Segmentation, Targeting and Positioning L4 Flashcards
What is segmentation?
Method by which whole markets are subdivided into different segments.
What is targeting?
Method by which particular segments are selected.
What is positioning?
Method by which a brand becomes most attractive to selected segments.
How does segmenting take place?
Identify, analyse and describe market segments.
How does targeting take place?
Evaluate each and decide to go after.
How does positioning take place?
Design a product/service to meet a segment’s needs; develop offer and marketing mix that will create a competitive advantage in the minds of the selected target market
What is the marketing concept?
Target market –> Customer Needs –> Integrated Marketing –> Profits Through Customer Satisfaction
What is a market?
- It is created when producers and consumers meet, for the purposes of exchange, online or offline
- Contains people (or institutions) with sufficient purchasing power (actual or credit), authority and willingness to buy
- Grey, parallel, black, illegal etc
What happens if you define your market wrong?
If you define your market wrong, your segmentation, targeting and positioning strategies and subsequently your offerings might be irrelevant to your customers/customer segments
What is a market segment?
A group of buyers with similar needs and wants who respond in a similar way to marketing actions
What is a target market?
The segments of the market you will try to reach.
Why segment the market?
- Not everyone wants the same thing
- Buyers have increasingly varied and sophisticated needs, expectations etc
- Helps design and focus marketing programmes
- Helps determine resource allocation
- Allows matching demand and supply
- Increases the efficiency and effectiveness of companies
What segmentation rationales exist?
- Range of different consumer needs
- Range of purchase behaviour
- Range of places/channels/types of availability
- Range of price elasticity
- Limited competencies and capabilities in company
- Range of competitive offerings
Linking to needs and wants to focus marketing activities.
What is the segmentation process?
- Identify the broad market of interest
- Identify key buyer characteristics
- Cluster buyer types: identify truly differentiating dimensions, name/label the different segments
- Find out why they behave the way they do
- Make rough estimates of size, potential and cost of each segment
What ways exist to segment the consumer markets?
- Profile (general) - demographic, socio-economic, geographic
- Psychographic (domain) - lifestyle, personality, influencers and role models
- Behavioural (specific) - benefits sought, purchase occasion, purchase behaviour, usage, perceptions and beliefs
What are the 5Ws and 1H in terms of understanding customer segments?
How do they use the product?
Who is involved in buying and consuming?
What are their choice criteria?
When do they buy/use the product?
Why do they buy/use the product?
Where do they buy?
What is perceptual brand mapping?
- Visual representation of market, from consumers’ perspective
- According to criteria valued by consumers
- How consumers see their product vs competition
- Identifies gaps in the market
- Can show gap between how consumers see brand and how company sees it
Why is segmentation beneficial?
- It is necessary to understand complexities in the market regarding existing needs and wants
- Segmentation prepares the ground for targeting sub segments of the market with specific offerings that are tailored to service their specific needs/wants
What levels of segmentation exist?
Mass marketing - no segmentation
Market segmentation - significant chunk
Niche marketing - small, more profitable chunk
Micro marketing - tiny, highly specialised bit
What variables might be used for segmentation?
- Geographic
- Socio demographic
- Customer value
- Psychographic (lifestyle, attitudes)
- Consumer behaviour (e.g purchase behaviour, benefit)
What are the targeting strategies?
- Undifferentiated (mass) marketing: one product to entire market
- Differentiated
- Niche
- One to one
What is a differentiated marketing targeting strategy?
- For different segments of the market
- Different products/or marketing mixes
- Very common targeting strategy: pursued by most large FMCG companies, global car makers
- Organic vs acquisition
- Not an option for all companies
What is a niche marketing targeting strategy?
- Market to one segment or a few segments - not the entire marketing
- Maximise resource effectiveness: financial, HR, skills, knowledge, competencies
- Particular attractiveness to one segment
What is a one to one marketing strategy?
- Literally a different product/marketing mix for individual customers
- Become possible because of advances in IT
- Or price premium
