Marketing

Prof. Alon Rozen ENPC School of International Management Fundamentals of Marketing Winter 2009 Segmentation, Targeting, and Positioning  Market segmentation: dividing a market into distinct groups with distinct needs, characteristics, or behaviors, who might require separate products or marketing mixes Target marketing: choosing which group(s) to appeal to Market positioning: creating a clear, distinctive, and desirable position in the target consumer’s mind, relative to competition   Prof. Alon Rozen / Fundamentals of Marketing 2 Market Segmentation (B2C)  The process of identifying distinct groups of consumers whose purchasing behavior differs from other groups in important ways  Geographics  Demographics  Psychographics (aka IAO variables - Interests, Attitudes and Opinions)  Behavioral segmentation  Socio-cultural  …  Firms adjust their marketing mix to meet the particular needs of different market segments Prof. Alon Rozen / Fundamentals of Marketing 3 Geographic segmentation Catchment zones Example: 1st Paris Est 2nd Paris Intra muros 1st 2nd 3rd 3rd Ile-de-France Prof. Alon Rozen / Fundamentals of Marketing 4 Market Segments (examples)  Example segment categories:  Age-based: babies, toddlers, kids, teens, young adults, adults,     seniors, boomers, generation X, Millenials, generation Z Price-based: hard discount, discount, economy or value, midmarket, upper-middle, high-end, luxury, super luxury… Socio-economic criteria: NYLONs, Yuppies (BCBG), DINKs, … Lifestyle-based: BoBos, Grups, tweeners, silvers, athletes, weekend sportsman, social drinkers, smokers, students, … Behavior-based: gamers, Soccer Moms, Denim Dads (men who choose family over work); Karma Queens (women who appreciate material pleasures but are in harmony with the universe); Innerpreneurs (managers of their own brand who find inspiration within themselves), on-line shoppers, early adopters, zappers, … Prof. Alon Rozen / Fundamentals of Marketing 5 Market Segments – wine market example Prof. Alon Rozen / Fundamentals of Marketing 6 Segmenting Business Markets (B2B)    Geographic segmentation Demographic segmentation  Industry, company size, location Operational characteristics  Technology, usage status, customer capabilities    Purchasing approaches  Direct, hub, RFP, RFQ, international bids, bid frequency Situational factors  Urgency, specific application, size of order Personal characteristics  Buyer-seller similarity, attitudes toward risk, loyalty Prof. Alon Rozen / Fundamentals of Marketing 7 Segmenting Business Markets (B2B) Prof. Alon Rozen / Fundamentals of Marketing 8 Segmenting International Markets    Geographic segmentation  Location or region (EU, USA, South America, EMEA, Asia, BRICs) Economic factors  Population income or level of economic development Political and legal factors  Type/stability of government, monetary regulations, amount of bureaucracy, etc.  Cultural factors  Language, religion, values, attitudes, customs, behavioral patterns Prof. Alon Rozen / Fundamentals of Marketing 9 Effective segmentation: MASDA      Measurable  Size, purchasing power, and profile of segment Accessible  Can be reached and served Substantial  Large and profitable enough to serve Differentiable  Respond differently Actionable  Effective programs can be developed Prof. Alon Rozen / Fundamentals of Marketing 10 Scenarios, profiles, avatars  Marketers increasingly using:  Scenarios  Profiles  Avatars Prof. Alon Rozen / Fundamentals of Marketing 11 Target Marketing Strategies  Undifferentiated (mass) marketing:  Market coverage strategy that ignores differences and targets the whole market with one offer  Differentiated (segmented) marketing:  Market coverage strategy that targets several market segments and designs separate offers for each  Concentrated (niche) marketing:  Market coverage strategy in which a company pursues a large share of one or a few submarkets  Micromarketing:  The practice of tailoring products and marketing programs to the needs/wants of specific individuals and local customer groups  Includes: local marketing and individual marketing 12 Prof. Alon Rozen / Fundamentals of Marketing Positioning  The way the product is defined by consumers on important attributes (ex. Leader Price)  Or, the place the product occupies in consumers’ minds relative to competing products (ex. iPod) Involves implanting the brand’s unique benefits and differentiation in the customer mind (Coca Cola) Perceptual positioning maps show perceptions of brands on important buying dimensions   Prof. Alon Rozen / Fundamentals of Marketing 13 Perceptual positioning maps Classy BMW Porsche Cadillac Mercedes Lincoln Chrysler Peugeot Renault Conservative Citroen Sporty Ford Toyota VW Nissan Practical Prof. Alon Rozen / Fundamentals of Marketing 14 Overall Positioning Strategies  Value propositions represent the full positioning of the brand as compared to competitors  Generic ‘overall’ value propositions:  More for more  More for the same  More for less  The same for less  Less for (much) less Prof. Alon Rozen / Fundamentals of Marketing 15 Typical Market Positions  Positions and price points are usually ‘confused’:  Luxury or High-end  Mass market  Low-end or Value or Economy  Discount or Hard discount  Question: what is Colgate’s toothpaste market position' Prof. Alon Rozen / Fundamentals of Marketing 16