Market segmentation and positioning
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Market segmentation and positioning Angelika Brix Bartosz Konior Stephan Richter November 2006 Overview: z Market segmentation z Consumer Markets z Organizational Markets z Evaluation of segments z Target Market z Positioning and Repositioning (c) Brix, Konior, Richter 2 What is Market segmentation? „...the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategies.“¹ (c) Brix, Konior, Richter ¹ soucre: Jobber, p.210 3 What is Market segmentation? „Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. ...to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.“² (c) Brix, Konior, Richter ² source: Wikipedia 4 Benefits from market segmentation Target market selection Market segmentation Differentiation Tailored marketing mix Opportunities and threats (c) Brix, Konior, Richter Source: Jobber, D. "Principles and practice of marketing" 5 Benefits from market segmentation Target market selection Tailored marketing mix Chosen segment of market Grouping of customers Similar characteristics of customer Tailoring marketing mix package Single marketing mix strategy Implementation of the marketing concept (c) Brix, Konior, Richter 6 Benefits from market segmentation Differentiation Opportunities and threats Dividing into sub-segments Rarely static markets => new segments emerge Target more than one segment Chance of being the first Differentiate its offering Threat of faster competitors 7 (c) Brix, Konior, Richter The process of market segmentation and target marketing The disaggregated market The segmented market 1 c1 c3 c2 c4 c6 c5 c7 c8 The characteristics of individual customers are understood (c) Brix, Konior, Richter 2 c1 The target market 3 c3 c1 c5 c2 c4 c5 c2 c7 c6 c8 c7 c6 Customers are grouped into segments on the basis of having similar characteristics Source: Jobber, D. "Principles and practice of marketing" Marketing mix targeted at segment 3 c3 c4 c8 Segment 3 is judged to be most attractive and a marketing mix strategy is designed for that target market 8 The process of market segmentation and target marketing - example The disaggregated market 9 (c) Brix, Konior, Richter The process of market segmentation and target marketing - example The segmented market according to type of buyer Sport & image (c) Brix, Konior, Richter Convenience & security Adventure 10 The process of market segmentation and target marketing - example The target market Sport & image Convenience & security Adventure This segment is judged to be most attractive 11 (c) Brix, Konior, Richter Segmenting markets Market segmentation Consumer segmentation (c) Brix, Konior, Richter Organizational segmentation 12 Segmenting consumer markets Behavioural Benefits sought Purchase occasion Consumer segmentation Psychographic Purchase behaviour Usage Profile Perception and beliefs 13 (c) Brix, Konior, Richter Segmenting consumer markets ¾Benefits sought Functionality Pleasure Image Display with Sapphire Crystal screen Simple 1.3 megapixel camera Lack of sophisticated features High quality video streaming with sound Active TFT display Convenient Stainless steel keys with jewelled bearings Bluetooth, USB High price XHTML browsing and email over TCP/IP MP3 player and FM radio ... (c) Brix, Konior, Richter Source: www.nokia.com; www.vertu.com 14 Segmenting consumer markets Behavioural Lifestyle Consumer segmentation Psychographic Personality Profile 15 (c) Brix, Konior, Richter Segmenting consumer markets Behavioural Consumer segmentation Psychographic Demographic Socioeconomic Profile Geographic (c) Brix, Konior, Richter 16 Segmenting organizational markets Macrosegmentation Organizational size Industry Geographic location Organisational segmentation Microsegmentation 17 (c) Brix, Konior, Richter Segmenting organizational markets Macrosegmentation Choice Criteria Decision-making unit structure Decision-making Process Organisational segmentation Buy class Purchasing organization Microsegmentation (c) Brix, Konior, Richter Organizational innovativeness 18 Evaluating market segments Market attractiveness Political, social and environmental factors Market factors segment size segment growth rate segment profitability price sensitive Competitive factors nature of competition new entrants political issues social trends environmental issues competitive differentiation bargaining power of customers bargaining power of suppliers barriers to market segment entry barriers to market segment exit 19 (c) Brix, Konior, Richter Company’s capability to compete Exploitable marketing assets Managerial capability and commitment Capability to compete Cost advantages Technological edge (c) Brix, Konior, Richter Source: Jobber, D. "Principles and practice of marketing" 20 Target marketing strategies Undifferentiated marketing Marketing mix Whole market Differentiated marketing Marketing mix 1 Segment 1 Marketing mix 2 Segment 2 Marketing mix 3 Segment 3 Focused marketing Marketing mix Customized marketing Marketing mix 1 Customer 1 Marketing mix 2 Customer 2 Marketing mix 3 Customer 3 Source: Jobber, D. "Principles and practice of marketing" (c) Brix, Konior, Richter 21 Positioning Key issues of positioning z Market segmentation z Target market Where we want to compete? z Differential advantage How we wish to compete? (c) Brix, Konior, Richter 22 Successful positioning Clarity Successful positioning Credibility Consistency Competitiveness (c) Brix, Konior, Richter Source: Jobber, D. "Principles and practice of marketing" 23 Perceptual mapping High price z z Identify a set of competing brands A B Identify important attributes C D z Conduct quantitative marketing research z Plot brands on a twodimensional maps Wide product range Narrow product range G F X E Low price (c) Brix, Konior, Richter Source: Jobber, D. "Principles and practice of marketing" 24 Repositioning strategies Product Target market Same Different Same Image repositioning Product repositioning Different Intangible repositioning Tangible repositioning (c) Brix, Konior, Richter Source: Jobber, D. "Principles and practice of marketing" 25 References: 1 David Jobber, Principles and Practice of Marketing, 4th Edition, page 210 2 Wikipedia, http://en.wikipedia.org/wiki/Market_segmentation 3 Nokia, http://www.nokia.co.uk/nokia/0,,71691,00.html 4 Vertu, http://www.vertu.com/ (c) Brix, Konior, Richter 26 Market segmentation and positioning Thank you for your attention! Angelika Brix Bartosz Konior Stephan Richter (c) Brix, Konior, Richter 27
