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The Marketing Process
Chapter Two & Seven
Target Consumers
Product
Place Price
Promotion
Competitors
Marketing Intermediaries
Publics Suppliers
Demographic- Economic
Environment
Technological- Natural
Environment
Political- Legal
Environment
Social- Cultural
Environment
The Marketing Process
How do Companies identify their Target
Consumer?
S-T-P Market Segmentation
1. Identify bases for segmenting the market 2. Develop segment profiles
Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments
Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
• Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior.
Companies divide large, heterogeneous markets
into smaller segments that can be reached more
efficiently and effectively with products and services that match their unique
needs.
How can you segment the market?
Sheet
Density or Climate
City or Metro Size
World Region or Country
Geographic Segmentation
Demographic Segmentation
• Dividing the market into groups based on variables such as: – Age – Gender – Family size or life cycle – Income – Occupation – Education – Religion – Race – Generation – Nationality
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
Behavioral Segmentation
• Dividing the market into groups based on variables such as: – Occasions – Benefits – User status – Usage rate – Loyalty status – Readiness stage – Attitude toward product
• Size, purchasing power, profiles of segments can be measured.
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond differently to different marketing mix elements & programs.
• Effective programs can be designed to attract and serve the segments.
Step 1. Market Segmentation Requirements for Effective Segmentation
How Do you think the following organizations segment the market?
1. Pepsi Co. 2. Lipton 3. Hyundai 4. Bibliotheca Alexandrina 5. Renaissance Movie Theater
Discussion Connections
• Can you identify specific companies, other than the examples already discussed, that practice each level of segmentation?
• Using the segmentation bases, segment the footwear market.
• Describe each of the major segments and sub segments.
Market Targeting Evaluating each segment’s attractiveness
and selecting one or more segments to enter.
Target Market – a set of buyers sharing common needs or characteristics that the company decides to serve
Evaluating Market Segments • Segment Size and Growth
– Analyze current sales, growth rates and expected profitability for various segments.
• Segment Structural Attractiveness – Consider effects of: competitors, availability of
substitute products and, the power of buyers & suppliers.
• Company Objectives and Resources – Company skills & resources needed to succeed in
that segment(s). – Look for Competitive Advantages.
Discussion Connection
• At the last Discussion Connection, you segmented the U.S. footwear market. – Now, pick two companies that serve this market and
describe their segmentation and targeting strategies. – Can you come up with one that targets many different
segments versus another that focuses on only one or a few segments?
• How does each company you choose differentiate its marketing offer and image?
• How has each done a good job of establishing this differentiation in the minds of targeted consumers?
Market Positioning Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target
consumers. EXAMPLE: Chevy Blazer is “like a rock.”
Choosing a Positioning Strategy
Step 1. Identifying Possible Competitive
Advantages
Step 2. Selecting the Right Competitive
Advantage
Step 3. Communicating and Delivering the Chosen Position
Identifying Possible Competitive Advantages
• Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value.
• Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,
Communicating and Delivering the Chosen Position
• Once position is chosen, company must take strong steps to deliver and communicate the desired position to target consumers.
• All the company’s marketing mix must support the positioning strategy.
• Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies.