Marketing Management Session 6

Identifying Market

Segments and Targets

8-2

Effective Targeting Requires…

Identify and profile distinct groups of buyers who differ in their needs and preferences.

Select one or more market segments to enter.

Establish and communicate the distinctive benefits of the market offering.

8-3

Four Levels of Micromarketing

Segments Niches Local areas Individuals

8-4

Segment Marketing

Targeting a group of customerswho share a similar set of

needs and wants.

8-5

Flexible Marketing Offerings

Naked solutionProduct and

service elements that all segment members value

Discretionary optionsSome segment

members valueOptions may carry

additional charges

8-6

The Experience Economy

Experience Services Goods Commodity

8-7

Customerization

Combines operationally drivenmass customization with customizedmarketing in a way that empowers

consumers to design theproduct and service offering

of their choice.

8-8

Segmenting Consumer Markets

Geographic Demographic Psychographic Behavioral

8-9

Demographic Segmentation

Age and Life Cycle Life Stage Gender Income Generation Social Class

8-10

Psychographic Segmentation

VALS Four groups with higher resources

InnovatorsThinkersAchieversExperiencers

8-11

Four groups with lower resourcesBelieversStriversMakersSurvivors

(www.sric-bi.com)

Psychographic Segmentation

8-12

Behavioral Segmentation

Decision Roles Initiator Influencer Decider Buyer User

Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

8-13

Steps in Segmentation Process

Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Marketing mix strategy

8-14

Effective Segmentation Criteria

Measurable Substantial Accessible Differentiable Actionable

8-15

DISCUSSION

Is Mass Marketing dead?

8-16

DISCUSSION

Think of various product categories. How would you classify yourself in terms of the various segmentation schemes? How would marketing be more or less effective for you depending on the segment involved? How would you contrast demographic versus behavioral segment schemes? Which ones do you think would be most effective for marketers trying to sell to you?

Dealing with Competition

8-18

Figure 1.1 Five Forces Determining Segment Structural Attractiveness

Potential entrants Suppliers Buyers Industry competitors Substitutes

8-19

Industry Concept of Competition

Number of sellers and degree of differentiation

Entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization

8-20

Industry Concept of Competition

Pure monopoly Oligopoly Monopolistic competition Pure competition

8-21

Analyzing Competitors

Share of market Share of mind Share of heart

8-22

Expanding the Total Market

New customers More usage

8-23

Figure 11.6 Six Types of Defense Strategies Defender Flank Preemptive Counteroffensive Mobile Contraction

8-24

Other Competitive Strategies

Market challengers Market followers Market nichers

8-25

Market Challenger Strategies

Define the strategic objective and opponents

Choose a general attack strategy Choose a specific attack strategy

8-26

General Attack Strategies

Frontal attack Flank attack Encirclement attack Bypass attack Guerrilla warfare

8-27

Specific Attack Strategies

Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation

Product innovation Improved services Distribution innovation Manufacturing-cost

reduction Intensive advertising

promotion

8-28

Market Follower Strategies

Counterfeiter Cloner Imitator Adaptor

8-29

EXERCISE

Pick an industry. Classify firms according to the four different roles they might play: leader, challenger, follower and nicher. How would you characterize the nature of competition? Do the firms follow the principles described above?