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Market Sgmentation B. W Maina (Presentation)
Market Sgmentation B. W Maina (Presentation)
TARGETING
AND
POSITIONING
BY B .W MAINA
MARKET
1. PLACE Market place where buyers and sellers meet to exchange goods and services e.g. Wakulima Market SITUATION Set of conditions consisting of buyers and sellers of a certain product Economics definition DEMAND Market demand for a particular good.
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A market consists of all potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want
TARGET MARKETING
Process of dividing the market into major market segments , evaluating them , and selecting and targeting one or more segment, and deciding on the companys positioning in each market
2.
Market targeting Selects or aims at one or more of the segments after evaluation Product positioning Develops product and marketing mixes tailored to each segment
3.
Buying habits and requirements are heterogeneous Different tastes and preferences Consumers widely scattered /spread geographically Consumers may be too numerous Difficult to serve all these consumers through mass marketing
MARKET SEGMENTATION
Consists of taking the total heterogeneous market for a product and dividing into several sub markets or segments , each of which tends to be homogeneous in all significant aspects Involves taking the whole market and dividing it into homogeneous units with similar characteristics such that they react uniformly to given stimuli in the market
MARKET SEGMENTATION(CONT)
Entails developing different demand schedules/curves for each market segment instead of having only one for the entire market Groups together in the same segment consumers with similar needs which minimises differences among consumer groups and makes it easier to serve them Represents the ultimate extension of the marketing concept starting with consumers and what they want, and recognizing that not all people are alike and that one mans meat is one mans poison
Products may be tailor-made or custom-made for consumers recognizing each consumer is unique and constitutes a market by himself In industrial marketing products may be made according to buyers specification In consumer markets customization is possible but difficult as consumers are too numerous and quantities taken by each consumer too small
PROBLEMS OF SEGMENTATION
Difficult to select the most appropriate segmentation variable Costs may increase due to many segments e.g. inventory , advertising promotional costs Small segments may be unprofitable Lack of economies scale
GEOGRAPHIC SEGMENTATION
Market divided into different geographical units eg
Provinces, regions or districts soft drinks Rural versus urban bakeries, newspapers
Company concentrates in one geographic area instead of operating nationally Useful in initially defining markets
Age babies, young, teenager, old e.g. clothes, toys, music Sex male, female e.g. clothes, hairdressing cosmetics,magazines which appeal to men or women Health condition/concerns diet foods, low-tar cigarettes, clubs Family size products packaged in family sizes Marital status married, single, divorced e.g. contraceptives,counseling,family planning
BEHAVIOURAL:PRODUCTRELATED SEGMENTATION
Benefits sought - quality, economy,convenience, prestige, durability, comfort, safety, taste. Use occasion - regular vs special occasion e.g.. Flower giving (Valentines Day, Hospital, Weddings, Funeral); Business vs. vacation air travel; normal wines vs. champaigne for celebrations. User status non-user, ex user, potential user, first-time user, regular user e.g. airline flier vs. non flier; drug users rehabilitation programmes could focus on regular users to quit the habit or to discourage non- users Usage rate light, medium, heavy users e.g.. Coffee and beer drinkers, cigarette smokers, bank accounts. Loyalty status none, medium, strong, e.g. supermarket loyalty cards
MARKET TARGETING Market targeting is the process by which the firm identifies and selects one or more market segment(s) requiring a separate marketing mix. Market segmentation reveals the market segmentation opportunities facing the firm. Market targeting entails evaluating the segments identified and selecting the most attractive one(s)
MARKET TARGETING :EVALUATION For proper evaluation it is useful to assess: The profit potential of the various segments The strengths and weakness of the firm Strengths and weakness may be assessed by considering
Human resource capacities skills, abilities, competencies and experience Material resources facilities, equipment Financial resources money available
UNDIFFERENTIATED MARKETING STRATEGY The firm ignores market segment differences and goes for the whole market with the product The focus is on what is common in the needs of consumers rather than on what is the different The firm designs a product and marketing programme that will appeal to the broadest numbers of buyers The firm relies on mass distribution and mass advertising
Firm decides to operate in several segments of the market Firm designs separate differentiated offer for each market segment e.g. cars , tooth pastes A good competitive strategy leading to higher profits Business costs could,however, increase if markets are small
Strategy used when the firms resources are limited Firm can get strong market position in the market segment served Firm can get greater knowledge of segments needs Firm may enjoy economics of scale High risks should the segment turn sour
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PRODUCT POSITIONING
Positioning is the act of designing the companys product and marketing mix to fit a given place in the consumers mind You position or the place the product in the mind of the consumer or prospect Positioning is what you do to the mind rather than the product For each segment the company develops and communicates a product-positioning strategy to compete effectively
Product may be positioned against other products,eg Bic pens and others Coca cola vs. Pepsi cola Omo vs. Toss vs. Persil Colgate vs. Close-up vs. Aquafresh Batteries
The best way to beat your biggest competitor - time It outpaces the clock It lets you manage many situations in the most effective way : face to face After all time flies. Shouldnt you? The clock is a ruthless rival. It never rests. Never hesitates. Never retreats.