Course notes Marketing principals and Practice

Marketing principles and practice

The marketing segmentation process & target marketing process

The marketing segmentation & target marketing process consists of three phases:

1. Segmentation the marketing
2. Identifying the target market segmentations
3. Positioning the products

Undifferentiated marketing (

Marketing mix
Company The market

Differentiated market (have more than product to offer to the clients)
Coca-Cola,

Marketing mix 2
Market segment 1

Company Marketing mix 2
Market segment 2

Marketing mix 3
Market segment 2

Concentrated marketing (have only one product to the market)

Market segment 1
Marketing mix 2
Company Market segment 2

Market segment 2


Step 1 market segmentation

Definition: dividing a market into smaller segment with distinct needs, characteristic
or behavior that might require separate marketing strategies or mixes.

Segmentation variables

There is no one single way to segment a market a marketer has to try different
segmentation variables, alone and in combination, to find the best way to view the
market structure.

The major segmentation variables that may be used in segmenting consumers markets
include:
Geographic variables
Demographic variables
Course notes Marketing principals and Practice


Psychographic variables e.g. social crisis, lifestyle personal etc.
Behavior variables e.g. user status, loyalty status, readiness stage, attitude
towards products, etc.

5 requirements for effective segmentation.

There are many ways to segment a market, but not all segmentations are effective.

To be useful, market segments must be:

1. Measurable: the size, purchasing power, and profiles of the segments can be
measured
2. Accessible: the market segments can be effectively reached and served
3. Substantial: the market segments are large of profitable enough to serve. A
segment should be that largest possible homogenous group worth pursuing
with the tailored marketing.
4. Differentiable; the segments are conceptually distinguishable and respond
differently marketing mix elements and programs
5. Actionable. Effective programs can be designed for attracting and serving the
segments.

Step 2: market targeting

Definition: the process of evaluating each market segments attractiveness and
selecting one or more segments to enter.

Market segmentation reveals the forms market segment opportunities. Now the firm
has to evaluate the various segments and decide how many and which segments it
can serve best.

Evaluating market segments
In evaluating different marketing segments, a firm must look at THREE factors.

Segment size and growth
Segment structural attractiveness
Company objectives and resourses

The company must first collect and analyze the data on curent segment sales. Growth
rates and the expected profitabillity for variuos segments. It will be interested in
segments that have teh rigth size and growth characterictics.

Selecting tarket market segments
After evaluating different segments the company must decide which and how many
segments it will target.

A target market consists of set of buyers who share common needs of characteristics
that the company decides to serve. 77,24 min

Marketing targeting may be carried out at several different levels:

Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Course notes Marketing principals and Practice


Concentrated (niche) marketing
Micromarketing (local or individual marketing (clients))
These levels range from targeting broadly to targeting narrowly

Step 3 differentiation and positioning

Definition of differentiation: differentiating the market offering to create superior
costumer value.

Definition of POSITIONG: arranging for a market offering to occupy a clear
distinctive and desirable place relative to competing products in the minds of target
consumers.


Marketing principles and practice
Kovo 25

Beyond deciding which segments of the market it will target the company must
decide on a value proposition i.e. hoe it will create a dififferented value for targeted
segments and what positions it wants to occipy in those segments.

A productions positions is the way the prouct is defined by consumers on
important attributes - the place product occupies in consumers minds realtive to
competing products.

PRODUCTS are made in factories, but BRANDS happen in the minds of
consumers

Choosing a differentaited and positiong strategy

The differentaition and positioning task consists of three steps:

1. Identify set of differentiating competitive advantages on which to build a
position.
2. Choose the right competitive advantages
3. Selecting an overall positioning strategy
Definition of competitive advantage:

And advantage over competitors gained by offering greater costumer value, either by
having lower prices or providing more benefits that justify hihger prices.

What differences to promote?
Not every difference is differentiatior!
Not all brand differences are meaningful or worthwhile; not every difference makes a
good differentiatio. Each difference has the potential to create company costs as well
as costumer benefits.