Effective Market Segmentation, Targeting, and Positioning
School
The University of Hong Kong**We aren't endorsed by this school
Course
MKTG 2501
Subject
Marketing
Date
Dec 11, 2024
Pages
6
Uploaded by ColonelGalaxy15929
Market Segmentation, Targeting, and PositioningMarket Segmentation (Divide)●Market Segmentation is the process that companies use todivide the marketsintosmall segments(Assuming the markets is heterogeneous)●Major purpose: Toreach buyersmore efficiently and effectively with market offeringthat match their unique needs●A market segment is a group of people that hascommon consumption needsandsimilar responses to marketing actions●Lifestyle: e.g. veganism, so more restaurants provide vegan optiong●Personality: e.g. adventure seekers → provide hundreds of activities e.g. ice-skating,rock climbing
Requirements for Effective Segmentation●Measureable: The size, purchasing power, and profiles of the market segment (e.g.perceived importance, demographics)can be measured●Accessible: The market segments can beeffectively reachedand served●Differentiable: The market segments are conceptuallydistinguishableandresponddifferentlyto different marketing mix elements and programs●Actionable: Effectivemarketing programs can be designedfor attracting andserving the market segments●Substantial: Tha market segments arelarge or profitableenough to serveMarket Targeting (Choose)●Market segmentation reveals the company’s market segment opportunities●Market Targeting: evaluate the various market segments, decide how many and whichmarket segments the company can serve bestEvaluate Market Segments●Segment size and growth○Smaller vs Larger segments○Growth potential●Segment structural attractiveness○Competition○Substitute products○Power of buyers○Power of suppliers●Company objectives, resources, and costs○Competitive advantage○Availability of resources○Consistent with company objectives
Mass Marketing (Undifferentiated Marketing)●Assume the market is homogenous●Target the whole market with one offer (“one-size-fits-all”)●Same marketing mixfor all buyers (Mass-producing, mass-promoting,mass-distributing with the same product to all consumers)●Focuses oncommon needsrather than what’s different●e.g. Model T Ford car in 1914, Coca-cola in its early yearsDifferentiated Marketing (Segmented Marketing)●Targetseveral different market segments(Goal is to achieve higher sales andstronger position)●Designseparate offersto each segments (More expensive than undifferentiatedmarketing)●e.g. Colgate’s toothpaste products, P&G’s shampoo products●Example: P&G’s shampoo○Head & Shoulder → Segment 1: Dandruff care○Pantene → Segment 2: Silky hair○Vidal Sassoon → Segment 3: Hair setting
Niche Marketing (Concentrated Marketing)●Target asmall share of a large segment (a niche)●Segments are fairly large and normally attract several competitors whereas niches aresmaller and normally attract only one or a few competitors●Good for companies with limited company resources●Companies havegood knowledgeof the niche → canfine-tune the 4Psto meet theneeds of this carefully defined niche●Niching lets smaller companies focus their limited resources on serving niches thatmay be unimportant to or overlooked by larger competitors●e.g. some stores selling unusual tropical fish, Swarovski: crystal ornamentsMicromarketing●Tailor-madeproducts and marketing programs for individual locations or individuals●Local marketing: To tailor-made for specific cities, neighbourhoods, stores○e.g. localization programs for different cities●Individual marketing(also called one-to-one marketing, market-of-one marketing,mass customization): To tailor-made for individual consumers○e.g. M&Ms with personalised message○e.g. Mattel Barbie Doll → Customer 1: Doll wearing Chinese dress, Customer2: Doll with blond hair, Customer 3: Doll which can sing
Differentiation & PositioningCompetitive advantage and Differentiation●A company gainscompetitive advantagewhen it candifferentiateand positionitself byproviding superior customer value●Competitive advantage: an advantage over competitors gained by offering consumersgreater value○either through lower prices or by providing more benefits that justify higherprices●Differentiation: To differentiate the product or brand on the aspects that consumersfind meaningful e.g. higher performance, better serviceProduct / Brand Position●Product / Brand Position: The place the product or brand occupies in consumers’mindsrelative to competing products(Perceptions, impressions, beliefs, feelings)●Perceptual Map(Positioning Map): Show consumer perceptions of a company’sproduct vs competing products on the important buying dimensions (十字)