segmentation The methodology of market segmentation The criteria for testing segments as robust market targets The strategic segmentation decision itself The implementation of segmentation strategy in the company

Segmenting consumer markets Background customer characteristics Customer attitudes Customer behaviour Objective measures Subjective measures Non-marketing specific Demographics Sex, age, geography, subculture, etc. Socio economics Occupation, income, education Psychographics Personality inventories Marketing specific Consumer life cycle ACORN media usage lifestyle

The Warner index of status characteristics Class name Description Consumption characteristics Upper-upper Elite social class with inherited social position Expensive, irrelevant, but purchase decision not meant to impress; conservative Lower-upper Nouveau riche; highly successful business and professional; position acquired through wealth Conspicuous consumption to demonstrate wealth, luxury cars, large estates, etc. Upper-middle Successful business and professional Purchases directed at projecting successful image Lower-middle White-collar workers, small businesspeople Concerned with social approval; purchase decisions; conservative; home and family oriented Upper-lower Blue-collar workers, technicians, skilled workers Satisfaction of family roles Lower-lower Unskilled labour, poorly educated poorly off Attraction to cheap, ‘flashy’, low-quality items; heavy exposure to TV

Stages of the family life cycle Financial Circumstances And Purchasing Characteristics Bachelor Few financial burdens, recreation oriented; holidays; entertainment outside home Young, single, not living at parental home Newly wed Better off financially, two incomes; purchase home, some consumer durables Young couples, no children Full nest 1 Home purchasing peak; increasing financial pressures, may have only one income earner; purchase of household ‘necessities’ Youngest child under 6 Full nest II Financial position improving; some working spouses Youngest child over 6 Full nest III Financial position better still; update household products and furnishings Older married couples with dependent children Empty nest I Home ownership peak; renewed interest in travel and leisure activity; buy luxuries Older married couples, no children at home Empty nest II Drastic cut in income; medical services bought Older couples, no children at home, retired Solitary survivor Income good, but likely to sell home Still in labour force Special needs for medical care, affection and security Retired

Customer attitudinal characteristics for segmentating markets Benefit segmentation Perceptions and preferences Summary of attitudinal bases of segmentation

Customer behavioural characteristics for segmenting markets Purchase behaviour Innovators Brand loyalty Consumtion behaviour Communication behaviour Response to element of the marketing mix Relationship – seeking characteristic * Summary of behavioural bases for segmentation

Relationship – seeking characteristic * Variables Segments Relationship seekers Deal-makers Relationship exploiters Price-seekers Loyal buyers Brand loyalists Arm’s – length transaction customers Luxury innovator

Segmenting business markets Background company characteristics Industry type Company size Customer location Company technology Customer capabilities Purchasing organisation Power structures Purchasing policies Product application Attitudinal characteristics Behavioural characteristics Buyer-seller similarity Buyer motivation Buyer risk perceptions Summary of bases for segmenting business markets

The benefits of segmenting markets Identifying and describing market segments First order and second order segmentation The benefits of segmenting markets Segmentation is a particularly useful approach to marketing for the smaller company It helps to identify gaps in market In mature or declining markets it may be possible to identify specific segments that are still in growth Segmentation enables the marketer to match the product or service more closely to the needs of the target market The dangers of not segmenting the market when competitors do should also be emphasised

IMPLEMENTING MARKET SEGMENTATION The scope and purpose of market segmentation Strategic intent, vision and mission Marketing planning, budgeting and resource allocation Operational sales, marketing and distribution management Levels of segmentation

IMPLEMENTING MARKET SEGMENTATION 2. Strategic, managerial and operational levels of segmentation Strategic segmentation Managerial segmentation Operational segmentation

IMPLEMENTING MARKET SEGMENTATION 3. Sources of implementation problems Organisation structure Internal politics Corporate culture Information and reporting Decision-making processes Corporate capabilities Operational systems

MARKET SEGMENT ATTRACTIVENESS AND ORGANISATIONAL RESOURCE STRENGTH High Low Best prospects Attractive segments that fit well with organisational resources Build strength first Attractive markets but with poor fit with organisational resources Poor prospects Unattractive segments that fit well with organisational resources Worst prospects Unattractive segments with a poor fit with organisational resources

Novellis - 29 April 2010