Segmentation, targeting & positioning Flashcards
Homogeneous Markets
Markets in which customers have similar product needs, wants and sought benefits.
Segmentation
The process of dividing a market into distinct groups with distinct needs, who might require separate products or marketing mixes.
Benefits of segmentation
Customer analysis
Competition analysis
Resource allocation
Strategic market planning
Different ways to segment
Geographic
Demographic
Psychological
Behavioural
Geographic segmentation
Country or continent
Country region
City
Population density
Demographic segmentation
Age Generation Family size Family lifecycle Income Occupation Religion Education
Disadvantage to segmentation
People with the same demographic profile can exhibit different characteristics
Psychological segmentation
Social class
Lifestyle
Personality
Value - compassionate, materialistic etc.
Behavioural segmentation
Occasions Benefit - quality, service User rates Loyalty status Attitudes towards products
Geodemographics
- combines many approaches to segmentation
- based on postcode analysis
- where we live is correlated with many aspects of buying behaviour
Criteria for segmentation effectiveness
Measurable Substantial Accessible Differentiate Actionable
Levels of segmentation
Undifferentiated
Differentiated
Concentrated
Undifferentiated
Least demanding approach Assumes the whole market is one homogenous unit with no significance between individuals Wide appeal Low cost Possible economies of scale
Undifferentiated
Market divides into segments Each segment has a marketing mix Tailored offer to each segment Able to provide individual satisfaction More risky over more than one segment
Concentrated
Focus on a single segment
Specialised approach
Niche marketing concentration of resources in one segment makes for a strategically defendable position against generalists
Evaluation of market segments
- market segments need to be evaluated and ranked for possible targeting
- evaluations is typically based on…
Size of segment
Growth prospects
Profitability
Competitive pressure
The purpose of market planning - McDonald
The overall purpose of marketing and its principal focus is the identification and creation of competitive advantage.
How does planning help?
Avoids uncoordinated actions, lack of focus, lack of match between strategies and tactics.
Identifies potential threats before they become actual threats and opportunities before they are missed.
Types of marketing planning
- strategic plans Typically for 3-5 year period - tactical plans Typical for the year ahead - contingency plans An alternative plan if assumptions prove to be false
Market planning process
1- corporate objectives 2- marketing audit External analysis and internal analysis. 3- Swot analysis 4- marketing objectives SMART 5- marketing strategies Build brand awareness, increase market share, reposition the brand 6- marketing programmes (tactics) Seven p's marketing mix 7- budgets 8- control and evaluation
Segmentation process
Segmentation - Research into the best segment, looking at profiles and emerging markets Targeting - Decide on targeting strategy Which and how many segments should be targeted Positioning - Understand consumer perceptions Position in the mind of the consumer Design that marketing mix
Hetrogeneous Markets
Markets in which all customers have different requirements
MOSAIC
A UK experian system for classification of UK households. Based on Geodemographic segmentation from households and individual data collated from a number of governmental and commercial sources.
Boiled frog syndrome - Handy
Something a business can fall into - if the frog jumps in hot water, it jumps back out. If it is slowly boiled in the water, it dies.
Coveys 7 habits
Be proactive Begin with the end in mind Putting first thing first Think win-win Seek first to understand Synergies Sharpen the saw
Ansoffs matrix
Market development - new market, same product
Diversification - new market, new product
Market penetration - same market, same product
Product development - same market, new product
Marketing Mix quotes
McCarthy
Marketing mix criticisms
- focuses on what marketers do to the customer rather than for them
- externally directed, informing internal market
- mechanistic view of markets - fixated
- assumes more transactional than relational
Booms and Bitner
Came up with the extra 3 p’s in the marketing mix.
People, process, physical evidence.
