C HOOSING V ALUE MBA 649 : Marketing Management M Wahidul Islam Fall 2014 LECTURE 6

PART 1 SEGMENTATION

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-3 B ABY B OOMERS : A L UCRATIVE M ARKET

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-4 E FFECTIVE T ARGETING R EQUIRES … 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

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-5 F ORD ’ S M ODEL T F OLLOWED A M ASS M ARKET A PPROACH

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-6 F OUR LEVELS OF M ICROMARKETING Segments Local areasIndividuals Niches

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-7 W HAT IS A M ARKET S EGMENT ? A market segment consists of a group of customers who share a similar set of needs ad wants.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-8 P REFERENCE S EGMENTS Homogeneous preferences exist when consumers want the same things Diffused preferences exist when consumers want very different things Clustered preferences reveal natural segments from groups with shared preferences

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-9 N ICHE M ARKETERS Enterprise Rent-A-Car targets the insurance- replacement market

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-10 B ASKIN R OBBINS F OCUSES ON L OCAL M ARKETING

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-11 W HAT IS C USTOMERIZATION ? 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.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-12 S EGMENTING C ONSUMER M ARKETS Geographic Demographic Psychographic Behavioral

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-13 D EMOGRAPHIC S EGMENTATION Age and Life Cycle Life Stage Gender Income Generation Social Class

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-14 T OYOTA S CION T ARGETS G EN Y C ONSUMERS

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-15 D OVE T ARGETS W OMEN

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-16 B EHAVIORAL S EGMENTATION Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-17 T HE B RAND F UNNEL I LLUSTRATES V ARIATIONS IN THE B UYER -R EADINESS S TAGE Aware Ever tried Recent trial Occasional user Regular user Most often used

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-18 L OYALTY S TATUS Switchers Shifting loyals Split loyals Hard-core

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-19 F IGURE 8.3 B EHAVIORAL S EGMENTATION B REAKDOWN

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-20 T HE C ONVERSION M ODEL ConvertibleShallowAverageEntrenched Strongly unavailable AmbivalentAvailable Weakly unavailable Users Nonusers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-21 S EGMENTING FOR B USINESS M ARKETS Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics Personal Characteristics

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-22 S TEPS IN S EGMENTATION P ROCESS Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Marketing-Mix Strategy

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-23 E FFECTIVE S EGMENTATION C RITERIA Measurable Substantial Accessible Differentiable Actionable

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-24 F IGURE 8.4 P ATTERNS OF T ARGET M ARKET S ELECTION

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-25 F IGURE 8.4 P ATTERNS OF T ARGET M ARKET S ELECTION

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-26 F IGURE 8.4 P ATTERNS OF T ARGET M ARKET S ELECTION

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-27 C REST W HITESTRIPS F OLLOWS A M ULTISEGMENT S TRATEGY

R EFERENCES Chapter – 4 Creating Customer Value, Satisfaction, and Loyalty Kotler, Philip, Keller, Kevin L., Koshy, Abraham and Jha, Mithileshwar ( ) Marketing Management: A South Asian Perspective (14 th Edition) Pearson Education Inc

PART 2 Dealing with Competition

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall F IGURE 1.1 F IVE F ORCES D ETERMINING S EGMENT S TRUCTURAL A TTRACTIVENESS

5-31 C OMPETITOR A NALYSIS What is a Competitor Analysis? A competitor analysis is a detailed analysis of a firm’s competition. It helps a firm understand the positions of its major competitors and the opportunities that are available. A competitive analysis grid is a tool for organizing the information a firm collects about its competitors.

5-32 I DENTIFYING C OMPETITORS Types of Competitors New Ventures Face

5-33 S OURCES OF C OMPETITIVE I NTELLIGENCE 1 OF 3 Collecting Competitive Intelligence To complete a competitive analysis grid, a firm must first understand the strategies and behaviors of its competitors. The information that is gathered by a firm to learn about its competitors is referred to as competitive intelligence. A new venture should take care that it collects competitive intelligence in a professional and ethical manner.

5-34 S OURCES OF C OMPETITIVE I NTELLIGENCE 2 OF 3 Ethical ways to obtain information about competitors Attend conferences and trade shows. Purchase competitor’s products. Study competitors’ Web sites. Set up Google and Yahoo! alerts. Read industry-related books, magazines, and Web sites. Talk to customers about what motivated them to buy your product as opposed to your competitor’s product.

5-35 S OURCES OF C OMPETITIVE I NTELLIGENCE 3 OF 3 Many companies attend trade shows to not only display their products, but to see what their competitors are up to. This is a photo of the the 2008 Consumer Electronics Trade Show in Las Vegas.

5-36 C OMPLETING A C OMPETITIVE A NALYSIS G RID Competitive Analysis Grid A tool for organizing the information a firm collects about its competitors A competitive analysis grid can help a firm see how it stakes up against its competitors, provide ideas for markets to pursue, and identify its primary sources of competitive advantage.

5-37 C OMPETITIVE A A NALYSIS G RID FOR E XPRESSO F ITNESS

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall F IGURE 11.6 S IX T YPES OF D EFENSE S TRATEGIES

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall F IGURE 11.7 O PTIMAL M ARKET S HARE

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall O THER C OMPETITIVE S TRATEGIES Market Challengers Market Nichers Market Followers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall M ARKET C HALLENGER S TRATEGIES Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall M ARKET F OLLOWER S TRATEGIES Counterfeiter Cloner Imitator Adapter

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall N ICHE S PECIALIST R OLES End-User Specialist Vertical-Level Specialist Customer-Size Specialist Specific-Customer Specialist Geographic Specialist Product-Line Specialist Job-Shop Specialist Quality-Price Specialist Service-Specialist Channel Specialist

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall B ALANCING O RIENTATIONS Competitor- Centered Customer- Centered

R EFERENCES Chapter – 4 Creating Customer Value, Satisfaction, and Loyalty Kotler, Philip, Keller, Kevin L., Koshy, Abraham and Jha, Mithileshwar ( ) Marketing Management: A South Asian Perspective (14 th Edition) Pearson Education Inc