Marketing 7 Segmentation & Targeting

7.1 Segmentation and Targeting - 7 Bases for segmentation Requirements for effective segmentation Segmentation and targeting strategies Positioning for a competitive advantage One to one marketing

7.2 Market Segmentation Market Market Segment Segmentation

7.3 Why Segmentation? Opportunities for building and strengthening long- term relationships with key customers. Improved marketing efficiency and effectiveness. Better understanding of the competitive marketing environment. Faster response to the changing needs of customers..

7.4 Criteria for Successful Segmentation Segments must be: –Substantial –Identifiable and Measurable –Accessible –Responsive

7.5 Segmenting the Consumer Market GeographicDemographic

7.6 Segmenting the Consumer Market Psychographics Benefits sought Usage rate

7.7 Segmenting the B2B Market Company Characteristics Buying Process Customer Relationship

7.8 Segmentation Select market/product Select basis or bases for segmenting Select segment descriptors Profile and analyze segments Select target market Design & implement appropriate strategies

7.9 EXERCISE Proctor and Gamble decided to a air a Spanish language TV spot for Crest Whitening Plus Scope during the Grammy awards. Nike and Pepsi have experimented with Spanish TV ads. Marketers say the Hispanic market is growing and has unique needs. 1) Is this a good market to target? Why? 2) Select a product that would be good to target at this segment. Describe why and design an ad to motivate the consumer to buy. Where would the ad be placed and why.

7.10 Market Coverage Strategies Undifferentiated marketing Concentrated marketing Multi-segment targeting

A Mix 2 (C) Mix 3 (E) B C D E Mix 1 (A-E) Mix 2 (E) Undifferentiated Concentrated Differentiated Segmentation Strategies

7.13 One-to-One Marketing Definition – an individualized marketing approach that uses consumer information to build long-term, personalized and profitable relationship with individual consumers Refined and focused approach –Identifying the best customers –Retaining loyal customers –Targeting marketing communications –Reinforcing purchase decisions –Improving customer service

7.14 Evolution of One-to-One Marketing Return to the approach used before the Industrial Revolution Increasing diversity Today consumers demand more Technology makes it possible Decreasing brand loyalty Demand for accountability

7.15 Evolution of One-to-One Marketing Aggregate profiles of consumers are not sufficient anymore Use customer information to develop compelling communications Still a goal not a reality for most companies Winners will be those who understand how and why consumers buy what they do

7.16 Primary Concerns With One-to- One Marketing 1-1 means knowing what consumers value Consumers value privacy, relationship must be built on trust Little understanding on how companies use data Little regulation

7.11 Product Positioning A process designed to fit the product/service to a target market in such a way as to set it apart from competition. –keeps employees focused on the total value package –customers use this position as a kind of shorthand to perceptually map products

7.12 Positioning Bases Attribute Price / Quality Use or application UserCompetitionEmotion

Attribute X High Attribute X Low Attribute Y High Attribute Y Low A B C D E F

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