MG 506 (Fall 1999): Class /12/99 Tuesday, October 12, 1999 n Segmentation n Targeting n Positioning n Web Site: Boeing n Case: Logitech

MG 506 (Fall 1999): Class /12/99 Segmentation n Division of the market into distinct groups of buyers ==> Goal: Unique marketing mixes n Requirements: –Measurable –Sustainable –Accessible –Substantial –Differential response

MG 506 (Fall 1999): Class /12/99 Possible Bases of Segmentation n Geographic n Demograhic n Psychographic n Behavioral –Occasions –Benefits –Usage –Loyalty

MG 506 (Fall 1999): Class /12/99 High Resources Low Resources Principle Oriented Fulfilleds Believers Actualizers Strugglers Status Oriented Achievers Strivers Action Oriented Experiencers Makers VALS 2 Network

MG 506 (Fall 1999): Class /12/99 Targeting Segments n Market potential n Strategic factors –Strength of customers –Suppliers –Barriers to entry –Intensity of rivalry –Threat of substitution n Fit –Strengths/Weaknesses –Strategic consistency –Synergy

MG 506 (Fall 1999): Class /12/99 Positioning n Perception of the product by the customer vis-a-vis competition so that the product/service occupies a distinct and valued place in the customer’s mind. –Result of an integrated marketing plan.

MG 506 (Fall 1999): Class /12/99 Issues in Globalization n Cultural n Language n Demographic n Can we see segments first and countries later?

MG 506 (Fall 1999): Class /12/99 Ethical Issues n Vulnerable groups n Interests of society

MG 506 (Fall 1999): Class /12/99 Cluster Analysis n Identifying groups of similar customers with substantial intergroup differences n Key tasks: –Identifying appropriate variables –Selecting measures of similarity –Determining the number of factors –Profiling the resulting clusters

MG 506 (Fall 1999): Class /12/99 Doing Cluster Analysis Dimension 2 Dimension 1 Perceptions or ratings data from one respondent III a I II b a=distance from member to cluster center b=distance from I to III

MG 506 (Fall 1999): Class /12/99 Interpreting Cluster Analysis Results n No clear statistical answer n Are clusters spatially distinct? n Should clusters be joined or separated? n Are the results meaningful? Can they be interpreted?

MG 506 (Fall 1999): Class /12/99 Describing Market Segments n Identify a set of “observable” variables that helps you to understand how to reach and serve the needs of selected clusters. n Use discriminant analysis to identify underlying dimensions that maximally differentiate between the selected clusters.