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MGT301 Principles of Marketing Lecture-18
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Summary of Lecture-17
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Market Segmentation Segmentation
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Major Steps in Target Marketing Segmentation Segmentation Target Marketing Target Marketing Market Positioning Market Positioning
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Segmentation Variables Geographical segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation
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Today’s Topics Market Segmentation (cont..)
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How Segments are Developed?
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Segmentation plans developed through a 3-stage process –survey –analysis –interpretation
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Bases for Segmenting Business Markets
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Demographics Operating Variables Purchasing Approaches Situational Factors Personal Characteristics Business Marketers Use Many of the Same Consumer Variables, Plus:
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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
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Bases for Segmenting International Markets
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Factors Used to Segment International Markets Geographic Location Economic Factors Political and Legal Factors Cultural Factors
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Geographic segmentation –Location or region Economic factors –Population income or level of economic development Political and legal factors –Type / stability of government, monetary regulations, amount of bureaucracy, etc. Cultural factors –Language, religion, values, attitudes, customs, behavioral patterns
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Intermarket Segmentation Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
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Requirements for Effective Segmentation
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Size, purchasing power, profiles of segments can be measured. Segments must be effectively reached and served. Segments must be effectively reached and served. Segments must be large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.
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Target Marketing
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Steps in the Target Marketing Process Evaluating Market SegmentsEvaluating Market Segments Selecting Target Market SegmentsSelecting Target Market Segments
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Evaluating Market Segments
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Segment Size and Growth –Analyze sales, growth rates and expected profitability. Segment Structural Attractiveness –Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. Company Objectives and Resources –Company skills & resources relative to the segment (s). –Look for Competitive Advantages.
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Choosing a Market-Coverage/Target- Marketing Strategy
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Target Marketing Strategies
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Company Marketing Mix Company Marketing Mix Market A. Undifferentiated Marketing Market Coverage Strategies
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Segment 1 Segment 2 Segment 3 Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 B. Differentiated Marketing
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Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix C. Concentrated Marketing
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Company Marketing Mix Company Marketing Mix Individual Customer Individual Customer D. Custom Marketing Strategy or Micromarketing Strategy
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Positioning for Competitive Advantage Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”. Marketers must: –Plan positions to give products the greatest advantage –Develop marketing mixes to create planned positions
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Choosing and Implementing a Positioning Strategy Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation. Step 2. Selecting the right competitive advantage. Step 3. Effectively communicating and delivering the chosen position to the market.
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Positioning Strategy Development Process Identify the competitors. Assess perceptions of them. Determine their positions. Analyze consumer preferences. Make the positioning decision.
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Product Service Personnel Image Areas for Competitive Differentiation Areas for Competitive Differentiation
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Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services Product Differentiation i.e. Features, Performance, Style & Design, or Attributes Image Differentiation i.e. Symbols, Atmospheres, Events Personnel Differentiation i.e. Hiring, Training Better People Than Competitors Do Identifying Possible Competitive Advantages
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Six Positioning Questions What position do we have now? What position do we want to own? From whom must we win this position? Do we have the money to do the job? Do we have the tenacity to stay with it? Does our creative strategy match it?
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Positioning By What? Product Attributes Price/Quality Use or Application Product Class Product User Competitor Cultural Symbols
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A Strategic Resource Must Be: è Hard to copy è Durable è Tied to the company è Not substitutable è Superior
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Summary Market Segmentation (cont..) Bases for Segmenting Business Markets Bases for Segmenting International Markets Requirements for Effective Segmentation
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Size, purchasing power, profiles of segments can be measured. Segments must be effectively reached and served. Segments must be large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.
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Target Marketing
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Positioning for Competitive Advantage
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Next…. Marketing Mix 4 Ps
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MGT301 Principles of Marketing Lecture-18
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