MT 219 Marketing Unit Four

1. MT 219 Marketing Unit Four Segmentation and Targeting Products and Branding Note: This seminar will be recorded by the instructor.

2. Customer Driven Marketing Strategy • Four stage process that segments, targets, differentiates and positions a product • Segmentation- Basic Process: Heterogeneous Market  Segmentation  Homogeneous Sub-Markets • Targeting- Selecting the best segments to focus on • Differentiating- Create unique benefits for target segments • Positioning- Placing product into customer’s minds compared to competition.

3. Target Market Segmentation • Identify appropriate strategy • Determine segmentation variables • Develop segment variables • Evaluate segments • Select specific segments

4. “Market Segmentation Process”

5. Geographic Variable • Climate • Terrain • City size • Urban/rural values • Market Density • Geo-demographic Segmentation • Micromarketing

6. Age Gender Race Ethnicity Income Education Occupation Family size Family life cycle Religion Social class Sexual orientation Demographic Variables – closely related to needs and measurable

7. Psychographic Variables • Social class • Lifestyle • Achievers • Strivers • Survivors • Personality • Compulsive • Romantic • Authoritarian • Enthusiastic

8. Behavioral Segmentation Variables • Most Powerful Variables • Underlies all other segmentation variables • These relate most directly to consumer desires • How the product benefits the consumer directly • Examples- • Occasions • Loyalty • Usage rates

9. Which Segment Variables to Use? • Marketers are not likely to use just one segment variable • Market segments often combine multiple variables together to create a desirable target segment

10. Criteria for Effective Segmentation 1. Measurable- Must be quantifiable 2. Accessible- You must be able to reach them 3. Substantial- Must be large enough so company benefits 4. Differentiable- Segment must respond differently 5. Actionable- Company must be capable of marketing to identified segments

11. Major Segmentation Strategies • Undifferentiated – Single product and single strategy for entire market – requires homogeneous market. • Differentiated- Two or more segments each with its own marketing mix • Concentrated – Single segment , one strategy • Micromarketing- products tailored to individuals or smaller local areas

12. Undifferentiated Marketing Market Segments 1 5 P Service 2 3 4 Technology

13. Differentiated Marketing Market Segments A E Service B C D Technology

14. Concentrated Marketing Market Segments Service P Technology

15. Niche Marketing Market Segments N Service N N Technology

16. Positioning • Where the product lives in the mind of the consumer as it relates to the competition • Identify and select appropriate competitive advantages for the product • Combine competitive advantages to develop an overall positioning strategy

17. Breath Mint Example Breath Mint Market: Tic Tac, Certs, Altoids, Dentyne Ice, BreathSavers, LifeSavers, Mentos, etc.

18. Breath Mint Example Tic Tac Market Segmentation Study

21. What is a Product? Anything that is offered to a market to fulfill a need or want good service idea place person

22. Classifying Consumer Products • Convenience – relatively inexpensive, frequently purchased items with many substitutes. Don’t confuse with a convenience store. • Shopping – items for which buyers are willing to spend considerable effort to compare and purchase. Don’t confuse with what you buy when just shopping • Specialty - products with unique characteristics for which consumers are willing to expend effort • Unsought– items people do not know of or do not think about buying. Many times due to emergency needs. Also, many impulse items.

23. Services Intangible products involving a deed, performance, or effort that cannot be physically possessed • Haircuts • Concerts • Tax preparation • Annual doctors’ physicals

24. Nature of Services • Intangibility • Inseparability • Variability • Perishability Let’s look at these individually

25. Issues related to service intangibility • Difficult for customers to evaluate • No physical possession • Difficult to advertise and display • Pricing is problematical and subjective • Service process not always protected by patents

26. Issues related to service inseparability • Does not allow for mass production • Customer participation required • Other customers can affect process • Difficult to distribute

27. Issues related to variability • Quality difficult to control • Standardization is a problem • Services vary from provider to provider • Services can vary from the same provider • Reputation is crucial • Franchises try to emphasize service homogeneity • Reason for grading rubrics

28. Issues related to service perishability • Services cannot be stored or inventoried • Unused capacity is lost forever • Demand may be time sensitive • Balancing supply and demand is difficult

29. Factors Leading to Customer Switching Behavior • Pricing • Inconvenience • Core Service Failure • Service Encounter Failures • Response to Service Failure • Competition • Ethical Problems • Involuntary Switching

30. Branding- Brand Equity The marketing and financial value associated with a brand’s strength in a market brand name awareness brand loyalty perceived brand quality brand associations

31. Selecting a Brand Name • Easy to pronounce, spell and remember • Trademarkable • Distinctive • Conveys brand benefits • Travels globally- Big concern today

32. Types of Brands • National (Manufacturer’s) brands • Store (Private) brands • Licensing

33. Brand DevelopmentLine extensions- new forms, sizes, fragrances, etc are created in existing product lineBrand extensions – use of existing brand on a new category, such as extending from a rock singer into actingMultibrands- use of different brand names by one company. Nestle or Proctor and GambleNew Brands- Creating entirely new brands

34. Any Questions? Thank you for attending! See you next week!