TUTORIAL 4 /

WEEK 5

Segmentation, Targeting and
Positioning





Nurul Nabila
Chin Vi Vien

CUSTOMER-DRIVEN MARKETING STRATEGY
What is customer-driven marketing strategy?
- Target marketing
Profiling the markets that are segmented
Choosing one or a few of the profiles
Developing products based on the needs and wants of
the chosen profile/profiles
Known as the rifle approach

4 major steps to constructing a customer-driven
marketing strategy:
- Market segmentation
- Market targeting
- Differentiation
- Positioning


MARKET SEGMENTATION
- Taking large markets and scaling them down into
smaller segments; taking into consideration:-
distinct needs,
characteristics, or
behaviour

- Companies can easily reach the segments more
EFFICIENTLY and EFFECTIVELY; developing
products and services according to the markets
needs and wants
MARKET SEGMENTATION
4 vital segmentation topics
- Segmenting consumer markets
- Segmenting business markets
- Segmenting international markets
- Requirements for effective segmentation

MARKET SEGMENTATION
Segmenting Consumer Markets
- No solitary way to segment the markets

Major factors in consumer market segmentation
- Geographic segmentation
- Demographic segmentation
- Psychographic segmentation
- Behavioural segmentation


MARKET SEGMENTATION
Segmenting Consumer Markets
1. Geographic segmentation
- Segregating the market into different geographical parts;
such as nations, regions, states, countries, cities, or
neighbourhoods.
- Companies may direct in one, a few, or all areas but
focuses on geographical distinctions in needs and wants
- Example:-
Walmart

MARKET SEGMENTATION
Segmenting Consumer Markets
2. Demographic segmentation
- Segregating the market into different variables;
such as age, gender, family size, family life cycle,
income, occupation, education, religion, race,
generation, and nationality
- Most popular form of market segmentation

MARKET SEGMENTATION
Segmenting Consumer Markets
2. Demographic segmentation
- Age and life-cycle segmentation
Companies offering varieties of products and services for different age
and life-cycle groups
Example:-
@ Disney Cruise Lines
- Gender segmentation
Mostly used by marketers of clothing, cosmetics, toiletries, and
magazines areas
Example:-
@ Harley-Davidson


MARKET SEGMENTATION
Segmenting Consumer Markets
2. Demographic segmentation
- Income segmentation
Mostly used by the marketers of
automobiles, clothing, cosmetics, financial
services, and travel areas
Example:-
@ Four Seasons Miami

MARKET SEGMENTATION
Segmenting Consumer Markets
4. Behavioural segmentation
- segregating the market into segments based on
their knowledge, attitudes, uses, or responses to a
product or service
- believed to be the best starting point for building
market segments by marketers

MARKET SEGMENTATION
Segmenting Consumer Markets
4. Behavioural segmentation
- Occasion segmentation
helps companies build up product usage
Example:-
@ M&Ms
- Benefit segmentation
Finding benefits consumers look for in a product
class, the kinds of consumers who look for each benefit,
and the major brands that deliver each benefit
Example:-
@ Champion athletic wear


MARKET SEGMENTATION
Segmenting Consumer Markets
4. Behavioural segmentation
- User status
segmenting the market into nonusers, ex-users,
potential users, first-time users, and regular users of a
product
companies desire to reinforce and retain regular
users, attract targeted nonusers, and reinvigorate
relationships with ex-users
- Usage rate
segmenting the market into light, medium and heavy
product users
Example:-
@ Burger King


MARKET SEGMENTATION
Segmenting business markets
- Uses the same variables as segmenting consumer
markets
- Additional variables; such as:-
customer operating characteristics
purchasing approaches
situational factors
personal characteristics
- Example:-
American Express

MARKET SEGMENTATION
Segmenting international markets
- Segregating world markets into segments with different
needs and behaviours
- Either using one or a combination of a few variables

MARKET SEGMENTATION
Segmenting international markets
Factors in segmenting international markets; with
the presumption that segments should consist of a
group of countries
- Geographic location
- Economic factors
- Political and legal factors
- Cultural factors

MARKET SEGMENTATION
Segmenting Consumer Markets
4. Behavioural segmentation
- Loyalty status
segregating the market into groups according to
their degree of loyalty
consumers can be loyal to brands, stores, and
companies
Example:-
@ Apple
Develop marketing appeals
Detect brands most competitive with its own
Learn about its marketing weaknesses


MARKET SEGMENTATION
Using Multiple Segmentation Bases
- Locate smaller, better-defined target groups
- Merging geographic, demographic, lifestyle, and
behavioral data to aid companies segment their
markets down to postcodes, neighbourhoods, and
even households
- For example, a bank may not only locate a
wealthy and retired adults group. It also
categorises a few segments based on their
income, assets, savings and risk preferences,
housing, and lifestyle within that group
- Example:-
Nielsens PRIZM system

MARKET SEGMENTATION
Segmenting international markets
Intermarket segmentation
- Grouping segments of consumers with similar
needs and buying behaviours even though they
are located in different countries
- Example:-
IKEA



MARKET SEGMENTATION
Segmenting Consumer Markets
3. Psychographic segmentation
- Segregating the market into various segments
based on class, lifestyle, or personality
characteristics
- People in same demographic group can have
distinct psychographic characteristics
- Example:-
Royal Caribbean

MARKET SEGMENTATION
Requirements for effective segmentation
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable

MARKET SEGMENTING
Requirements for effective segmentation
Measurable
- Measuring variables that can be measured; such as:-
Size
Purchasing power
Profiles
- Certain segmentation variables are difficult to
measure

Accessible
- Reaching and serving market segments
EFFECTIVELY

MARKET SEGMENTATION
Requirements for effective segmentation
Substantial
- Serving market segments that are large in scale or
profitable enough
Differentiable
- responding distinctively to different marketing mix
elements and programmes
- Market segments are conceptually distinguishable
Actionable
- designing effective programmes to attract and serve the
market segments

MARKET TARGETING
- consisting of a set of consumers with similar needs or
characteristics that a company decides to serve

3 factors in evaluating market segments
- Segment size and growth
- segment structural attractiveness
- company objectives and resources

MARKET TARGETING
Evaluate market segments
Select target market segments
Undifferentiated marketing
Differentiated marketing
Concentrated marketing
Micromarketing

MARKET TARGETING
1. Segment size and growth
- right size and growth is a relative matter
- some companies may find largest, fastest-
growing segments unattractive
- some companies may find smaller and less
attractive segments better to target as they
are potentially more profitable to them

MARKET TARGETING
2. Segment structural attractiveness
- Observing major structural factors that affect
long-run segment attractiveness
- Example:-
a segment is less attractive if it has many strong
and aggressive competitors
if power of buyers is strong, such as having
strong bargaining power relative to sellers,
buyers/consumers will try to force prices down,
demand more services, and set competitors against
one another

MARKET TARGETING
3. Company objectives and resources
- some attractive market segments can be
discarded quickly because they do not match
with the companys long-run objectives

Market Targeting
Undifferentiated marketing ( mass marketing)
ignore the differences of market segment and
target the whole market
focus the common needs of consumers and
ignores the differences
Example :



Market targeting
Differentiated marketing (segmented marketing)
Firms target several market segments and
design several offers for each products/
services
Example :

Market targeting
Concentrated marketing targets ( niche
marketing)
Firms targets a small share of a large market
Able to achieve strong market position and
able to market the products/services
effectively
Example :
Market targeting

Micromarketing
Local marketing
- Customizing its brands and promotions to the
demand of the local customer groups (
localization)
- Example : Pestle and Mortar , McD menu
varies in different countries

Market targeting
Micromarketing
Individual Marketing
- One to one marketing, customized marketing,
markets to one marketing
- tailoring products and marketing programs
according to the customers needs and
preferences
- Example : McD #madeforyou

HOW TO CHOOSE TARGET MARKETING
STRATEGY?
Depends on:
- companies resources
- marketing variability
- Competitors marketing strategy
SOCIAL RESPONSIBILITY FOR TARGET
MARKETING
Targeting marketing sometimes lead consumer to
buy harmful and controversial products
Must be socially responsibility to think of
consumers welfare such as health and educative
messages which benefits consumers

Corporate Social Responsibility is the continuing
commitment by business to behave ethically and
contribute to economic development while improving the
quality of life of the workforce and their families as well as
of the local community and society at large.
- by Holmes and Watts
Example : Mcdonalds supersize ,
milkpowder scandal

DIFFERENTIATION AND POSITIONING
Product position is the way the product is defined
by consumer important attributes
the place of the products that place in consumers
mind relative to competing products.

DIFFERENTIATION AND POSITIONING
HOW?
Identify a set of possible competitive advantage to
build a position
a company that can differentiate and position itself
in providing customer value
Choose the right competitive advantages
Select an overall positioning strategy
Communicates and delivers the chosen position to
the market

TUTORIAL
Banking
Cool Dudes
- Refers to university students, both make and female, who work part-
time and live away from home
New Pair
- Couples with young children who are buying their own home
Big Boss
- Owners of a small business, both male and female

TUTORIAL
Banking
Cool Dudes
1. Personal loans & lines of credit
- A flexible loan offered by a bank or financial institution to an individual
or businesses
- It is a limited amount of money that is accessible by individuals as
needed and repayable immediately or over a pre-specified period of
time.
- Example:-
RBC Royal Banks Royal Credit Line
- For undergraduate and postgraduate students studying in an
accredited college or university
- Credit lines start at $5,000/annum for undergraduates and
$10,000 for postgraduates
- Lower interest rates

TUTORIAL
Banking
Cool Dudes
2. Debit card
- A plastic payment card that provides the cardholder electronic access
to his or her bank account at a financial institution
- Where accepted, the debit card can be used instead of cash when
making payments
- Example:-
Bank SAs Visa Debit UniCard
- Specially designed for university students
- No annual fee with convenient access to funds in
cardholders transaction account
- Can be used to shop securely online, at home, over the
phone, or overseas, where Visa is accepted and to
withdraw at any ATM worldwide that displays the Visa
logo

Banking
New Pair
1. Mortgage loan/housing loans
- A debt instrument, secured by the collateral of
specified real estate property, that the borrower is
obliged to pay back with a pre-determined set of
payments
- Used by individuals or businesses to make large real
estate purchases without paying the entire value up
front
- Example:-
HSBC Malaysias Ideal Home Plan
- Offers regular, systematic payments
- For applicants 18 65 years of age
- Property value up to 100, 000MYR for Peninsular Malaysia or
120, 000MYR for East Malaysia

Banking
Big Boss
1. Business loan
- A debt that the company is obliged to repay
according to the loans terms and conditions
- Example:-
Alliance Banks General Working Capital
- Provides term-loan, where a fixed amount of loan granted
for an agreed period of time and to be repaid in fixed
instalments
- Provides overdrafts, where it is a revolving loan which
enables customer to draw on the overdraft limit via current
account, or by issuing cheque as long as the overdraft limit is
not exceeded

FRANCHISED RESTAURANT : SUBWAY

Hungry Mate
Example : Subway
Footlong sandwiches
Size Huge and filling
Calories - low
Quick and easy
Ingredients can be customized


MCDONALDS SUPERSIZED MEAL VS SUBWAYS
FOOTLONG SANDWICHES
Supersized meal is not socially responsible in
terms health and nutrition level
Whereas subway sandwiches focus on low
calories and provide healthy ingredients

Morgon spurlock Mcdonalds supersized
documentary :

http://www.youtube.com/watch?v=mQj2u
4ap5bo
FRANCHISED RESTAURANT : MCDONALDS
Hectic Mums
drive thru and take away services
Value kids meal
McD #madeforyou
Facilities in McD Playground, wifi services

WHAT IS MCDONALDS #MADEFORYOU ?
http://www.youtube.com/watch?v=uG63ebcHNi4

FRANCHISED RESTAURANT : OLDTOWN
WHITE COFFEE
Example : Oldtown White coffee
Value set meal
Comfortable environment
Classic culture of the coffee brings back
coffee tasting memories
One stop place for local cuisine