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PrinciplesofMarketing.
CourseCode:304.002.301
MarketSegmentation,TargetMarkets&PositioningPeterNightscalesMEd,MBA.ThesepowerpointsarethepropertyofPeterNightscalesandaresubjecttoCopyright.(2014)Duplication,copyingofanyofthematerialinanyformcanonlybeundertakenwiththewrittenpermissionoftheauthor.PeterNightscalesMEd,MBA.PrinciplesofMarketing.
CourseCode:304.002.301
Whatisamarket?Anaggregate(combinedgroup)ofpeoplewho,asindividualsororganisations,haveneedsforproductsinaproductclassandwhohavetheability,willingnessandauthoritytopurchasesuchproducts.Consumer:Productsareintendedforhouseholduse.Theyincludeallofthedifferentthingsweuseandownasconsumers.Oftenhighvolumeandlowcost.Organisational/BusinessTheresale,directuseofproductusedinproduction/manufacturing/office.Oftenlowvolumeandhighcost.TypesofMarketsMobilePhoneMarketbeforeAppleCarMarketHousingMarketSegmentationMarketSegmentationProcessofdividingatotalmarketintomarketgroupsconsistingofpeoplewhohaverelativelysimilarproductneeds.ThereareclustersofneedsMarketsegmentationmeansdevelopingasetofreasonablyconsistentcriteriaandplacingpeopleororganisationsintotogroupswith‘potentially’similarneedandwants,behavioursorexperiences.Examples–toothpaste,software,cars,holidaysetc.MarketSegmentationThesegmentcanthenberepresentativeofthegreaterbodyofpeople.Thecriteriafordeterminingthesegmentcanbealmostanythingwechose.Howeverrememberthatifitistoolargeitwillbeincreasinglydifficulttomanageandifitistoosmall,thefindingsmaynotbeaccurateofthemass.MarketSegmentationSample:MarketSegmentationAustralianBottledWaterMarketThePCMarket1.Selectamarketorproductcategory
2.Chooseabasisforsegmentingtheprofile3.Selectsegmentationdescriptors4.Profilethesegment5.Selectthetargetmarket6.Design,implementandmaintaintheappropriatemarketingmixDevelopingaTargetMarketStrategyBasisforSegmentingConsumerMarketsThereisnosinglewaytosegmentamarketMarketingeffortsareorganisedaccordingtosegmentsdefinedbyspecificvariablesMajorvariables:Psychographic:socialclass,lifestyleorpersonalitycharacteristicsDemographic:age,gender,familysize&lifecycle,income,occupation,education,religionetcGeographic:nations,regions,states,municipalities,citiesorneighbourhoodsBehaviouristic:consumer’sknowledgeof,attitudetowards,usesforandresponsestoaproduct
GuidelinesinselectingatargetmarketTargetmarketsshouldbecompatiblewiththefirm’sgoalsandimageMatchthemarketopportunityrepresentedinthetargetmarketswiththecompany’sresourcesFirmsshouldseekmarketsthatwillgeneratesufficientsalesvolumeatalowenoughcosttomakeaprofitSeekamarketwheretherearetheleastandsmallestcompetitorsGeographicSegmentationMarketersconsiderawidevarietyofelementswhentheyusegeographicsegmentationPopulationpatters,climate,growthpatternsandgovernmentTheseinfluencethemarketingmixforacertaingeographicalareaE.g.YouwouldnotmarketsnowskisinTheCaribbean,justasyouwouldnotmarketeBayonlineauctions,inpartsoftheAfricancontinent,asmostpeopledonotevenhavetelephonesyetaloneInternetinfrastructurePsychographicSegmentationSocioeconomicstatus(socialclass)LifestylePersonalityPeople’sinterestinmanygoodsisaffectedbytheirlifestyleandmanygoodstheybuyareexpressionsoftheirlifestyleMarketersusepersonalityvariablestosegmentmarkets,givingtheirproductspersonalitiesthatcorrespondtoconsumerpersonalitiesStrongeffectonpreferencesincars,clothing,homefurnishings,leisureactivities,readinghabits&storechoiceBehaviouralSegmentationOccasions:buyersaregroupedaccordingtotheoccasionswhentheygettheideatobuy,actuallymakethepurchaseorusethepurchaseditemGotmilk?Campaign(marketingmixtargetedtowardsallpersonalities)Benefitssought:groupingbuyersaccordingtothedifferentbenefitstheyseekfromproductRexona’sClose-Uptoothpasteappealstosegmentofconsumerswantingbreathfreshness(cosmeticsegment);Colgate’sUltrabriteisaimedatthosewantingwhiteteeth,asisMacleansAttitude:peopleinamarketcanbeenthusiastic,positive,indifferent,negativeorhostileaboutaproductBackLifestyleSegmentationTargetmarketTargetMarketStrategiesAtargetmarketisagroupofindividuals,organisations,oracombinationforwhichafirmdevelopsandmaintainsamarketingmixsuitableforthespecificneedsandpreferencesofthatgroup.ThreeTargetMarketStrategiesUndifferentiatedDifferentiatedConcentratedUndifferentiatedStrategyUndifferentiatedmarketingAstrategyinwhichyousellonlyoneproductorproductlineandofferittoallcustomersinasinglemarketingmix(massmarketing)Thisapproachcanbeappliedsuccessfullytostaplefooditems:SugarSaltEggsDifferentiatedStrategyDifferentiatedmarketingOffermanyproductsorproductvariationsaimedatspecificsegments,usingmarketingmixesadaptedforeachsegmentTheCoca-ColaCompanyusedundifferentiatedmarketingformostofits100yearhistoryChangedapproachtodifferentiatedmarketingNowofferscaffeine-freeCoke,DietCoke,caffeine-freeDietCoke,CherryCokeetcConcentratedStrategyConcentratedMarketingTargetasinglemarketsegmentwithasingleproductorlimitedlineofproductsCompanygoesafteralargeshareofoneorafewsubmarketsIfacompany’ssalesdependononesegment,companysuffersifdemanddeclinesDellconcentratesonPCsCrayfocusesonlargemainframesupercomputersSegmentationCriteriaAnytimetherearesignificant,measurabledifferencesinyourmarket.Usingthefollowingcriteria:1.Segmentsarelargeenoughandprofitable2.Consumersaredifferent/heterogenous3.Marketsegmentshavesimilarneeds4.Companycanreachthesegmentwithmarketmix5.MustbeabletomeasurethecharacteristicsBenefitsofMarketSegmentationTherearemanygoodreasonsfordividingamarketintosmallersegments.Theprimaryreasons:EasiermarketingFindnichesEfficientConsumerProfileExamplesExample:HondadesigneditsLegendforolder,higher-incomeconsumersanditsCivicforyounger,lower-incomeconsumers.Note:AgeandincomeareonlytwoofmanybasesthatcompaniesuseforsegmentingtheirmarketsLimitationsofMarketSegmentationMoreexpensivethanusinganon-segmentedapproachDifficulttoselectthebestbaseforsegmentingamarketDifficulttoknowhowfinelyorbroadlytosegmentTendencytoappealtomarketsthatarenotviableExample:
SegmentingtheMobilePhoneMarketWhyPositionProducts?Tosimplifybuyingdecisionmaking,consumersorganiseproductsintocategoriesThey‘position’products,servicesandcompaniesintheirmindsMarketersplanpositionsthatwillgivetheirproductsmaximisedadvantageinselectedtargetmarketsMarketingmixesaredesignedtocreatetheplannedpositionsCompetitorMapPositioningisallaboutP
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