Target Marketing & Positioning
MKT 846
Professor West
Agenda
Finish Team Updates Discuss Targeting & PositioningNext time Tim Londergan from WBNS will join
us
Segmentation & Targeting
Trying to reach “everyone” with a marketing message costs money and sends unwanted messages to people who aren’t customers or prospects. It makes more sense to narrow the audience to people
who are most likely to buy the brand. Segmenting is used to identify these groups of
people. Targeting is the planning strategy for reaching and
communicating with them.
Steps in Segmentation & Targeting:
Identify your most profitable current customers Create profiles of these segments Target these segments to increase retention and
customer growth Use profitable-customer profiles to locate
prospective segments Evaluate prospective segments Target prospective segments that are likely to
respond favorably Continue testing responsiveness of prospective
segments
Step 1: How to determine LVC
Lifetime Value of the Customer Volume (spending) Voice Cost of servicing Potential for growth
RFM Model: Three critical variables:
Recency, Frequency, Monetary Value
The Customer Pyramid
Most Profitable
Least Profitable
PlatinumPlatinum
GoldGold
IronIron
LeadLead
Step 2: Profiling Segments
There are many bases for segmentation Behavior/Benefit Demographic/Geodemographics Psychographics & Lifestyle Relationship level Adopters
The objective is to create a useful description of segment that describes: Who are they? How can they most effectively be reached?
Why do they buy their brands of choice? How will they respond to our message?
Claritas – Prizm Segmentation
Segment Descriptions
VALS Psychographic segmentation
http://www.sric-bi.com/VALS/
Goal of Profiling
Selecting a Target Market
Measurable – Can we identify and quantify the segment?
Accessible – Can we reach this segment efficiently and effectively?
Substantial – Is there enough critical mass to be profitable?
Differential – Is this segment distinct from others? Actionable – Can we serve this segment? Do we
have the capacity and budget?
Moving on to Positioning
“This is the art and science of fitting the product or service to one or more segments in such a way to set is apart from competition”
“Positioning is how your product is perceived on the hearts and minds of consumers”
Many advertising practitioners consider this to be the most important factor in establishing the brand in the marketplace.
Positioning, the battle for your mind…
Trout & Ries suggest asking yourself the following questions: What position, if any, do you already have in the prospect’s mind?
(this most come from consumers not managers) What position do we want to own? What companies must be outgunned if we are to establish that
position? Do we have enough resources to occupy and hold the position? Do we have enough guts to stick with one consistent positioning
strategy? Does our creative approach match our positioning strategy?
Positioning Strategies
Product attributes & benefits
Price/Quality Use or Application Product Class Product User Competitor Cultural Symbol
Next Time…
Read Chapters 9 -11 Prepare questions for Tim Londergan
regarding targeting and media selection Begin the process of developing a positioning
strategy for your brand and communication objectives