Segmentation Ch. 9

8/8/2019 Segmentation Ch. 9

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Segmentation and

Differentiation

Chapter 9


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Segmentation

Target marketing requires:

Identify and profile distinctgroups of buyers who might

require separate marketing

mixes

Select one or more segments toenter

Establish and communicate the

products key benefits to the

market


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What is a Target

Market?

Group of people which a firm

designs, implements and

maintains a marketing mix

intended to meet the needs of

the group.

Options include:

Undifferentiated strategy

Concentrated strategy

Multisegment strategy


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Market Segments

Segments v. sectors

Segment: subgroup of peoplesharing 1+ characteristics that

cause them to have similar

product needs

Market segmentation:

process of dividing a market

into a meaningful relatively

similar groups.


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Criteria for

segmentation

Measurable

Substantial Accessible

Responsiveness/Actionable

Differentiable


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Bases for Segmentation

Geography: region, marketsize, climate etc.

Demographics: age, gender,income, ethnic background,family life cycle

Psychographic: personality,motives, lifestyles, values

Benefit: what consumers getout of it; occasions, benefits,

user status, usage rate, loyalty

Usage rate: 80/20 rule, newusers, medium users etc.


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Benefit Segmentation


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Group activity

Candy segmentation exercise


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Making your Product

Stand Out:

Positioning and theArt of Differentiation

Based in part on

Differentiate or Die:Survival in Our Era of Killer

Competition

Jack Trout


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Its all in your head

Differentiation takes place in

the mind.

Minds are limited and cant

cope with a lot of information

Minds hate confusion and love

simplicity

Minds are insecure and buy

what others buy

Minds can lose focus

MINDS DONT CHANGE?? Do

they???


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Ad for?


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Ad for Marlboro


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Cover of what catalog?


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More help?


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Their current

publication


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USP

Unique Selling Proposition

Each ad must make aproposition to the consumer.

Not just words, not just productpuffery, not just show windowadvertising. Buy this productand you will get this specificbenefit

The proposition must be onethat the competition cannot

copy The proposition must be so

strong that it can move millions


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The Art of Positioning

Process that influences

potential customers overall

perception of a brand, productline or organization in general;

the place in the mind relative to

the competition

Perceptual map means of

displaying or graphing, in two

or more dimensions, the

location of products, brands orgroups of products in

consumers minds.


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How to Do it

Make Sense in the Context

Find the Differentiating Idea Have the Credentials

Communicate your Difference

It helps to be RICH!! Potential Errors:

Underpositioning-Crystal Pepsi

Overpositioning- Tiffanys

Confused Positioning NeXT

computer

Doubtful Positioning- Cadillac

Cimarron


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What are the

Possibilities?POSITION ON

Attribute Benefit

Use or Application

User Competitor

Product Category

Quality or price Repositioning


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Positioning examples


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Perceptual Map


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Bad Differentiators Quality and Customer Orientation

It is a GIVEN!

1983 American Airlines launched a

Aadvantage program Price

How low can you go?

Exceptions: Wal Mart, Dell based on

something else after price Competitors can get around it

Unless it is high price (Rolex)

Creativity

The A.E.s v. the Creatives

Coca Cola and Mean Joe Green;

Polar bears

Breadth of Line

Category killers can get too big


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Good Differentiators Being First

Most firsts stay first (Coke, Xerox,

Advil

Becomes the generic advantage

Not a guarantee of success & can be

bad idea (smokeless cigarettes)

Attribute ownership

Own what is most important to

customer (Crest)

Leadership

Let everyone know it

Heritage Based on time, location, family,

character


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Good Differentiators

Market specialty Be the expert!

Preference

Can be legitimate, ethical,emulation (fit)

How the product is made

Technology, special ingredient

(DiGiorno Pizza, PapaJohns),handcrafted, packaging

Being the latest

Intel (makes itself obsolete);

ulcer meds; technology Dont solve a nonexistent

problem; must be better; dontmess with tradition

Hotness Tastes, trends, PR


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Repositioning

Changing customers

perception of a brand in

relation to competing brands.

Why do it?

Changing demographics

Declining sales

Changes in social environment


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SUVs

What are the

Differentiators in this

Category?


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Dodge Durango


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Chevy Trailblazer


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Chevy Trailblazer(again)


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GMC Envoy


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Subaru Outback


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Lincoln Navigator


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Lincoln Navigator(again)


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Buick Rendezvous


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Toyota Sequoia


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Toyota Highlander


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Ford Escape

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Segmentation Ch. 9