Define at least 3 market segments for the Smart Car in China. Use:◦ Demographics - age, gender, ethnic group,

income, education, occupation and family structure

◦ Benefits - consumer needs and wants ◦ Behavior - How consumers act toward, feel about

or use a product◦ Psychographics - shared activities, interests,

opinions

• Price - 160,000 to 210,000 RMB• 2.69 meters long – can park

anywhere• standard black interior trim,

black safety shell and available in six colors.

• 3-cylinder (71HP) engine, • automated manual transmission• roughly 64 kilometers per gallon • requires premium gas • Speed – up to 145 km/h• 80% of all materials are

recyclable - the Smart Pure is green, lean and mean.

• Removable body panels are light, flexible and well made. You can change the panels, thus changing the colors, as you would your watchband.

Chery QQ costs about 32,500 RMB

Smart Car - Smart Fortwo

Evaluate the attractiveness of each potential market segment.

Develop Segment Profiles

The customer group or groups selected become the company’s target market.

Choose a Targeting Strategy

• Are members of the segment similar to each other

but different from other segments?

• Can we measure the segment?

• Is the segment large enough to be profitable?

• Can marketing communications reach the segment?

• Can we produce a product that will serve the

segment’s needs and do so profitably?

• Is there potential growth in this segment?

• How strong is the competition?

• Can we reach this segment through our existing

distribution channels?

How do the segments we came up with for Smart Car satisfy these questions?

How about the Skoda Octavia Mingrui?

Four basic segmentation strategy alternatives. We may decide:• not to enter the market• not to segment but to be a mass

marketer• to market to only one segment• to market more than one segment and

design a separate marketing strategy for each

Customized Marketing

One or more products for each of several customer groups with different product needs.

Appealing to a broad spectrum of people

One or more products to a single segment

Products or services that exactly meet the unique needs of each individual or firm.

Examples:

Wal-Mart

Cosmetic companies with multiple brands

Smaller firm that does not have the resources or desire to be all things to all people

Professional services – doctors, lawyers. Also firms that have one or two large customers

Choosing a Targeting/Segmentation Strategy

Which of these targeting/segmentation strategies is Skoda using in China?

What about the Smart Car?

Step 3: Positioning

Positioning is the act of designing an organization’s offering and image so that it occupies a distinct and valued place in the target customer’s mind relative to competitive offerings.

POSITIONING STRATEGIES

Strategies include positioning by:

Product or Brand UserProduct or Brand User

Use orApplicationUse orApplication

Attribute or BenefitAttribute or Benefit

Product orService ClassProduct orService Class

Price andQualityPrice andQuality

CompetitorsCompetitors

Marketers often combine two or more of these strategies when positioning a product, service, or brand.

Once the desired positioning has been determined, marketers prepare a succinct, written positioning statement.

A positioning statement identifies:• The target market and needs satisfied• The product (service) class or category in which

the organization’s offering competes• The offering’s unique attributes or benefits

CRAFTING A POSITIONING STATEMENT

A positioning statement takes this form:

For (target market and need), the (product, service, brand name) is a (product/service class or category) that (statement of unique attributes or benefits provided).

Example:“For upscale American families who desire a carefree driving experience, Volvo is a premium-priced automobile that offers the utmost in safety and dependability.”

The most commonly-used method of positioning

Margarine competes as an alternative to butter. Margarine is positioned as a lower cost and healthier alternative to butter, while butter provides better taste and wholesome ingredients

Volvo’s emphasis on safety

Ritz Carlton hotels focus on luxury; Motel 6 focuses on economy.

For a light beer, it might be that it tastes great or that it is less filling.

For toothpaste, it might be the mint taste or tartar control.

Crest toothpaste focuses on reducing cavities.

Use or Application

Types of Product Users

Computers – How they will be used – home vs. office, graphic designers, animation

Insurance policies - specifically designed for senior citizens

Computers - travelers

Product Class A manufacturer of vinyl shutters may propose that vinyl is more durable, easier to clean and need less maintenance than wood shutters.

Autos – full-size, compact, sub-compact

Price or quality

Some firms use a high price (premium pricing) strategy to indicate that their product is high or superior quality, for example Godiva or Dove chocolates.  Other firms use a lower price, good quality strategy.

Tiffany and WalMart both sell diamonds. Tiffany wants us to believe that their diamonds are of the highest quality, while WalMart tells us that diamonds are diamonds and that only a stupid or foolish person will pay Tiffany prices.

Against competitors BMW and Mercedes often compare themselves to each other segmenting the market to just the crème de la crème of the automobile market. Ford and Chevy need not apply.

Hertz and Avis:• Hertz – We’re Number

One.• Avis – We Try Harder

How is Skoda positioning its cars in China? What is the position of the Octavia

Mingrui?The Fabia Jingrui?

Octavia Mingrui Fabia Jingrui

No

No

Yes – families

Yes – compact cars

No

No

Yes – highlighting 5 key product benefits

No

No

Yes – sub-compact cars

No

No

Attribute or Benefit

Use or Application

Types of Product Users

By Product Class

Price or Quality

Against Competitors

Develop a positioning strategy for the Smart Car using each of the strategies:Superior to Competitive Products (based on one or more attributes)Use or ApplicationTypes of Product UsersProduct ClassPrice or QualityAgainst Competitors

Changyu Wine executives have accepted your SWOT analysis. Now they want you to develop a segmentation and targeting strategy.

Working in the same groups:◦ Identify and describe at least 3 market

segments for Changyu wine in China, and ◦ Discuss the questions on the slide “Evaluating

Market Segments” and how you will respond to each of them.

◦ Develop a positioning strategy for each market segment.

Oral Presentations next week – April 1