L7: Segmentation, Targeting and Positioning Flashcards
Segmentation
Identification of different groups in a market in order to develop different product/service offering for each segment.
Benefits of segmentation
- Identify a cluster of similar consumers
=> More efficient use of resources and improve firm performance. - Identify a profile of its typical desired customer.
=> Develop a product configuration, pricing scheme, promotional campaign, and distribution coverage plan to best meets the needs.
Types of segmentation
Geography, Demography, Psychography, and Behaviour.
Cross-border segmentation and international challenge.
Geographic bases for segmentation
- Ranging from local to global.
- Local segmentation: used by small firms in the beginning.
- Global segmentation: risk of cultural inappropriateness.
- Topography: includes elements like rivers, mountains, lakes, and valleys which may affect population movement.
Psychographic bases for segmentation
Based upon similarity of value, attitude, lifestyle, personalities, and social class/status.
Behaviouristic bases for segmentation
Built around similar understanding, use and responses to particular product/service.
Framework for segmentation
- Customer characteristics:
+ soft - psychographic (value, lifestyle, attitudes)
+ hard (geography; socio-economic and demographic) - Customer behaviour:
+ objective: loyalty/repeat purchase, price sensitivity, promotional response, usage
+ subjective: benefits, perceptions, preference trade-offs
Cluster analysis
Classify objects so as to minimize within-group differences and maximize between-group difference.
Conjoint analysis
The use of series of possible product/service attribute combinations to see which ones are preferred by respondents.
ex: Coca with lime, vanilla Coke or cherry Coke testing.
Discriminant analysis
Identify a series of variables to discriminate the group membership from others.
Multidimensional scaling
Visually demonstrates how particular consumers view various offerings in particular products/service. It’s used to determine which attributes are most distinctively associated with it.
ex: Perceptual mapping.
Targeting
Actually deciding what the appropriate offer is for the aforementioned segments and develop a product/service offering to serve them.
5 choices of coverage (Derek F. Abell, 1980)
- Single-segment concentration: “a product per segment”
- Selective specialization: some “a product per segment”
- Product specialization: “a product per segments”
- Market specialization: “products per segment”
- Full market coverage: “products per segments”
How attractive is the target segment?
- Market growth: Segment size, Growth rate, Market potential.
- Competitive intensity: Five forces + exit barriers.
- Company objectives: Fit with companies, Match with resources, Customer familiarity, Channel access.
Criteria to evaluate the target segment:
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable
Online targeting variable
- Relationship with company
- Demographic segmentation
- Psychographic or Attitude segmentation
- Value
- Lifecycle stage
- Behaviour
Lifecycle stage in Online targeting variable
Position in lifecycle related to value and behaviour.
Ex: time since intial registration
Value in Online targeting variable
Assessment of current and future value.
Psychographic or Attitude segmentation in Online targeting variable
Attitude to risk and value when buying.
Ex: early adopter, brand loyal or price conscious.
Relationship with company in Online targeting variable
Prospects, existing customers, lapsed customers.
Demographic segmentation in Online targeting variable
B2C (age, gender, social group) and B2B (firm size, industry served, individual members).
Online retargeting stages
1st-time visitor > Return visitor > Newly registered visitors > Registered visitor > Purchased once or n times > Purchase inactive > Purchase active
Positioning
Understanding where our product/service offering stands in the minds of our customers and attempting to influence said position.
Goal of positioning
- Ensure the target consumer has a clear and distinctive image in mind that is consistent and positive regarding the product/service.
- Keep brand name automatically at the top of the choice possibilities.
