Topic Six Essay

Topic Six Essay Topic Six Essay Market Segmentation, Targeting and Positioning Session 6 7 Segmentation & Targeting LB5202 Marketing Management 1 Learning Outcomes After this session you should be able to: Explain market segmentation and the bases Explain the requirements for effective segmentation: – measurability, accessibility, substantiality, actionability Discuss the process of evaluating and selecting market segments Explain positioning for competitive advantage 7 Segmentation & Targeting LB5202 Marketing Management 2 Three stages of marketing Mass marketing – seller mass produces, mass distributes and mass promotes one product to all buyers. Product-variety marketing – seller produces two or more products that have different features, styles, quality, sizes and so on Target marketing – seller identifies market segments, selects one or more of them, and develops products and marketing mixes tailored to each. 7 Segmentation & Targeting LB5202 Marketing Management 3 Steps in market segmentation, targeting and positioning Kotler, Brown, Burton, Dean & Armstrong (2010, p.204) 7 Segmentation & Targeting LB5202 Marketing Management 4 Three major steps in target marketing Market segmentation dividing a market into distinct groups of buyers with different needs, characteristics or behaviours require separate products or marketing mixes Market targeting evaluating each market segment’s attractiveness selecting one or more of the market segments to enter Market positioning setting the competitive positioning for the product and creating a detailed marketing mix 7 Segmentation & Targeting LB5202 Marketing Management 5 Market segmentation Markets consist of buyers – differ in one or more ways Differ in their wants, resources, locations, buying attitudes and buying practices – buyers have unique needs and wants, each is potentially a separate market – design a separate marketing program for each buyer – sellers face larger numbers of smaller buyers and do not find complete segmentation worthwhile – they look for broad classes of buyers who differ in their product needs or buying responses – grouped into segments that are likely to react similarly 7 Segmentation & Targeting LB5202 Marketing Management 6 Bases for segmenting consumer markets Geographic Demographic dividing a market into different geographical units dividing the market into groups based on variables: – nations, regions, states, municipalities, cities or neighbourhoods – age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality www.bing.com/images/ (accessed 1/6/11) 7 Segmentation & Targeting LB5202 Marketing Management 7 Bases for segmenting consumer markets Age and life-cycle stage Consumer needs and wants change with age, age and life-cycle segmentation divides a market based on age and life-cycle groups Gender: long used in clothing, cosmetics and magazines finance and cars, amongst others www.bing.com/images/ (accessed 1/6/11) 7 Segmentation & Targeting LB5202 Marketing Management 8 Bases for segmenting consumer markets Occupation Income – used in goods and services such as cars, boats, clothing and travel Multivariate demographic Professional Technical Official – Segmentation by combining two or more demographic variables. Sales Low Medium High Income 7 Segmentation & Targeting LB5202 Marketing Management 9 Bases for segmenting consumer markets Psychographic: – buyers segmented on psychological/personality traits, lifestyle or values – people in the same geodemographic group can have different profiles Behavioural: – segmented into groups based on their knowledge of the product, their attitude towards it, the way they use it and their responses to it Benefits sought: – segmented according to the different benefits they seek from the product. 7 Segmentation & Targeting LB5202 Marketing Management 10 Bases for segmentation –