Session 1-Introduction to Marketing

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Clinton vs Dole:
The Politics of Segmentation
2
Levels of Market Segmentation
Mass Marketing (Shotgun Approach)
• Model T
• Increasing Competition,
• Improved production techniques
• Fragmentation of markets
Segment Marketing
• Information revolution
• Flex and JIT Manufacturing
• Credit-technology
Individual Marketing (Rifle Approach)
• Segments of “one”
• Information technology and addressability
• National Bicycle, McGraw Hill
3
Definition

Segmentation is the process of dividing the market
into groups based upon important consumer
characteristics.

Why Segment?

What is relevant? What properties should segments
have?
4
Why Segment?

Better focus on customer needs

Promotes new product ideas (Dockers, Levis 505 and
900)

Helps develop effective marketing mix strategy
(Dockers --men 25-45 reminiscing baby boomers,
retail merchandising)

Allocation of marketing resources to different
products depending upon segment attractiveness.
5
Properties

With-in group homogeneity but heterogeneity across
groups.

Accessibility

Segment is such that the company can best serve
them vis-vis competition. (Gerber’s and pre-school
kids food).

Economic viability
6
Bases for Segmentation
Geographic

Regionalizing to accommodate local tastes (Maxwell House
stronger flavored in the west).
Demographic:

What consumer characteristics are? (Age, Gender, Income…)
Psychographics:

Why do consumers buy?
» Lifestyle: Hathaway
» Personality Pillsbury Doughboy
» Social Class
7
Bases for Segmentation
Behavioral

Usage occasions
» Kodak single-use cameras from underwater use to baby pictures

Usage Rates
» 80-20 rule, eg., beer drinkers.

Loyalty Status
» Hard-core loyals: A A A A A A
» Switchers: A B E A D B
» Variety Seekers A B C B A C B

Benefit Segmentation

How do you implement psychographic and behavioral
segmentation e.g., for media buying
» key role of demographics
8
Product Positioning


Positioning = Segmentation + Differentiation
Slotting your product in the consumer’s mind.
» Who am I? Why buy me?
“Positioning starts with the product….But Positioning is not what
you do to the product. Positioning is what you do to the mind of
the prospect” - Ries and Trout
The Positioning Statement:
“Product/Brand is
» unique and most important claim
» among all (competitive frame)
» because (support)
9
Positioning Strategies

Against competition
» 7Up the Uncola, Wendy’s Where is the Beef?

Position with the competition
» Exclusive Club Strategy, e.g., the Big Three for followers

Grab an Unoccupied Position

Using your endowment
» Number One Position
10
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