Identifying Market Segments and Targets The Three Major

Identifying Market Segments and Targets

The Three Major Steps in Target Marketing

Patterns of Consumer Preference l l l Homogeneous preferences Diffused preferences – Hotelling’s model Clustered preferences l l l Position in the center (undifferentiated marketing) Position in the largest market segment (Concentrated marketing) Differentiated marketing

Levels of Market Segmentation l l Undifferentiated marketing (mass marketing) Differentiated marketing (segment marketing) Concentrated marketing (niche marketing) Micromarkteting (Individual marketing)

Mass Marketing (大量行銷) l l Mass production, mass distribution, and mass promotion of one product for all buyers. E. g. Ford’s Model-T; Coca-Cola’s 6. 5 -ounce bottle; 綠油精.

Mass Marketing l Pros l l l Create the largest potential market Lowest cost → lower price and higher margin Cons l l The increasing splintering of the market The proliferation of advertising and distribution channel

Megamarketing (巨行銷) l l l Megamarketing is the strategic coordination of economic, psychological, political, and public relations skills, to gain the cooperation of a number of parties in order to enter or operate in a given market. 4 Ps + 2 Ps (politics & public opinions) Examples: Pepsi. Co in India, Harley-Davidson.

Segment Marketing l l Market segment: a group of customers who share a similar set of wants. The marketer’s task: identify (NOT create) the segments and decide which one(s) to target.

Estee Lauder l l l Junior League → older consumers Clinique → middle-aged woman M. A. C → youthful hipsters Aveda → aromatherapy enthusiasts Origins → eco-conscious consumers who want cosmetics made from natural ingredients. Jane by Sassaby → teens

Segment Marketing l Pros l l l More fine-tuned product or service and appropriate price More easily select the best distribution and communications channel Clear picture of the competitors

Niche Marketing l l Niche: a more narrowly defined group seeking a distinctive mix of benefits. E. g. Oshkosh Truck → airport rescue trucks & front-loading concrete mixers (largest); Tetra → tropical fish food (80%); Steiner Optical → military binoculars (80%).

Niche Marketing l l Many companies start as nichers to get a foothold, e. g. Southwest Airlines, 美國人壽一定 保. The Internet facilitates the niche marketing, e. g. Ostrichonline. Determine the attractiveness of a niche: distinctness of need, premium, competitors, specialization, size, profit and growth potential. Niche marketing involves higher-than-normal risks.

The Long Tail

The Long Tail

The Long Tail

The Long Tail

Individual Marketing l l l The ultimate level of segmentation Mass customization, e. g. 台新銀行imake卡. Flexible market offering l l l Naked solution & Discretionary options E. g. Champion Enterprise 結合「組合屋」與「 地建商」之優勢。 Choiceboard, e. g. Paris Miki; De Beers; National Bicycle → 11, 232, 862 types; 個性簽 名襪.

Is mass marketing dead? Take a position: Mass marketing is dead versus Mass marketing is still a viable way to build a profitable brand.

Joint Strike Fighter (JSF)

Market Targeting l Single-segment concentration l l E. g. Porsche, 一陽旅行社. Selective specialization l E. g. 金門酒廠入主遠東航空.

Market Targeting l Product specialization l l Market specialization l l E. g. 蔡司. E. g. Amazon, LV, 地方性 3 C產品經銷商. Full market coverage l E. g. Panasonic, ASUS.

Segment-by-Segment Invasion Plan

Segment-by-Segment Invasion Plan l l Pepsi: grocery market → vending machine market → fast-food market Toyota: small cars (Tercel, Corolla) → midsize cars (Camry, Avalon) → luxury cars (Lexus)。

The Incumbent’s Advantage 哈佛商業評論 全球繁體中文版 (October 2008)

The Incumbent’s Advantage 哈佛商業評論 全球繁體中文版 (October 2008)

The Incumbent’s Advantage 哈佛商業評論 全球繁體中文版 (October 2008)

The Incumbent’s Advantage 哈佛商業評論 全球繁體中文版 (October 2008)