MM555 Week 3 Lecture

MM555
Module 3 Segmentation, Targeting & Positioning

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Source: http://www.forbes.com/sites/sap/2012/12/03/6-stepsto-executing-a-content-strategy/

Session Outline
Welcome Review of Module 2 Internal Classes - Activity Digging Deeper Module 3: Segmenting, Targeting and Positioning Break Learning Activity Next Steps Marketing plan group time
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Module 3: Learning Objectives

1. Define the main steps in designing a customer-driven marketing strategy: market segmentation, market targeting, differentiation, and positioning. 2. List and discuss the main bases for segmenting consumer and business markets. 3. Explain how companies identify attractive market segments and choose a market-targeting strategy. 4. Discuss how companies differentiate and position their products for maximum competitive advantage.

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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Review of Module 2
Strategic Planning relating to Marketing and delivering value. Analysis of Internal and External Environmental Forces SMART Objectives Marketing Information Systems and Market Research Process

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BRICS, CIVETS & the Next Eleven!

Next week we are putting theory into practice Take note of your assigned country.
o Group 1: China o Group 2: India o Group 3: Indonesia o Group 4: Sub Saharan Africa o Group 5: Australia

Locate at least 1 report that relates to that country. More if you can. Bring along next week. We will be exploring questions such as:
o What are the opportunities? o Where should organisations focus? Which industries? Markets? o What is required for an organisation to succeed in that market?

This is an in-class activity. Just make sure you have something to work with!
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Sample Resources
Report| McKinsey Global Institute Manufacturing the future: The next era of global growth and innovation
o http://www.mckinsey.com/insights/mgi/research/productivity_competitiveness_and _growth/the_future_of_manufacturing

Report| It's a MAD world: How Mobile, Agile, Digital employees and consumers are reforming Australia
o http://www.accenture.com/Microsites/futurebusinesstrends/Pages/trend-onevideo.aspx

Report| The Rise of the African Consumer

o http://www.mckinsey.com/global_locations/a frica/south_africa/en/rise_of_the_african_co nsumer
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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Your Task
Work out a system to review the material provided Identify and synthesise the key issues, risks & opportunities that the class will need to know about. In doing this, you may wish to use one or more of the frameworks discussed regarding preparing a Situation Analysis Identify where organisations should focus their attention and summarise the key success factors. Put together a 5 minute presentation that would serve as the equivalent of an executive summary (but via a presentation) to the class
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Presentation
Take no more than 5 minutes You can present in a manner you feel comfortable (e.g. PowerPoint, material on a whiteboard, stand-up delivery; a musical) Focus on what the strategic marketing implications are for your chosen business rather than merely repeating issues you have come across Ensure that you cover the key success factors. Are there any regional implications?
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In each Module we encourage you to hunt out the latest news; explore the research and scan social media for whats new, whats important and what has piqued your interest on the topic of marketing

In the News; Out of Academia; Around the Grounds

DIGGING DEEPER

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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Source: http://thisweekin.com

..What Caught Your Eye This Week?

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This Weeks Reading. ..Which Ideas Will You Hold Onto?

Bailey, C., Baines, P., Wilson, H. and Clar, M 2009 Segmentation and customer insight in contemporary services marketing practice: why grouping customers is no longer enough Journal of Marketing Management Vol. 25, No. 3-4, pp. 227-252 O'Connell, A. 2008. Buying in: Harvard Business Review Sept 2008 Vol 86 Iss 9. Court, D. and Narasimhan, L. 2010 Capturing the world's emerging middle class. McKinsey Quarterly; Issue 3, p12-17, 6p, 1 Diagram, 1 Chart Yankelovich,D. and Meer,D. 2006 Rediscovering Market Segmentation Harvard Business Review, Feb

Refer to OConnell 2008 article? What insights have you found relating to what YOU buy and who YOU are
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Understanding the market and creating an identity

MODULE 3: SEGMENTATION, TARGETING & POSITIONING

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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Marketing Management Framework

Customer
Consider factors such as decision making, values, needs & wants

Company
Or organisation. What is our Strategic Purpose? Capabilities? Weaknesses?

Context
Whats going on in the macro environment?

Competitors Collaborators
Who do we work with? Who are our partners? Who are our current and potential competitors? Where are they placed in the market?

Marketing Objectives Segmentation

Based on geographic, demographic, psychographic and/or behavioural factors

Targeting
Consider strategic fit; potential and defensibility against competition

Differentiation
Differentiating the market offering to create superior customer value

Focus for Module 3

Positioning Analysis & Strategy

Create Value
Marketing is about creating customer value and profitable customer relationships
Product / Service People Processes Physical Evidence

Your place in the market space Core benefit proposition Unique selling proposition Positioning Statement

Planning & Implementation

Capture Value

Communicate Value
Integrated Marketing Communications (including Promotion)

Deliver Value

Price

Placement Logistics

The MM555 Marketing Management Framework draws on a number of sources including Iacobucci Curtin University is a trademark of Curtin University(2013), of Technology CRICOS Codeand 00301J Armstrong et Provider al (2012) Gibbs (2009) and includes the key factors which need to be taken into account when developing a comprehensive marketing strategy.

Implementation, Monitoring & Measuring Outcomes

Marketing Management Framework

Chpt 1,2,14 Chpt 16 &17 Chpt 15 & 16 Chpt 10,16

Chpt 15 & 16

Customer
Consider factors such as decision making, values, needs & wants

Company
Or organisation. What is our Strategic Purpose? Capabilities? Weaknesses?

Context
Whats going on in the macro environment?

Competitors
Who are our current and potential competitors? Where are they placed in the market?

Collaborators
Who do we work with? Who are our partners?

Marketing Objectives
Chpt 3

Chpt 16 Chpt 16

Segmentation
Based on geographic, demographic, psychographic and/or behavioural factors

Chpt 14

Targeting
Consider strategic fit; potential and defensibility against competition
Chpt 5

Differentiation
Differentiating the market offering to create superior customer value

Positioning Analysis & Strategy

Create Value
Marketing is about creating customer value and profitable customer relationships
Chpt 6,7 & 8 Product / Service People Processes Physical Evidence

Your place in the market space Core benefit proposition Unique selling proposition Positioning Statement

Planning & Implementation

Capture Value
Chpt 9

Communicate Value
Chpt 11,12 & 13 Integrated Marketing Communications (including Promotion)

Deliver Value
Chpt 10

Price

Placement Logistics

The MM555 Marketing Management Framework draws on a number of sources including Iacobucci Curtin University is a trademark of Curtin University(2013), of Technology CRICOS Codeand 00301J Armstrong et Provider al (2012) Gibbs (2009) and includes the key factors which need to be taken into account when developing a comprehensive marketing strategy.

Implementation, Monitoring & Measuring Outcomes

Chpt 16

Market Analysis

SEGMENTATION

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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Summary of Segmentation, Targeting and Positioning

S

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

What is a market segment?

A market segment consists of a group of customers who share a similar set of needs and wants.

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

Segmentation

Segmentation is about identifying groups that are similar to one another in BEHAVIOUR (=homogenous within)

But identified Segments may differ from one another (=heterogeneous between)

Marketers look at the entire set of potential customers and classify them in similar groups or segments

http://bit.ly/AtvWOq

Segments are often defined by more than ONE variable!

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

Mass Marketing

All customers are treated the same Is usually more efficient but not effective in meeting customer needs Long live Mass Marketing! Largest potential market ->Lower cost ->Lower prices or higher margins
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Mass Marketing is dead! Media too expensive Markets too proliferated

Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

Toyotas Segmentation

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Segmenting Consumer Markets (B2C) *

Geographic Demographic Psychological (Psychographic) Behavioural

Descriptive characteristics

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

VALS

Take the survey:

http://www.strategicbusinessinsights.com/vals/presurvey.shtml
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B2B compared to B2C Segmentation

Primary distinction between B2B & B2C is the sources of data are different

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Concept in Action: Discussion Question

Which variables would you segment on?

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2012 MM555 Curtin Graduate School of Business

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MM555 Week 3 Lecture

How to Segment the Market

Begin with understanding the marketplace and then gather information on the customers perspective
A segment may look desirable in terms of size and growth but be saturated with competitors and not consistent with firm goals

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Identifying best segment to focus marketing efforts

TARGETING

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Evaluation of the Segment. Consider

1. Data to identify segments?

2. Databases to access segments?

3. Profitability?

4. Fit with corporate goals?

5. Actionable?
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MM555 Week 3 Lecture

Segmentation Strategies
Breadth strategy Serve more than one segment Depth strategy Serve one segment well Tailored strategy Different products for different segments

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Targeting Strategic Decisions Decide to.

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

Source: http://acornbbs.com/wp-content/uploads/2011/09/Rebel-Brown-Quote-Positioning.jpg

How to stand stand out from the competition

POSITIONING STRATEGIES
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MM555 Week 3 Lecture

Writing a Positioning Statement

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30.07.2010

Perceptual Map of Kelloggs Products

Premium price
Honey n Oat Bake Sustain All Bran Complete Sultana Bran

Less Nutritious

Coco Pops Frosties Mini Wheats

Nutritious

Nutri-grain Rice Bubbles

Special K Cornflakes

Value for Money

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All 4 Ps Matrix

All 4P combinations are possible

However, some are more optimal than others
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MM555 Week 3 Lecture

Optimal Matches

16 combinations can be reduced to two

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Optimal Matches Aligned with Gurus

The two extremes in the matrix are consistent with management gurus
Treacy and Wiersema 1. Operational excellence (Southwest) 2. Product leadership (Johnson & Johnson) 3. Customer intimacy (Nordstrom) Michael Porter 1. Keeping costs down and prices competitive 2. 3. Leading by differentiation Niche positioning

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STP Process Overview

Communicate to the market

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Textbook Resource: Kotler, Keller, Burton: Marketing Management 2009 Pearson Education Australia

Market Research

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MM555 Week 3 Lecture

Module 3: Learning Objectives Checking In..

1. Define the main steps in designing a customer-driven marketing strategy: market segmentation, market targeting, differentiation, and positioning. 2. List and discuss the main bases for segmenting consumer and business markets. 3. Explain how companies identify attractive market segments and choose a market-targeting strategy. 4. Discuss how companies differentiate and position their products for maximum competitive advantage.

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15 min Break

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Next Steps
Review the Material for Module 4: Consumer Behaviour Complete the required reading:
o Kumar, V., Rajkumar Venkatesan and Werner Reinartz. 2006. "Knowing what to sell, when, and to whom." Harvard Business Review 84 (3): 131137. o Piskorski, Mikolaj Jan. 2011. "Social strategies that work." Harvard Business Review 89 (1): 116-122. o Thomas, Jacquelyn S. 2004. "Getting the most out of all your customers." Harvard Business Review 82 (7/8): 116-123.

Work on Situation Analysis for Applied Project Watch for Announcements Dont forget to Dig Deeper!

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