Topic Six: Identifying customer values

Objectives

• Identifying Market Segments• Choosing Target Markets• Positioning for competitive advantages

Steps in Market Segmentation, Targeting,and Positioning

1. Identifysegmentationvariables andsegment themarket

2. Develop profiles ofresultingsegments

MarketMarketSegmentationSegmentation

3. Evaluateattractivenessof eachsegment

4. Select thetargetsegment(s)

MarketMarketTargetingTargeting

Basic Market-Preference Patterns

((a) Homogeneousa) Homogeneouspreferencespreferences

SweetnessSweetness

Cre

amin

ess

Cre

amin

ess

((c) Clusteredc) Clusteredpreferencespreferences

Cre

amin

ess

Cre

amin

ess

SweetnessSweetness

((b) Diffusedb) Diffusedpreferencespreferences

Cre

amin

ess

Cre

amin

ess

SweetnessSweetness

Market-Segmentation Procedure

• Survey– Motivations– Attitudes– Behavior

• Analysis– Factors– Clusters

• Profiling

Bases for Segmenting Consumer Markets

Occasions, Benefits, Uses, or Attitudes

Behavioral

Geographic

Region, City or MetroSize, Density, Climate Demographic

Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...

Lifestyle or Personality

Psychographic

Bases for Segmenting Business Markets

• Demographic• Operating Variables• Purchasing Approaches• Situational Factors• Personal Characteristics

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

• Segments must be large or profitable enough to serve.

• Segments can be effectively reached and served.

ActionableActionable

• Size, purchasing power, profiles of segments can be measured.

• Segments must respond differently to different marketing mix elements & actions.

• Must be able to attract and serve the segments.

Effective Segmentation

Additional Segmentation Criteria

• Ethical Choice of Market Targets• Segment Interrelationships & Supersegments• Segment-by-Segment Invasion Plans• Intersegment Cooperation

Five Patterns of Target Market Selection

Single-segmentSingle-segmentconcentrationconcentration ProductProduct

specializationspecializationM1 M2 M3

P1

P2

P3

SelectiveSelectivespecializationspecializationM1 M2 M3

P1

P2

P3

M1 M2 M3

Full marketFull marketcoveragecoverage

P1

P2

P3

MarketMarketspecializationspecializationM1 M2 M3

P1

P2

P3

P1

P2

P3

M1 M2 M3

P = ProductP = ProductM = MarketM = Market

Segment-by-SegmentInvasion Plan

Customer GroupsCustomer GroupsTruckersTruckersRailroadsRailroadsAirlinesAirlines

LargeLargecomputerscomputers

Pro

du

ct V

arie

ties

Pro

du

ct V

arie

ties

PersonalPersonalcomputerscomputers

Mid-sizeMid-sizecomputerscomputers

Company BCompany B Company CCompany CCompany ACompany A

Product Differentiation

FormFea-tures

Perfor-mance

QualityConform-

anceQuality

Dura-bility

Relia-bility

Repair-ability

Style Design

DeliveryDelivery

Services Differentiation

OrderingEase

OrderingEase

Maintenance& Repair

Maintenance& Repair

CustomerTraining

CustomerTraining

InstallationInstallation CustomerConsulting

CustomerConsulting

Media Atmosphere

Symbols

Events

Image Differentiation

Differences WorthDifferences WorthEstablishingEstablishing

AffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

Positioning is the act of designing the company’s offering and

image to occupy a distinctive place in the the target market’s

mind.

Perceptual Map

0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2

1.0

0.8

0.6

0.4

0.2

-0.2

-0.4

-0.6

-0.8

MagicMagicMountainMountain

JapaneseDeer Park

BuschBuschGardensGardens

Knott’sKnott’sBerryBerryFarmFarm

LionLionCountryCountrySafariSafari

MarinelandMarinelandof theof thePacificPacific

DisneylandDisneyland

EconomicalEconomical

Fun ridesFun ridesExerciseExercise

FantasyFantasyGood foodGood food

Easy to reachEasy to reach

Educational,Educational,animalsanimals

Little waitingLittle waitingLive showsLive shows