D Whitney BMGT350 Fall 2012 Chapter 8 Segmenting Targeting and Positioning Variables used to segment consumer markets Benefits Needs Demographics o Benefits Sought Important Needs o Age or generation o Gender o Income or social class o Family life cycle o Race ethnicity Psychographics Geography o Personality o Motives o Lifestyle o Region o Climate o Market Size o Former User o Loyal User o 1st time user Behavior Usage o Heavy user o Occasional user Cluster customers into homogenous customer segments that differ from other segments based on needs and wants sometimes there aren t distinct clusters Identify observable traits of those segments Variables used to segment business markets Geographic location Company characteristics o Industry o Company size o Volume of purchase Buying process Analytical tools for segmentation Mediamark o Helpful for demographic segmentation o Provides media habits websites visited tv shows watched magazines read etc o Available for many consumer products and some business products services largely electronics finance and insurance o Collect data from 20 000 customers annually Surveys o Useful for collecting demographics combined with benefits needs sought in choosing o See handout for Sample Segmentation Survey of Hotel Market o Survey data can be analyzed with statistical procedures such as Cluster Analysis to determine segments Cluster Analysis Results of Hypothetical Segmentation Survey Segment Profiles Identified via Cluster Analysis Middle Managers prefer convenience but also want nice room good service largely male professionals with an average age of 44 1 5 days average stay 334 average rate prefer Hyatt travel alone 1 6 8 13 17 19 Technical prefer convenience and value equally split among males and females in technical jobs with an average age of 28 1 5 days average stay 147 average rate prefer Marriott Holiday Inn Sheraton 2 5 11 14 18 21 24 Partners Top Executives prefer nice room first followed by good service largely male professionals with an average age of 41 3 75 average days 353 average rate prefer Hyatt followed by Ritz Carlton Hilton 4 15 23 25 Retirees Prefer value followed by convenience males females with average age of 50 3 2 average days 68 average rate prefer Econolodge 3 9 10 12 16 22 Picking the Target Market s Once Segmentation is complete evaluate each segment on these criteria o Fit of the segment with company s goals mission and current o Company s Strengths Weaknesses with that segment o Resources necessary to market successfully to the segment o Need for availability of appropriate collaborators to market positioning successfully o Competitive intensity Impacts difficulty in targeting a segment o Forecasted financial returns from the segment Demand growth potential marketing expenses etc Targeting Strategies Undifferentiated technology Concentrated Multi Segment Positioning Strategy Proposition Target everyone in the market with a general marketing approach that fits the average Often least effective use of marketing budget Micro Marketing One to One Segments of One Customized solutions Usage is increasing largely due to new Target a single segment large or niche Offer 1 or more products services to this single segment Target multiple segments each with a different product marketing After target market selection Also known as Differentiation Value Proposition or Unique Selling Designing the firm s market offering so that it occupies a distinct and valued place in the minds of its target customers o Evaluate competition and identify product strengths o Identify what s most important to customer choice for your targeted o Emphasize something your brand excels at and is important to segment customer choice Umbrella Positioning for a family brand Commonly used to establish corporate positioning or Unique Positioning For an individual brand or individual product Three Circles Positioning Framework For New Products Important to first market the points of parity Then position on points of difference Pick based on criteria Unique Important to Target Customers and Excel Relative to Competition o Attributes Features o Price and or Quality o Product Form o Customer Service o Employees o Durability or Reliability Positioning Statement o Services or Extras o Personality Image o Ordering Delivery Ease o Distributors For the target market our product brand is single most important claim points of difference among competitive frame because most important supporting fact s o Example For quality conscious consumers of chicken Perdue chicken is the freshest most tender golden chicken you can buy because we only feed our chickens natural grains with no hormones or steroids Role of the Targeting and Positioning Targeting Positioning are the foundation from which marketing mix decisions are made Pricing decisions Product Service decisions What features or services are needed to How should the product be priced relative to deliver the required benefits of your chosen target market competition to convey our chosen positioning to our target market desired perception in the target customer s mind Through which channels should the good or service be Place marketed to create the desired perception in the target customer s mind What should promotional messages say to create the Promotion Using Perceptual Maps to Determine Consumer s Perceptions of Positioning Useful for identifying customers perceptions of competitive position Perceptions drive purchase Created via statistical analysis of survey data on brand comparisons Helps company determine how marketing strategy needs to change Chapter 9 Marketing Research When should Marketing Research be conducted Where there is a high level of uncertainty in what marketing strategy is When value of research information exceeds the cost of generating the best information When time budget permits Role of Marketing Research Descriptive Diagnostic Predictive Gathering and presenting factual statements Analyzing and explaining data to diagnose causes Make What if predictions regarding marketing decisions Marketing research process Sampling Probability Samples a known statistical likelihood of being selected get a representative cross section of the population Non Probability Samples Common Marketing Research Topics A sample in which every element in the population has Any sample in which little or no attempt is made to New product concepts Advertising Pricing Package design Names and logos Service quality
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