MARKETING MANAGEMENT 13th 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.

Ford’s Model T Followed a Mass Market Approach

Steps in Market Segmentation, Targeting, and Positioning 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

Four levels of Micromarketing Segments Niches Local areas Individuals

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

Basic Market Preference Patterns

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.

Examples of Market Customization

Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral

Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

Psychographic Segmentation: The VALS Segmentation System

Behavioral Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Behavioral Segmentation Breakdown

Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics

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

Effective Segmentation Criteria Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments.

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.

Market Targeting Market Coverage Strategies Company Marketing Mix Market Company Marketing Mix 1 Segment 1 Company Marketing Mix 2 Segment 2 A. Undifferentiated Marketing Company Marketing Mix 3 Segment 3 Segment 1 Company Marketing Mix Segment 2 B. Differentiated Marketing Segment 3 C. Concentrated Marketing

Patterns of Target Market Selection

Patterns of Target Market Selection

Patterns of Target Market Selection

MARKETING MANAGEMENT 13th edition 10 Crafting the Brand Positioning Kotler Keller

Marketing Strategy Segmentation Targeting Positioning

Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.

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

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

Consumer Desirability Criteria for PODs Relevance Distinctiveness Believability

Deliverability Criteria for PODs Feasibility Communicability Sustainability

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

Developing and Communicating a Positioning Strategy Positioning: How many ideas to promote? Unique selling proposition Four major positioning errors Underpositioning Overpositioning Confused positioning Doubtful positioning

Differentiation Strategies Product Personnel Channel Image

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

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