Discussion 4 MK
Kendrick18
Week4OverviewPowerPoint1.pptxWeek 4 Overview
Principles of Marketing
MRKT 310
Week 4 covers very critical concepts of segmentation, targeting and positioning. All the information a company knows about its customers bears fruit when developing these marketing strategies. Review these concepts carefully in the week’s readings.
Market Segmentation, Targeting,
and Positioning
Figuring out who are your customers
4.1 Targeted marketing versus mass marketing
4.2 How are markets segmented
4.3 Selecting target markets and target-market strategies
4.4 Positioning and repositioning offerings
Long gone are the days when all a company had to do was shotgun advertising as widely as possible and customers came. Now, not only is advertising more expensive, but marketers have come to realize the fact that they waste a lot of their dollars trying to reach everyone when their product only appeals to a few.
While there are a few products that can still engage in mass marketing, most companies chose to target market. And, once a target market is selected from amongst various attractive market segments, the company considers how to speak to that target market, how to position their product in the minds of the target market members.
4.1 Targeted marketing versus mass marketing
Mass marketing = undifferentiated marketing
shotgun approach to all consumers without any consideration of their unique characteristics
not many mass marketed products
Targeted marketing = differentiated marketing
finding groups of like customers to serve that will be most receptive to product or service offering
can be more efficient and effective use of resources
Finding target markets and engaging in differentiated marketing can be an onerous process; but can be well worth the organization’s resources. Reaching the right target market means the firm can serve their needs better with more refined product offerings, pricing and distribution strategies, and how to communicate with a well defined group of customers with like characteristics.
Retaining customers is still easier than finding and attracting new customers
Targeting ‘best’ customers is job one. Find more of them is a market penetration growth strategy
May also need to find new market segments for growth or a market development growth strategy
Retaining customers as a strategy is called market penetration or trying to sell more need filling offerings to the same customers or target market.
A company can also strategize for growth through finding new market segments, sometimes finding a new need for the same product that appeals to a new and different target market.
These are just a few of the ways target marketing is useful to the company. Growth efforts become more focused and generally more poised for success.
4.2 How markets are segmented
General categories of segmentation bases
Behavioral segmentation
Demographic segmentation
Geographic segmentation
Psychographic segmentation
There are four generic categories or segmentation bases. These are not characteristics of market segments — just the four areas of characteristics. Sometimes it is enough to only find women between the ages of 18 and 35 as the characteristics a market segment has in common. Those are two demographic characteristics.
Not every market segment includes variables from all bases or even all criteria within each base.
Example of a market segment for the TV show, Blackish
Behavior
Like to watch TV as a family unit
Demographic
18-40 years old, lives with a family, African American, white collar wage earner in family, at least high school diploma or higher, medium household income of $50,000
Geography
Lives in urban/suburban population centers of cities of at least 1 million
Psychographics
believes in American Dream, busy lifestyle with multiple sports and careers,
Look at this example of a market segment description. It’s pretty specific for the TV show Blackish and can include multiple characteristics from all four of the general categories. Being this specific also makes it easy for the product manufacturers, the show producers, to sell its advertising time since they can deliver a very specific and highly lucrative audience for other products who want to reach the same target market.
4.3 Selecting target markets and target-market strategies
A target market must be:
Sizable
Growing
Not swamped with competitors
Accessible or you can reach them in some manner
Company has resources to compete
Target market is a good fit with company’s objectives and mission
Getting too specific in a description of the characteristics of a target market can be a problem. Therefore, here are the criteria for a useable market segment.
Then the company needs to consider its resources and how many of the identified market segments it can effectively reach and serve with its offering.
Sometimes it is only one market segment that becomes the target market — sometimes it is several target markets. If the company has several target markets it is because they know they can serve the unique needs of each group with its own product, distribution, price and communication strategies.
Target market strategies — How many market segments should become target markets?
Multisegment marketing
Concentrated marketing
niche marketing
microtargeting
Global markets
If the company serves more than one target market they are engaged in multisegment marketing, usually reserved for larger companies with multiple product or service lines.
Concentrated marketing and its two variations, niche and micro targeting, are usually the target market strategy of choice for companies with limited resources to tackle more than one target market.
Global markets are unique to international companies that grow by expanding into other countries, generally when domestic opportunities are limited. Global markets can be groups of people with similar characteristics irregardless of the country in which they live. Practically, however, companies will first identify countries in which they believe they can do business and then market to the target market within that country or countries.
4.4 Positioning and repositioning offerings
Positioning — tells the consumer why they should buy your product and competitive offerings
Perceptual map — tool used to graphically depict where competition’s positioning are located related to the company offering.
Uncontested space — the blank space not occupied by anyone that still has the greatest potential based on the two variables used in the perceptual map
If company’s position overlaps a competitor, may want to consider a repositioning strategy
Tagline — the marketing communications tool used to convey the positioning strategy
A company can identify the best target market(s) but unless they can communicate their offering to them in a way that distinguishes their need filling offering from competitive offerings it may all be in vain. This is called positioning.
The tool most commonly used to identify a place in the customers’ minds is called a perceptual or positioning map. The simplest perceptual map identifies the two most important product features and places them on X and Y axis and then plotting all competitors based on those two attributes. For many mature products, multiple competitors can occupy the same or virtually the same place on the map.
The goal for any marketer is to find that empty spot — the uncontested spot on the map where they can stand out from the crowd.
The company develops a simple positioning statement, which generally translates into creative strategy and tagline seen by the target market in the company’s marketing communications.
Week 4 Assessments
Week 4 Discussion Forum participation
Week 4 Writing Assignment
Week 4 Quiz
All due Tuesday
by 11:59 pm, Eastern Time!
A tagline for a cat food product, see how
the headline resonates with the
user!
Here our dog is illustrating the main product feature of giving cats energy. A cat owner may want to have an energized cat at the headline communicates. However, if the cat owner has a senior cat, this ad would not be effective in positioning the main product benefit to that audience.
Questions or concerns?
Be sure to take advantage of the General Discussion topic in the Week 4 Discussion Forum to ask any questions, get clarifications, or otherwise seek the advice and assistance of your faculty member.
Since this week’s topics are so important, and really at the center of marketing strategy, please be sure you ask your faculty any and all questions or clarifications you may need.
