Target Marketing & Positioning MKT 846 Professor West

Agenda Finish Team Updates Discuss Targeting & Positioning Next time Tim Londergan from WBNS will join us

Segmentation & Targeting Trying to reach “everyone” with a marketing message costs money and sends unwanted messages to people who aren’t customers or prospects. It makes more sense to narrow the audience to people who are most likely to buy the brand. Segmenting is used to identify these groups of people. Targeting is the planning strategy for reaching and communicating with them.

Steps in Segmentation & Targeting: Identify your most profitable current customers Create profiles of these segments Target these segments to increase retention and customer growth Use profitable-customer profiles to locate prospective segments Evaluate prospective segments Target prospective segments that are likely to respond favorably Continue testing responsiveness of prospective segments

Step 1: How to determine LVC Lifetime Value of the Customer Volume (spending) Voice Cost of servicing Potential for growth RFM Model: Three critical variables: Recency, Frequency, Monetary Value

The Customer Pyramid Most Profitable Least Profitable PlatinumGoldIronLead

Step 2: Profiling Segments There are many bases for segmentation Behavior/Benefit Demographic/Geodemographics Psychographics & Lifestyle Relationship level Adopters The objective is to create a useful description of segment that describes: Who are they? How can they most effectively be reached? Why do they buy their brands of choice? How will they respond to our message?

Claritas – Prizm Segmentation Segment Descriptions

VALS Psychographic segmentation

Goal of Profiling

Selecting a Target Market Measurable – Can we identify and quantify the segment? Accessible – Can we reach this segment efficiently and effectively? Substantial – Is there enough critical mass to be profitable? Differential – Is this segment distinct from others? Actionable – Can we serve this segment? Do we have the capacity and budget?

Moving on to Positioning “This is the art and science of fitting the product or service to one or more segments in such a way to set is apart from competition” “Positioning is how your product is perceived on the hearts and minds of consumers” Many advertising practitioners consider this to be the most important factor in establishing the brand in the marketplace.

Positioning, the battle for your mind… Trout & Ries suggest asking yourself the following questions: What position, if any, do you already have in the prospect’s mind? (this most come from consumers not managers) What position do we want to own? What companies must be outgunned if we are to establish that position? Do we have enough resources to occupy and hold the position? Do we have enough guts to stick with one consistent positioning strategy? Does our creative approach match our positioning strategy?

Positioning Strategies Product attributes & benefits Price/Quality Use or Application Product Class Product User Competitor Cultural Symbol

Next Time… Read Chapters Prepare questions for Tim Londergan regarding targeting and media selection Begin the process of developing a positioning strategy for your brand and communication objectives