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• Segmentation, Targeting and Market Positioning
• Developing new products
• Brand Management
• Managing products over the lifecycle

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Know how both B2B and consumer markets can be broken down into smaller, more manageable groups of similar customers.
Understand the effects on the marketing mix of pursuing specific segments. – 4 Ps
Understand the potential benefits and risks of segmentation.
Review New Product Development and the
Product Lifecycle
Understand why branding is important for product success

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Segmentation is the art of discerning and defining meaningful differences between groups of customers to form the foundations of a more focused marketing effort.
Mass Market
Niche
MicroMarkets The individual
Segmentation Continuum

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Market segmentation is the top down process of grouping customers in markets with some similarities into smaller, more homogenous segments. But what are the benefits of segmentation?
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 better customer analysis and service; better competitor analysis;
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 more effective resource allocation; better strategic marketing planning.
What market segment is Red Bull aimed at? See Pg
197 book – they knew their customers before designing marketing mix – what if you get it wrong?

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Identify subgroups within the whole market that share common general characteristics (macro segments).
Select target segments from macro segments based on differences in specific buying characteristics (micro segments).

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Macro
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Size
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Location
Usage rate
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Micro
Product
Applications
Technology
Purchasing and decision-making
 processes
Buyer-seller relationships

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Consumer Segmentation Bases
6. Multi-variable
1. Geographic
3.
Geo-demographic
5. Behaviour
2. Demographic
4. Psychographic

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Similar to B2B segmentation, except:
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Consumer segments tend to be larger;
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More difficult to get close to buyer;
More emphasis on lifestyle and context.
1. Geographic Segmentation
Example: Instant Hot Chocolate
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
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Ideal for UK market (homes equipped with kettles, nice bedtime drink, or substitute for tea.
Less good for French market (kettles uncommon, norm of making hot chocolate is with milk rather than with water).
Wine Sales – North or South of England?

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On the basis of:
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Age
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Gender
Race
Income
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Occupation
Social status
Family structure
Also:
3. Geo-demographic Segmentation exists. It combines geographic and demographic analysis. Example – targetting teenagers in a specific location

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This is Lifestyle segmentation
Categories are:
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Activities
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Interests
Opinions
Demographics
Example: Quorn targets vegetarians with meat substitutes
The Green Movement

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To define a target market;
To create a new view of the market;
To position the product;
To better communicate product attributes;
To develop overall strategy;
To market social and political issues.

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On the basis of:
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End use
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Benefits sought
Usage rate
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Loyalty
Attitude
Buyer readiness
Example. Usage
Segmentation in the
Soup Market:
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Dinner party starter
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Warming snack
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Meal replacement
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Recipe ingredient
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Easy office lunch

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It is unlikely that any one segmentation variable will be used absolutely on its own.
It is more common to use a multivariable segmentation approach.
This includes defining a portfolio of relevant segmentation variables depending on the market in question.
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What would you suggest for garden centres and /or golf courses?

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Advantages & Disadvantages of Segmentation
1.
2.
3.
4.
5.
6.
Defines the market for further analysis
Allows creation of a customised marketing mix
Aids in assessing potential demand
Aids in identifying competitors
Aids in positioning
Aids in identifying opportunities
1.
2.
3.
4.
5.
6.
7.
Increased costs
Increased number of products
False segmentation
Collecting & storing personal data may violate privacy
May decrease brand loyalty
Some practices considered unethical
Danger of Stereotyping

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P
L e
E
X
A
M
Principles of Marketing and Best Practice (2005) Czionkta et al

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After segmenting your market, you will have to decide which and how many segments should be targeted.
Undifferentiated
Targeting
Differentiated
Targeting
Three main Targeting Strategies
Concentrated
Targeting

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Marketing mix The market
To have the same marketing mix for the whole mass market, e.g. washing powder.

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Marketing mix 1
Marketing mix 2
Marketing mix 3
Segment 1
Segment 2
Segment 3
To have a different marketing mix for each of the key customer segments that have been identified, e.g. Cadbury
(immediate eat, home stock, kids, gifts, Easter, Christmas).

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Marketing mix 2 Segment 2
One marketing mix is developed & directed toward only one very profitable market segment.
Suitable small company with limited resources: smarthomes.ie

Important Criteria for Successful
Segmentation
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Distinctiveness
Tangibility
Accessibility
Does the segment exist over time and can money be made
Can you reach it within budget?
Defendability
Will competition react?
Only if those factors can be satisfied, it is worthwhile to pursue a different segment.

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Age of the product
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General Company Profitability
Market share vis-à-vis competitors
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The competition itself
The product itself
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The general market
This reminds us of the importance to monitor continuously the Macro- and Micro-
Business Environment.

Example: Positioning - Computers
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Which consumer segment buys which type of computer?

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Positioning Strategies
•
•
•
•
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On the basis of:
Specific features
Specific usage occasions
Specific user groups
Head to head with key competition
Service superiority
•
Note: that you might have to engage in repositioning your product regularly.

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Remember what a Product is!
- A car isn’t just a mode of transport…it’s a lifestyle choice
- A restaurant isn’t just a place to visit if you’re hungry…why can some restaurants get away with charging so much?

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Convenience Goods
– unplanned
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Shopping Goods
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Speciality Goods
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Unsought Goods
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Business Products

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Follows a Framework
Product Line
Strategy
Product
Strategy
Knowledge
Feasibility
Identify
Consumer needs
Generate
Ideas
Postdevelopment
Review
Maintenance Commercialization
Source: Czinkota et al. Marketing Best Practices, pg.253
Concept Study
• Generation
• Screening
• Business Case
Development
• Specifications
• Prototype
• Product Test
• Manufacturing
Development
• Pilot Production

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1.
2.
3.
4.
5.
6.
7.
8.
Idea Generation
Screening
Concept Development & Testing
Marketing Strategy Development
Business Analysis
Product Development
Test Marketing
Commercialisation

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Attributes that make up a brand can be real or illusory, rational or emotional, tangible or intangible
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A brand is a word or group of letters which can be vocalised (3M, U2)
The symbol or design is the brand mark
Can you think of any examples of brands that have been abused by copycat companies?

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Good brandname, trademark or logo has 4 important characteristics.
1. Attract Attention
2. Be memorable
3. Help communicate the positioning of the product
4. Distinguish the product from competing brands
Good brand should also develop brand equity (a monetary value that can be put on the brand)

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Individual vs.
Family Branding
Individual – Lever
Brothers:
Family - Coke
Note: Increasing success of retailers’ own brand. Now over 5% of Irish grocery market and growing.

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Managing Products over the lifecycle
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Already touched on this in previous lectures – Page 264 of book
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Introduction, Growth, Maturity &
Decline

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How do customers react at different lifecycle stages?
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Innovators: - 2.5% tend to be younger & higher in social status and better educated – iPhone??
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Early Adopters: 13.5% of potential adopters, enjoy the prestige & respect of owning new product
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Early Majority: 34% seek the opinions of the aforementioned and spend time deciding whether to try or not
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Late Majority: 34% is less cosmopolitan and responive to change than any of the previous
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Laggards: 16% - laggards tend to be older, conservative, low socioeconomic status and suspicious of change.

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Marketing Management