1. MGT301 Principles of Marketing Lecture-18

2. Summary of Lecture-17

3. Market Segmentation Segmentation

4. Major Steps in Target Marketing Segmentation Segmentation Target Marketing Target Marketing Market Positioning Market Positioning

5. Segmentation Variables  Geographical segmentation  Demographic segmentation  Psychographic segmentation  Behavioral segmentation

6. Today’s Topics Market Segmentation (cont..)

7. How Segments are Developed?

8. Segmentation plans developed through a 3-stage process –survey –analysis –interpretation

9. Bases for Segmenting Business Markets

10. Demographics Operating Variables Purchasing Approaches Situational Factors Personal Characteristics Business Marketers Use Many of the Same Consumer Variables, Plus:

11. 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

12. Bases for Segmenting International Markets

13. Factors Used to Segment International Markets Geographic Location Economic Factors Political and Legal Factors Cultural Factors

14. 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

15. Intermarket Segmentation Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries

16. Requirements for Effective Segmentation

17. 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.

18. Target Marketing

19. Steps in the Target Marketing Process Evaluating Market SegmentsEvaluating Market Segments Selecting Target Market SegmentsSelecting Target Market Segments

20. Evaluating Market Segments

21. 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.

22. Choosing a Market-Coverage/Target- Marketing Strategy

23. Target Marketing Strategies

24. Company Marketing Mix Company Marketing Mix Market A. Undifferentiated Marketing Market Coverage Strategies

25. 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

26. Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix C. Concentrated Marketing

27. Company Marketing Mix Company Marketing Mix Individual Customer Individual Customer D. Custom Marketing Strategy or Micromarketing Strategy

28. 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

29. 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.

30. Positioning Strategy Development Process  Identify the competitors.  Assess perceptions of them.  Determine their positions.  Analyze consumer preferences.  Make the positioning decision.

31. Product Service Personnel Image Areas for Competitive Differentiation Areas for Competitive Differentiation

32. 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

33. 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?

34. Positioning By What?  Product Attributes  Price/Quality  Use or Application  Product Class  Product User  Competitor  Cultural Symbols

35. A Strategic Resource Must Be: è Hard to copy è Durable è Tied to the company è Not substitutable è Superior

36. Summary Market Segmentation (cont..) Bases for Segmenting Business Markets Bases for Segmenting International Markets Requirements for Effective Segmentation

37. 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.

38. Target Marketing

39. Positioning for Competitive Advantage

40. Next…. Marketing Mix 4 Ps

41. MGT301 Principles of Marketing Lecture-18