MKT 327 introduction to marketing 1st Edition Lecture 13 Segmentation analysisOutline of Last Lecture A. Purpose: information foundation summaryII. StepsIII. Required informationIV. Definitions V. Target market analysisVI. Segmentation conceptVII. Segmentation analysisVIII. Segmentation variablesIX. Requirements for effective segmentation X. Major age segmentsOutline of Current Lecture B. Concept of market segmentXI. Targeting (segmentation) strategy XII. Criteria for segment attractiveness XIII. Targeting (segmentation) strategies XIV.Degrees of segment focusXV. Strategic framing decisionsXVI.Positioning strategy XVII.Components of a product positionXVIII. Process to develop product mapXIX. Positioning map: competitive frame of referenceXX. Positioning strategies Current Lecture1) Concept of market segmenta) A market segment is sub-set of customers in a given market that have very similar demographic and or psychographic characteristics; and purchase behaviorb) The idea is to reduce the marketing process to a profitable mass to the task of relationship building with an individual These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.2) Targeting (segmentation) strategya) Once markets have been grouped a decision must be made on which groups (segments) to compete fori) Demographicii) Psychographiciii) Geographiciv) Behavioristic3) Criteria for segment attractivenessa) Market size and growth rateb) Competitive factorsc) Cost and efficiency factors d) Segment leadership qualities e) Compatibility factors 4) Targeting (segmentation) strategies a) Non-segmentationi) No segmentationii) Single strategyiii) Mass marketingiv) Product differentiationv) Skips segmentation analysis- sell to everyone in the market b) Undifferentiated (similar to non-segmentation)i) All segmentsii) Single strategy iii) There is a segmentation analysis c) Differentiatedi) All segmentsii) Unique strategy d) Concentratedi) Some segments (pick and choose target segments)ii) Single or unique strategy iii) Possible exam question: Under what conditions would a company implement a target market segmentation strategy?(1) When it is concentratede) Criteria to determine appropriate strategy:i) Company resourcesii) Market behavioriii) Stage in life cycleiv) Level of competition5) Degrees of segment focusa) Concentratedi) 1 or few(1) Niche(a) 1 small(i) Micro marketing1. 1 person (each individual is a target market- extreme)In addition to its foundation the strength of a structure depends on its framework6) Strategic framing decisiona) Segmentation positioning b) General marketingi) Frames mix to achieve7) Positioning strategya) The act of designing, pricing, locating, and communicating a product/service offering to occupy some distinctive spot in customer’ psychological framework8) Components of a product positiona) Value propositioni) The compelling reason customer should select your product(1) The key cluster of benefits the product or service promises to deliver to customers that out match competitors’ offerings on those criteria which matter most to customersii) Movie example(1) Value proposition in that niche- making the ability to stand out/ attract. Made shoes that were heels that could bear the weight of a man, they could be successful with their altered product. The found what the consumer was seeking in their product. b) Position in psychological frameworki) Example: Lojack(1) The automobile security system that places your automobile in direct contact with police authorities (concentrating- car security)ii) Example: OnStar (1) The executive assistance, which at the push of a single button gives you the power to contact, trained OnStar Advisors 24 hours a day, every day. (Deals with personal security across the whole field)c) Position in competitive framework 9) Process to develop product mapa) Determine the criteria customers usei) Category membershipii) Identify attributes(1) What are the product characteristics/features you want to focus oniii) Diagram the most important dimensionsiv) Locate brands relative to other brandsb) Determine product positioni) Identify ideal position of segmentsii) Determine desired product positionc) Determine desired imagei) Develop marketing mix to achieve position10) Positioning map: competitive frame of referencea) TV Talk shows-why would we watch themi) Step 1: ID attributes(1) Relax(2) Be entertained(3) Get informed(4) See ‘celeb’(5) Unwind(6) Background chatter/white noise(7) Form opinionii) Step 2: diagram dimension(1) Social benefit vs. Intellectuality iii) Step 3: locate brands(1) Place them on diagram iv) Step 4: segment ideal points v) Step 5: desired position11) Positioning strategiesa) Demand focusi) Change perception of what it is(1) Based on benefits(2) Based on product class/categoryii) Change perception of when or where it is used(1) Based on time of use/applicationb) Attribute focusi) Improve rating on an attributeii) Change importance of an attributeiii) Introduce a new attribute c) Criteriai) Growth strategy ii) Structure of perceptions(1) ‘Open’ positionsiii) Cost/ value creating