Marketing An Introduction An Asian Perspective Armstrong Kotler

Marketing : An Introduction An Asian Perspective Armstrong, Kotler & da Silva 6 Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -1

ROAD MAP: Previewing the Concepts • Define three steps of target marketing: market segmentation, market targeting, and market positioning. • List and discuss the major bases for segmenting consumer and business markets. • Explain how companies identify attractive market segments and choose a target marketing strategy. • Discuss how companies position their products for maximum competitive advantage in the marketplace. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -2

© Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -3

P&G Detergents © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -4

P&G Shampoo © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -5

Opening Case – Procter & Gamble Strategy • Sells multiple brands within the same product category for detergents, soaps, and other goods. • Laundry detergents ( TIDE, CHEER, GAIN etc. ) • Shampoo ( Pantene, Head & Shoulders, Aussie, Herbal Essences etc. ) • Deodorant ( Secret, Sure, Old Spice) • Each brand features a different mix of benefits and appeals to a different segment. • Tide provides “ fabric cleaning and care at its best”. It’s the all purpose family detergent that “helps • Product modifications appeal to different niches within certain segments. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -6

The result • P&G generates revenues in excessive of $4 billion in U. S. laundry detergent market alone. • Tide has 34% share of powder and 24% share of liquid market segments. • Combined, all P&G brands account for 75% share of powder and 55% share of liquid detergent markets. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -7

Market Segmentation • The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs. • A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 2 -8

Target Marketing • Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. • Target segments that can sustain profitability. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 2 -9

Market Positioning • Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers • Setting the competitive positioning for the product and creating a detailed marketing mix © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 2 -10

Steps in Market Segmentation, Targeting, and Positioning Figure 6. 1 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -11

Segmentation types: 1. Geographic segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Behavioral segmentation 5. Benefits sought © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -12

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Geographic Segmentation • Geographic segmentation calls for dividing the market into different geographical units such as nations, cities, or even neighborhoods. – A company may decide to operate in one or few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants. – Many companies today are localizing their products, advertising, promotion and sales efforts to fit the needs of individual regions, cities. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -14

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Demographic Segmentation • • • Income Population Age distribution Gender Education Occupation What are the trends? 7 -16 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Demographic segmentation © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 2 -17

Demographic Segmentation • Demographic factors are the most popular bases for segmenting customer groups. • One reason is that customer needs, wants and demands often vary closely with demographic variables. • Another is that demographic variables are easier to measure than most other types of variables. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -18

THAILAND-Demographic facts Nationality: --Thai. 
 Population (2009 est. ): 67. 0 million. 
 Labor force (2009 est. ): 38. 4 million. 
 Annual population growth rate (2009 est. ): 0. 5%. 
 Ethnic groups: Thai 89%, other 11%. 
 Religions: Buddhist 93%-94%, Muslim 5%-6%, Christian 1%, Hindu, Brahmin, other. 
 Languages: Thai (official language) 
 Education: Years compulsory--9. Literacy--94. 9% male, 90. 5% female. 
 Life expectancy--70. 51 years male, 75. 27 years female. © 2011 Pearson Education, Inc. publishing as Prentice Hall 7 -19

Age Segmentation • Global Teens–young people between the ages of 12 and 19 – A group of teenagers randomly chosen from different parts of the world will share many of the same tastes • Global Elite–affluent Elite consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity 7 -20 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Gender Segmentation • In focusing on the needs and wants of one gender, do not miss opportunities to serve the other • Companies may offer product lines for both genders – Nike, Levi Strauss 7 -21 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Income based segmentation • Income segmentation is dividing a market into different income groups. – Identifies and targets the affluent for luxury goods. – People with low annual incomes can be a lucrative market. – Some manufacturers have different grades of products for different markets. 7 -22 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Unilever-Soaps • Lower income- Life buoy, Lyril etc. • Middle income- LUX • Higher income - DOVE 7 -23 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Psychographic segmentation • Psychographic segmentation divides buyers into different groups based on social class, lifestyle, and personality characteristics. • People in the same demographic group can have very different psychographic makeup. • Following are the main bases of psychographic segmentation – Social class – Lifestyle – Personality © 2011 Pearson Education, Inc. publishing as Prentice Hall 7 -24

Psychographic Segmentation • Grouping people according to attitudes, values, and lifestyles Porsche example from SRI International – – – Top Guns (27%): Ambition, power, control Elitists (24%): Old money, car is just a car Proud Patrons (23%): Car is reward for hard work Bon Vivants (17%): Car is for excitement, adventure Fantasists (9%): Car is form of escape 7 -25 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Social class & Lifestyle 7 -26 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Behavioral segmentation • Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product. • Many marketers believe that behavioral variables are the best starting block for building market segments. • Focus on whether people purchase a product or not, how much, and how often they use it • User status 7 -27 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Behavioral segmentation OCCASIONS • Buyers can be grouped accordingly to occasions when they get the idea to buy, actually make their purchase, or use their purchased item. Occasion segmentation can help firms to build up product usage. • Some holidays , such as Mother’s day , Father’s day , Valentines day etc. are promoted partly to increase the sales of chocolates, candies, flowers, cards etc. 7 -28 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Benefit Segmentation • Benefit segmentation focuses on the value equation – Value=Benefits/Price • Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit and the major brands that deliver each benefit. 7 -29 © 2011 Pearson Education, Inc. publishing as Prentice Hall

User status & Usage rate USER STATUS • Markets can be segmented into Non Users, Ex. Users, Potential Users, First time Users, and Regular users of the product. • For example, Blood banks cannot rely on regular donors. They must also recruit new first time donors, and remind ex. Donors- each will require different marketing appeals. USAGE RATE • Markets can also be classified into LIGHT, MEDIUM, HEAVY product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. 7 -30 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Loyalty status • A market can also be segmented by consumer loyalty • Other consumers are somewhat loyal- they are loyal to two or three brands of a given product or favor one brand while sometimes buying others. • Still other buyers show no loyalty to any brand. They either want something different each time they buy or they buy whatever on sale 7 -31 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Requirements for Effective Segmentation Accessible Measurable Substantial Differentiable © Armstrong, Kotler & da Silva Actionable Marketing : An Introduction An Asian Perspective 6 -32

Evaluating Market Segments • Segment Size and Growth – Analyze current segment sales, growth rates, and expected profitability. • Segment Structural Attractiveness – Consider effects of: competitors, existence of substitute products, and the power of buyers & suppliers. • Company Objectives and Resources – Examine company skills & resources needed to succeed in that segment. – Offer superior value and gain advantages over competitors. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -33

Determining Market Segment Attractiveness Figure 6. 4 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -34

Target Marketing Strategies Figure 6. 5 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -35

Undifferentiated Marketing • Focus is on common (not different) needs of consumers. • Product and marketing program are geared to the largest number of buyers. • Uses mass advertising and distribution and aims to give the product a a superior image. 36 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Concentrated Marketing • The focus is acquiring a large share of one or a few segments of niches. • Generally, there are fewer competitors. • The Internet is ideal for targeting small niche markets. • There is some risk in focusing on only one market. 37 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Concentrated Marketing 7 -38 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Differentiated Marketing • Firm targets several market segments and designs separate offers for each. • The goal is to have higher sales and a stronger position with each market segment. • This approach increases the costs of doing business. © 2011 Pearson Education, Inc. publishing as Prentice Hall 39

Micro Marketing The practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer groups- It includes Local marketing and Individual marketing. – Local Marketing: Tailoring brands and promotions to the needs and wants Local Marketing of local customer groups—cities, neighborhoods, specific stores. – Individual Marketing: Tailoring products and marketing programs to the Individual Marketing: needs and preferences of individual customers. 7 -40 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Positioning for Competitive Advantage • Product’s position is the way the product is defined by consumers on important attributes. • The place the product occupies in consumers’ minds relative to competing products. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -41

Positioning • Product position: The way the product is defined by consumers on important attributes – the place the product occupies in consumers minds relative to competing products. • People compare products position based on – Attribute or Benefit – Quality and Price – Use or User – Competition 7 -42 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Positioning Map 6 -43 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Product vs. Brand Positioning 6 -44 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Positioning Map © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -45

Choosing a Positioning Strategy #1 Identify a set of possible competitive advantages on which to build a position #2 Choose the right competitive advantages #3 Select an overall positioning strategy © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -46

Identifying Possible Competitive Advantages • Key to winning target customers is to understand their needs better than competitors do and to deliver more value. • Competitive advantage – extent to which a company can position itself as providing superior value. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -47

Identifying Possible Competitive Advantages Product Differentiation Services Differentiation (e. g. , consistency, durability, reliability, repairability) (e. g. , speed, convenience, careful delivery) Channel Differentiation People Differentiation Image Differentiation (e. g. , hiring, training better people than competitors) © Armstrong, Kotler & da Silva (e. g. , convey benefits and positioning) Marketing : An Introduction An Asian Perspective 6 -48

Product Differentiation © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -49

Services Differentiation © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -50

Channel Distribution © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -51

People Differentiation © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -52

Image Differentiation © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -53

Choosing Right Competitive Advantages Important Profitable Distinctive Affordable Superior Communicable Preemptive © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 6 -54

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