segmentation, positioning and forecasting
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8/3/2019 Segmentation, Positioning and Forecasting
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Segmentation, Positioning andSegmentation, Positioning and
ForecastingForecasting
Prof. Rushen Chahal
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PsychologicalPsychological
SegmentationSegmentation
yy personality characteristicspersonality characteristics definitely influenceconsumer behaviour; but personality is not a veryeffective basis for segmentation
y consumer lifestylelifestyle has become a more widely usedbasis for segmentation, as consumers tend to buyproducts and services that are consistent with theirlifestyles
yy psychographic segmentationpsychographic segmentation employs a varietyof psychological and behavioural descriptors
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PsychographicPsychographic
SegmentationSegmentation
y involves the identification of segments of themarket, based upon differences on a variety of measures
y these include valuesvalues; the principles that guidehow we live our lives, but the relative importanceof which vary across individuals
y other measures often used in psychographic
research include attitudes, opinions, interests, andvarious behavioural measures such as media usageand leisure-time activities
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Relationship SegmentationRelationship Segmentation
y A new approach for defining marketsbased on the kinds of relationships that
customers want with firms: Friendship feeling
Business (arms-length) association
Frequent contact
Less frequent contact
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BehaviouralBehavioural
SegmentationSegmentation
y marketers often segment markets based onhow consumers interact with the product
y different consumers will seek different benefitsbenefits
from a product or service and will associate itwith different occasions
yy benefitsbenefits arise not only from the product butfrom the process of acquiring it
y marketers must determine exactly whatbenefits are important to the customer
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More AboutMore About BehaviouralBehavioural
SegmentationSegmentationy many marketers are now segmenting markets on
the basis of the occasionsoccasions that customers
associate with use of the product
y a widely-used approach to segmentation involvesdividing the market on the basis of usage rates;usage rates;
many marketers target the ́ heavy halfµ (i.e. those
who are heavy users)
y once segments have been identified, profilesprofiles of
segment members should be prepared
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Selecting TargetSelecting Target
MarketsMarketsy target segments should be compatible with the
organization·s goals and image
y the market opportunity represented by the
segment must match the company·s resourcesy the segment must represent an opportunity to
generate enough sales to generate a profit
y the company should select target segments
where it can enjoy a competitive advantage
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TargetTarget MarketMarket
StrategiesStrategiesyy market aggregation:market aggregation: target the product or service
to a mass market with little differentiation
yy singlesingle--segment segmentation:segment segmentation: selecting a single
segment to target; if the segment is small, this maybe considered a ́ niche· strategy
yy multiplemultiple--segment segmentationsegment segmentation: identifying two ormore segments as target markets; involves
developing a different marketing approach foreach
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Implications of Implications of
SegmentationSegmentationy market aggregationaggregation is really a production-
oriented strategy; it requires that the firm findsome way to differentiate its product or service
y
increasingly, firms are turning to superiorserviceservice as their differentiating strategy
yy multiplemultiple--segmentsegment marketing requires that thefirm develop different versions of the product
offering for each segment; or it may simplymean different approaches to serving segments
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yy PositioningPositioning is the image of your brand held by
the public and especially, your segment.
y Usually try to position on attributes consumer
sees as important, such as speed, convenience,
safety.
yy PositioningMapsPositioningMaps help see how key players in a
market are viewed by consumers. Helps to see
competitive clusters and market gaps.
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Positioning for the Market Segment
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Niche MarketingNiche Marketing
y this is a specific form of positioningpositioning
y the company decides to occupy a market nichewhere it can be distinct and competition weak
y
identify segments that are not well servedy determine how to gain a competitive advantage
y expand the niche by meeting consumer needs
y defend the niche position by improving product
and service offerings
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Positioning StrategiesPositioning Strategies
yy Against Competition:Against Competition: ´We·re as good or betterµCola Wars, battery-bashers.
yy Market Gap:Market Gap: Find spot others missed.Nicheproducers make vinyl records.
yy Set Brand ApartSet Brand Apart: Stress your differences and avoidhead-to-head competition. ́ Nothing runs like aDeere.µ
yy Leadership:Leadership: Be the one others follow. Used by
President·s Choice, Sony.yy Lifestyle Segment AppealsLifestyle Segment Appeals: Use lifestyle to define.
Some buy fancy cameras to take creativephotography, others to impress.
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RepositioningRepositioning
This is a variation of a positioningpositioning
strategystrategy that involves changing the
market position of a brand or store inresponse to changes taking place in the
broader market environment.
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The Sales ForecastThe Sales Forecast
A sales forecastsales forecast is an estimate of
probable sales for one company·s brand of
the product during a stated time period ina specific market segment and assuming
the use of a predetermined marketing plan.
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The Sales ForecastThe Sales Forecast
It is based on a specific marketing plan.
It can be expressed in dollars or product units.
It is best prepared after market potential and sales
potential have been estimated. It typically covers a 1-year period.
Marketing goals and broad strategies must beestablished before a sales forecast is made.
Once it is made, it becomes a key controllingfactor in all operational planning throughout thecompany.
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Basic Forecasting ApproachesBasic Forecasting ApproachesTop Down: Develops a forecast of economic conditions and industry trends.
Determines the market potential for a product.
Determines the sales potential for the product.
Measures the share of this market the firm is currently getting orplans to capture.
Forecasts the firm·s sales of the product.
Bottom Up:
Generates estimates of future demand from customers or the
company·s salespeople. Combines the estimates to get a total forecast.
Adjusts the forecast based on managerial insights into theindustry, competition, and general economic trends.
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Demand Forecasting:Demand Forecasting:
Key TermsKey Termsyy Market factor/index:Market factor/index: Something that is related to the
product you sell -- new home starts and appliances.
yy Market potential:Market potential:Total volume by all firms in market.
yy
Sales PotentialSales Potential:Y
our piece of market = your share.yy Sales Forecast:Sales Forecast: Estimated sales during defined period
assuming certain marketing plan and environment.
y The forecast allows firms to estimate future revenuesand becomes an important part of the planning process.
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Demand ForecastingDemand Forecasting
MethodsMethodsyy MarketMarket--factor analysisfactor analysis: Demand for a product is
assumed to be related to the factor-- housing starts andappliances.
Direct Derivation:Direct Derivation: See what determines sales-- roofing firms
look for 15-year-old houses for business. Correlation Analysis:Correlation Analysis: Statistical analysis that shows two things
are linked-- perhaps pets in an area and dog food sales.
yy Survey of buyer intentions:Survey of buyer intentions:A sample of current or
potential customers are asked how much of a particularproduct they would buy at a given price during aspecified future time period.
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More Forecasting More Forecasting
MethodsMethodsyy Test marketing:Test marketing: A firm markets its product in a limited
geographic area, measures sales, and then projects thesales over a larger area.
yy Past sales and trend analysis:Past sales and trend analysis: A flat percentage increase
is applied to the volume achieved last year or to theaverage volume of the past few years. Trend analysismore sophisticated, uses more statistical analysis.
yy Salesforce composite:Salesforce composite: A bottom-up method consisting
of collecting estimates of sales for the future periodfrom all salespeople.
yy Executive judgement:Executive judgement: Obtaining opinions regardingfuture sales volume from one or more executives.
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