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8/8/2019 Segmentation Ch. 9
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Segmentation and
Differentiation
Chapter 9
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Segmentation
Target marketing requires:
Identify and profile distinctgroups of buyers who might
require separate marketing
mixes
Select one or more segments toenter
Establish and communicate the
products key benefits to the
market
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What is a Target
Market?
Group of people which a firm
designs, implements and
maintains a marketing mix
intended to meet the needs of
the group.
Options include:
Undifferentiated strategy
Concentrated strategy
Multisegment strategy
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Market Segments
Segments v. sectors
Segment: subgroup of peoplesharing 1+ characteristics that
cause them to have similar
product needs
Market segmentation:
process of dividing a market
into a meaningful relatively
similar groups.
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Criteria for
segmentation
Measurable
Substantial Accessible
Responsiveness/Actionable
Differentiable
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Bases for Segmentation
Geography: region, marketsize, climate etc.
Demographics: age, gender,income, ethnic background,family life cycle
Psychographic: personality,motives, lifestyles, values
Benefit: what consumers getout of it; occasions, benefits,
user status, usage rate, loyalty
Usage rate: 80/20 rule, newusers, medium users etc.
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Benefit Segmentation
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Group activity
Candy segmentation exercise
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Making your Product
Stand Out:
Positioning and theArt of Differentiation
Based in part on
Differentiate or Die:Survival in Our Era of Killer
Competition
Jack Trout
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Its all in your head
Differentiation takes place in
the mind.
Minds are limited and cant
cope with a lot of information
Minds hate confusion and love
simplicity
Minds are insecure and buy
what others buy
Minds can lose focus
MINDS DONT CHANGE?? Do
they???
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Ad for?
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Ad for Marlboro
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Cover of what catalog?
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More help?
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Their current
publication
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USP
Unique Selling Proposition
Each ad must make aproposition to the consumer.
Not just words, not just productpuffery, not just show windowadvertising. Buy this productand you will get this specificbenefit
The proposition must be onethat the competition cannot
copy The proposition must be so
strong that it can move millions
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The Art of Positioning
Process that influences
potential customers overall
perception of a brand, productline or organization in general;
the place in the mind relative to
the competition
Perceptual map means of
displaying or graphing, in two
or more dimensions, the
location of products, brands orgroups of products in
consumers minds.
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How to Do it
Make Sense in the Context
Find the Differentiating Idea Have the Credentials
Communicate your Difference
It helps to be RICH!! Potential Errors:
Underpositioning-Crystal Pepsi
Overpositioning- Tiffanys
Confused Positioning NeXT
computer
Doubtful Positioning- Cadillac
Cimarron
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What are the
Possibilities?POSITION ON
Attribute Benefit
Use or Application
User Competitor
Product Category
Quality or price Repositioning
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Positioning examples
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Perceptual Map
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Bad Differentiators Quality and Customer Orientation
It is a GIVEN!
1983 American Airlines launched a
Aadvantage program Price
How low can you go?
Exceptions: Wal Mart, Dell based on
something else after price Competitors can get around it
Unless it is high price (Rolex)
Creativity
The A.E.s v. the Creatives
Coca Cola and Mean Joe Green;
Polar bears
Breadth of Line
Category killers can get too big
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Good Differentiators Being First
Most firsts stay first (Coke, Xerox,
Advil
Becomes the generic advantage
Not a guarantee of success & can be
bad idea (smokeless cigarettes)
Attribute ownership
Own what is most important to
customer (Crest)
Leadership
Let everyone know it
Heritage Based on time, location, family,
character
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Good Differentiators
Market specialty Be the expert!
Preference
Can be legitimate, ethical,emulation (fit)
How the product is made
Technology, special ingredient
(DiGiorno Pizza, PapaJohns),handcrafted, packaging
Being the latest
Intel (makes itself obsolete);
ulcer meds; technology Dont solve a nonexistent
problem; must be better; dontmess with tradition
Hotness Tastes, trends, PR
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Repositioning
Changing customers
perception of a brand in
relation to competing brands.
Why do it?
Changing demographics
Declining sales
Changes in social environment
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SUVs
What are the
Differentiators in this
Category?
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Dodge Durango
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Chevy Trailblazer
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Chevy Trailblazer(again)
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GMC Envoy
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Subaru Outback
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Lincoln Navigator
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Lincoln Navigator(again)
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Buick Rendezvous
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Toyota Sequoia
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Toyota Highlander
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Ford Escape