Segmentatation, targeting and positioning

7/30/2019 Segmentatation, targeting and positioning

1/34

By Monal Deshmukh


2/34

y

Segmentation Strategies

Mass marketing (undifferentiatedmarketing): offering the

same product to the entire consumer population

Concentrated marketing (focusedor niche marketing):

selecting one market segment, even though the productmay also appeal to others

Differentiated marketing: selecting two or more different

segments


3/34

Undifferentiatedstrategy,

all consumers are treated as the same,

firms not making any specific efforts to satisfy particular groups.

when the product is a standard one like commodities.

Concentratedstrategy,

one firm chooses to focus on one of several segments and leave other segments tocompetitors.

For example, Southwest Airlines focuses on price sensitive consumers who will

forego meals and assigned seating for low prices.

Differentiatedstrategy:

They offer high priced tickets to those who are inflexible and cannot tell in advance

when they need to fly. These travelersusually business travelerspay high fares

but can only fill the planes up partially.

The same airlines then sell some of the remaining seats to more price sensitive

customers who can buy two weeks in advance and stay over.


4/34

(1) Determine which kinds of customers exist,

(2) Select which ones we are best off trying to serve

(3) Implement our segmentation by optimizing our products/services

for that segment and communicating that we have made the

choice to distinguish ourselves that way.

Example: Soft drink consumers are

preference for taste vs. low calories,

preference for Cola vs. non-cola taste,

price sensitivitywillingness to pay for brand

heavy vs. light consumers.


5/34


6/34

Segmentation

The division of a broad market into small segments comprising ofindividuals who think on the same lines and show inclination towards

similar products and brands is called Market Segmentation.

Process of creation of small groups (segments) within a large market

Kids form one segment; males can be part of a similar segment whilefemales form another segment. Students belong to a particular

segment whereas professionals and office goers can be kept in one

segment.


7/34

B2C Segmentation Criteria

Demographic:

Age

Income

Marital Status

Education

Family Size

Gender

Geographic Location

Social Status

Psychographic:

Brand Preferences

Price Sensitivity

Conservative/Liberal

Enviro-Friendly

Hobbies

Lifestyle

Information Sources

Service Preferences

Environmental:

Country of Residence

Political ClimateCurrency

Payment Methods

Shipping & Receiving

Languages Spoken

Demographic:

Annual Revenue

# Employees

Industry

# Locations

Years in Business

Markets Served

Products/Services

Behavioral:

Purchase History

Where They Shop

Type of Store Preferences

Association Memberships

Internet Usage

Impulsiveness


8/34

B2B Segmentation Criteria

Psychographic:Resistance to Change

Diversification

Oriented

Open Minded/RigidDecision Making

Process

Early

Adopter/Follower

Growth

Oriented/Static

Technology

Sophistication

Behavioral:Website Visits

Responses to

Marketing

Purchasing MethodsAssociation

Memberships

Internet Usage

Social Media Groups

Collateral

Views/Downloads

Environmental:Technology Landscape

Purchasing Power

Management Practices

Purchasing ProcessBusiness Culture


9/34

Targeting

Once the marketer creates different segments within the market, he

then devises various marketing strategies and promotional schemesaccording to the tastes of the individuals of particular segment. This

process is called targeting.

Once market segments are created, organization then targets them

with the help of various marketing plans and schemes Nokia offers handsets for almost all the segments. They understand

their target audience well and each of their handsets fulfils the needs

and expectations of the target market.

Tata Motors launched Tata Nano especially for the lower incomegroup.


10/34

Positioning


11/34

Positioning is the last stage in the Segmentation Targeting

Positioning Cycle.

Once the organization decides on its target market, it strives hard to

create an image of its product in the minds of the consumers.

Ray Ban and Police Sunglasses cater to the premium segment while

Vintage or Fastrack sunglasses target the middle income group. Ray

Ban sunglasses have no takers amongst the lower income group.

Garnier offers wide range of merchandise for both men and women.

Men - Sunscreen lotions, Deodorant

Women - Daily skin care products, hair care products

Teenagers - Hair colour products, Garnier Light (Fairness cream)

Older Generation - Cream to fight signs of ageing, wrinkles

A female would never purchase a sunscreen lotion meant for men

and vice a versa. Thats brand positioning.


12/34

Product Positioning

Product positioning is the placement of a product, service, outlet, etc.in the mind of the consumer

There are five ways used to position products, services, outlets, etc.

On perceived benefits

On image

On attributes

Against competitors

Combination of two or more of the above

Repositioning: shifting position in the consumers mind through

changes in important product, price, distribution, and promotional

and/or personal selling benefits.


13/34

Steps in Market Segmentation and

Targeting for Services

IdentifyBases forSegmentingthe Market

STEP 1:

DevelopProfiles ofResultingSegments

STEP 2:

DevelopMeasuresof SegmentAttractive-ness

STEP 3:

Select theTargetSegments

STEP4:

Ensure thatSegmentsAreCompatible

STEP 5:


14/34

Segment Viability

Four factors are used to assess segment viability. Viable

segments are:

Of sufficient size

Measurable Differentiated

Reachable


15/34

SM

Chapter 15

INTEGRATED

MARKETING

COMMUNICATION


16/34

Approaches forIntegrating Services Marketing Communication

Goal:Delivery

greater thanor equal to

promises

ImproveCustomerEducation

ManageService

Promises

ManageCustomer

Expectations

ManageInternal

MarketingCommunication

Figure 15-3


17/34

Goal:Delivery

greater thanor equal to

promises

OfferService

Guarantees

CreateEffectiveServices

Communications

MANAGING SERVICE PROMISES

MakeRealisticPromises

CoordinateExternal

Communication

Figure 15-4

Approaches for

Managing Service Promises


18/34

Communicate Criteria forService Effectiveness

Create Tiered-ValueOfferings

Figure 15-8

Approaches for

Managing Customer Expectations

Negotiate

Unrealistic

Expectations

Goal:

Deliverygreater thanor equal to

promises

Offer Choices


19/34

The End


20/34

3 key differences Customer knowledge of service prices:

Service variability limits knowledge

Providers are unwilling to estimate prices

Individual customer needs vary

Collection of price information is overwhelming

Prices are not visible

Role of non-monetary costs:

Time costs

Search costs

Convenience costs

Psychological costs

Price as an indicator of service quality


21/34

Three Basic Marketing Price Structures and

Challenges Associated with Their Use for Services

P= DC+OC+Profit

Challenges:1. Costs difficult to trace.

2. Labor is more difficult to

price than materials.

3. Costs may not equal the

value that customers

perceive the services are

worth.

Challenges:1. Small firms may charge too

little to be viable.

2. Heterogeneity of services

limits comparability.

3. Prices may not reflectcustomer value.

Challenges:1. Monetary price must be adjusted to reflect

the value of non-monetary costs.

2. Information on service costs is less available to

customers; hence, price may not be a central factor.


22/34

Value is low price.Value is everything

I want in a service.

Value is thequality I get for

the price I pay.

Value is all thatI get for all

that I give.

Four Customer Definitions of Value


23/34

Value is low price.

Discounting

Odd pricing

Synchro-pricing

Penetration pricing

Pricing Strategies When the Customer

Defines Value as Low Price

P i i S i Wh h C


24/34

Value is everythingI want in a service.

Prestige pricing

Skimming pricing


Defines Value as Everything Wanted in a

Service


25/34

Value is the quality I

get for the price I pay.

Value pricing

Market segmentationpricing


Defines Value as Quality for the Price Paid


26/34

Value is all that I getfor all that I give.

Price framing

Price bundling Complementary pricing

Results-based pricing

Pricing Strategies When the Customer Defines

Value as All That Is Received for All That Is Given


27/34

Value is low price. Value is everythingI want in a service.

Value is the quality

I get for the price I pay.

Value is all that I get

for all that I give.

Discounting

Odd pricing Synchro-pricing

Penetration pricing

Prestige pricing Skimming pricing

Value pricing Market segmentation

pricing

Price framing

Price bundling Complementary pricing Results-based pricing

Summary of Service Pricing Strategies for

Four Customer Definitions of Value


28/34

Comprising Three Overlapping

SubsystemsService Operations (front stage and backstage)

Where inputs are processed and service

elements created.

Includes facilities, equipment, and personnel

Service Delivery (front stage)

Where final assembly of service elementstakes place

and service is delivered to customers

Includes customer interactions with operations


29/34

12 - 29

Pricing Services

The characteristics of perishability, inability to

store, and fluctuating demand for services

create pricing challenges.

Pricing Strategies include:

Discount strategies: Cheaper by the week.

A variable pricing strategy: Kids eat free,

movies cheaper on Tuesdays.

Price competition.


30/34

12 - 30

Distribution of Services

because most services are tied directly to aspecific service provider, most have beendistributed directly to customers

with advancing technology, many firms are now

delivering services through machines

channels of distribution are necessarily short;some firms use one agent intermediary, such asinsurance, real estate, and travel agents

some firms use franchisesto distribute services


31/34

12 - 31

Promotion of Services

customer contact personnel represent the mainchannel of customer communication

service providers must ensure that each serviceencounteris a positive one if customers are to

develop a positive image

many professional service firms are nowpermitted to advertise

other elements of the promotional mix are used,including publicity and community affairs


32/34

12 - 32

Four Rs of Service Marketing

Retention

Referrals

Relationships

Recovery


33/34

12 - 33

The Changing Environment

for Services

The boom in the service economy, reduced regulationhas created an increase in competition.

Major focus on increased productivity, efficiency

Work on people aspects of business:

Education, training programs

Change technology:

Computer-based technologies used.

Restructure jobs. Bottom line: People are key to success!

h d


34/34

12 - 34

Other Considerations in

Marketing Services

Impact of Technology: Remember, not everyone likes impersonal

technology

Performance Measurement:

Larger firms can use market share, etc. Customer perceptions are essential.

Prospects for Growth:

It is very likely that services will continue to take anincreasing share of the consumer dollar.

The use of marketing programs in all services isexpected to increase considerably.

Documents

Segmentatation, targeting and positioning