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MKT100 WEEK 8.docx

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Ryerson University
MKT 100
Mary Foster

MKT100 Wednesday, March 13, 2013 Chapter 7: Segmentation, Targeting and Positioning  Identifying how marketers find which customer best fits  Choosing target markets to position g/s Introduction  Coca-Cola used gender to differentiate and promote goods Process 1. Establishing Strategies/Objectives  Consistent w/ current situation (SWOT) and firm’s objectives  Ie. Increase sales in X industry 2. Segmentation Bases  Descriptions of different segments o Needs, wants, characteristics  Find similarities and differences across segments I. Geographic Segmentation (grouping based on where you live)  Country, religion, areas within region, climate II. Demographic Segmentation (easily measured characteristics)  Age, gender, income, education, religion  Most common (easy to identify)  Easy to reach  Important: gender o Ie. Different habits… watching certain TV shows  Growing ethnic Canadians targeted  Bad uses: athletic wear  Best: combine w/ other bases, using census data III. Psychographic Segmentation (How people describe themselves)  Usually marketers determine (through demographics/buying patterns and usage) into which segment fall into  Choose how to occupy time (behaviour) o What underlying psychological reasons determine choices  Self values –goals for life o Ie. Self-respect, fulfillment, belonging  Self-concept –image of self o Ie. Dating services, L’oreal  Lifestyles: ways we live to achieve goals o Ie. Strong sense of belonging would live where there’s lots of people o Ie. Lululemon  System = VALS by Strategic Business Insights (SBI) o Classifies into customer segments o Good complement = demographics o Cons: not as objective, hard to determine potential customers IV. Behavioural Segmentation (Benefits from products) **START HERE**  Ie. Usage rare, user status, loyalty MKT100 Wednesday, March 13, 2013 Chapter 7: Segmentation, Targeting and Positioning  Ie. Amazon’s recommendations  Benefit segmentation* o Ie. Flip phone for tweens w/ potential controls o Ie. Hollywood  Loyalty segmentation* o Ie. Most profitable in LT i. Occasions –based on when developing needs ii. Benefits iii. User status –non users iv. Usage rate –light, medium, heavy v. Buyer-readiness –stages different vi. Loyalty status –hardcore splitting, shifting, switchers vii. Attitudes –(+): enthusiastic and (-) hostile, indifferent Using multiple segmentation methods  Easy, readily accessible info = demographics and geography o Cannot help marketers determine needs  Geodemographic segmentation o Geographic, demographic, lifestyle o Ie. Same neighbourhood o PSYTE cluster profiles (grouping all neighbourhoods to 60 different lifestyle clusters)  Urban Lower Middle (U4)  Suburban Affluent (S1) –Suburban Affluence  Suburban Affluent (S1) –Asian Heights  Useful for retailers, new locations 3. Evaluate segment attractiveness a) Identifiable o Distinct segments o Ie. The Gap o Determine who is within market that’s able to design g/s to meet needs b) Reachable/Accessible o Persuasive communication/product distribution o Marketers need to understand o What g/s exists o How it can help/buy o Ie. La Senza o Difficult: university students, religious and disabilities c) Responsive o Positive reactions o Ie. La Senza and formal wear …  d) Substantial and Profitable o Measure size and growth potential o Current/future profitability o Market growth (current size and expected growth rate) o Market competitiveness (# of competitors, entry barrier, g/s substitutes) MKT100 Wednesday, March 13, 2013 Chapter 7: Segmentation, Targeting and Positioning o Market access (ease developing list of channels) 4. Select target market  Key factor affecting decisions = marketers ability to pursue opportunity or target segment I. Undifferentiated Segmentation Strategy or Mass marketing o Everyone can be a potential user o Same benefits to all o No need for separate strategies for different groups o Effective for: basic goods (salt, sugar, cards) o Common for smaller organizations o Ie. Gas –changed from undifferentiated to differentiated with low, medium and high gas users II. Differentia
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