MKT 300 - Section 2 Professor Eaton PDF

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MKT 300 - Section 2 - Segmenting, Targeting, and PositioningObjectives: Thoroughly explain the STP process. Compare and contrast the four different segmentation bases (Demographic, Psychographic, Behavioral and Needs). Explain the pros and cons of the four primary targeting strategies (Undifferentia...

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MKT 300 - Section 2 - Segmenting, Targeting, and Positioning Objectives: - Thoroughly explain the STP process. - Compare and contrast the four different segmentation bases (Demographic, Psychographic, Behavioral and Needs). - Explain the pros and cons of the four primary targeting strategies (Undifferentiated, Differentiated, Concentrated, Micromarketing). - Describe the value proposition, and positioning statement concepts. - Explain the perception-related concepts of perceptual mapping, repositioning, Weber’s Law, the Zeigernik effect and repositioning. Marketing strategy and marketing tactics are both a part of branding. What is a Market? A group of people seeking products in a specific product category. Importance of Market Segmentation Markets have a variety of product needs and preferences. A market segment has specific needs and wants as well as the ability and willingness to buy. Marketers can better define customer needs. It is all about competitive advantage. STP Marketing Segmenting - Divide market based on needs/benefits, demographics, lifestyles, behavioral measures. Targeting - Select most appropriate markets. Positioning - Target marketing messages through 4P’s. Segmenting Identifying a group of customers in your market who share a similar set of needs and wants. Segmentation bases 1. Demographics Segmentation - Age, gender, family size, family life cycle, occupation, ethnicity, gender, income. 2. Psychographics Segmentation - Values, lifestyle, personality, activities, interests, opinions (AIO). These better individualize a person. Values and lifestyles (VALS) mean

that your choices are influenced by specific principles (specific examples below in red aren’t on test). Ideals orientation - These are your thinkers and believers. Achievement orientation - These are achievers and strivers. Status symbols. Self-expression orientation - These are experiencers and makers. The extremes are innovators and survivors *Remember the 3 orientations* 3. Behavioral Segmentation - Dividing a market by the amount of product bought or consumed. “Usage rate”. 80/20 principle - 20% of all consumers generate 80% of the demand. 4. Needs Segmentation - The process of grouping customers into market segments according to the benefits they seek from the product. “Specifically addressing whitening teeth” etc. Targeting The process of evaluating the various segments and then selecting the most viable segment(s) who share a similar set of needs and wants. Four Targeting Strategies 1. Undifferentiated - Marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix (one size fits all). Advantages include Potential savings on production and marketing costs. Disadvantages include Unimaginative product offerings and the company being more susceptible to competition. 2. Differentiated - A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each. Advantages include greater financial success and economies of scale (increased business success by growing the company). Disadvantages include high costs and cannibalization (eating one’s own profits). This happens when you have so many products that they don’t bring in new customers/consumers. 3. Concentrated - A concentrated strategy of focusing on a narrow market is sometimes more profitable than spreading resources over several different segments. Advantages include concentration of resources, meets a narrowly defined segment, small firms can compete and strong positioning. Disadvantages include segments being too small or changing and large competitors marketing to a niche segment.

4. Micromarketing - One-to-one marketing which is individualized, information intensive, with a long-term perspective and goal of increasing customer loyalty. One size fits all marketing is no longer effective as direct and personal marketing will grow to meet needs of busy consumers. Customers will be loyal to companies that earn their loyalty. Mass media will decline as technology allows customer tracking. Goal is to increase share of customers. Select a Target Market - Do customers’ needs differ enough to warrant the use of market segmentation? - In which market segment(s) should the firm participate? - Does the firm have the resources and skills to compete effectively in the target market? - What is the long-term growth potential of the market segment? Align firms core competencies to target selection. What is your competitive advantage? Does it have applications in a wide variety of markets? Is it difficult for your competitors to imitate? Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. Value Proposition - The brand’s full mix of benefits on which a brand is differentiated and positioned. - Answers the question of “Why should I buy your brand?” - Value is a relationship between price and quality - More quality for more/same/less price - The same quality for a lower price - Less quality for a much lower price * Do you have a unique selling proposition? What do you do differently? * Perceptual Mapping A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds (college innovation vs mascot example). Positioning Statement For [Target Market], the [Brand] is the [Point of Differentiation] among all [Frame of Reference] because [Reason to Believe].

The point of differentiation (POD) describes how your brand or product benefits customers in ways that set you apart from your competitors. The frame of reference is the segment or category in which your company competes The reason to believe is a statement providing compelling evidence and reasons why customers in your target market can have confidence in your differentiation claims. Amazon’s 2001 Positioning Statement For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection. Repositioning Changing consumer’s perceptions of a brand in relation to competing brands. Perception - Weber’s law is the stronger the initial stimulus, the greater the added intensity needed to perceive a difference ($10 off a Rolex). - Differential threshold - Just noticeable difference. Perceptual Organization - Figure and ground - Grouping (Jeep and the rugged outdoors) - Closure - Zeigernik effect - A person beginning a task needs to complete it - When one is prevented from doing so, a state of tension that manifests itself in improved memory for the incomplete task. Switching the slide before students finish copying it down....