Segmentation, Target Marketing and Positioning

Segmentation, Target Marketing and Positioning

1. Market Segmentation

   • Identifying individuals or organisations with similar characteristics that have significant implications for the determination of marketing strategy
     • It involves identifying diverse market into a number of smaller, more similar sub markets, with the objective of meeting the requirements of the groups to supply a product effectively and efficiently

2. Segmenting Consumer Markets

   • 1. Behavioural
     • Behavioural variables such as benefits sought from the product and buying patterns may be considered the ultimate basis for segmentation
       • 1. Benefits Sought: Applied when people in a market seek different benefits from a product
         • Provides an understanding as to why people buy in a market and can aid the identification of opportunities
       • 2.Purchase Occasion: Different occasions can provide targeting opportunities, however they also bring difficulties (i.e regarding price sensitivity during Christmas, if a products price is too low it may not be deemed as a gift option)
       • 3. Purchase Behaviour: Innovators: More likely to purchase a product soon as its launched. Solus Buying: Are brand loyal, buying only one brand in a product group. Brand Switching
         • Knowing the type of person (i.e age, media habits, socio-economic group) company can channel persuasive communication to defend this segment. Knowing the characteristics/shopping habits if the offer seekers sales promotions can be targeted correctly.
       • 4. Usage:
         • Customers can be segmented on the basis of heavy users, light users and non-users. The profiling of heavy users makes them receive the most marketing attention on the assumption of creating brand loyalty.
           • Heavy users can deliver the benefit of volume of potential sales. Analysing the light users segment can provide insights that can deliver advantages of competition
       • 5.Perceptions, Attitudes, Beliefs and Values
         • Consumers grouped by identifying those who view the product in a similar way (PERCEPTUAL segmentation) and have similar beliefs (BELIEF segmentation)
           • Value segmentation is based on principles and standards that people use to judge what is important in life. Values form the basis of attitudes and lifestyles, in turn manifesting behaviour
   • 2. Psychographic
     • Psychographic variables used when researchers believe that purchasing behaviour is correlated with personality/lifestyle of consumers: consumers with varying personalities/lifestyles have varying product preferences and may respond differently to marketing mix offerings.
       • 1. Lifestyle
         • Way of living is reflected in activities, interests and opinions. Inc trendsetters, conservatives and sophisticates
           • 2. Personality
             • I.e Extroverts-Introverts. Buyer and brand personalities are likely to match where brand choice is a direct reflection of personal values and mostly self-expression
   • 3. Profile Variables
     • Finding the differences from psychographic variables, marketer can then describe the groups who exhibits them
       • 1. Demographic Variables: Age, Gender and Life-Cycle Stages
         • 2. Socio-Economic Variables: Social class, terminal education age and income
           • 3. Geographic Variables:

3. Customised Marketing: The requirements of individual customers are unique and their purchasing power sufficient to make designing a separate marketing mix for each customer

4. Positioning : Is the choice of target market (where we want to be), differential advantage (how we wish to compete). Should be considered in conjunction with customer needs.

   • Objective is to create and maintain distinctive place in the market for a company and its products. Target market has partially accomplished positioning, however, consumer must be given something better than competitors. Can be done through DIFFERENTIAL ADVANTAGE
     • Positioning relies on these 4 factors:
       • Clarity: positioning idea is clear in terms of both target market and differential advantage and should be clear/memorable
         • Consistency: consistent message is required particularly if its simple
           • Credibility: Differential advantage chosen must be credible in minds of target customers
             • Competitiveness: DA should have a competitive edge, it should offer something of value to the customer that the competition is failing to supply