10/3/2009

Chapter-5: Segmentation, Targeting and Positioning

Lecture-6

Course: Promotional Management MKT-337 Faculty: Abdullah Al Faruq (Afq)

North South University

Introduction
Segmentation - A process of breaking a market of varied customers into subgroups of customers that have similar needs, desired product benefits, and purchase behavior. Targeting - The process of evaluating each market segments attractiveness and selecting one or more segments to enter. Positioning - The process of prompting buyers to form a particular mental impression of your product relative to its competitors.

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Why is Segmentation Important?

Segmentation provides three benefits to the advertiser namely: a. More efficient use of resources Every advertiser has finite resources that they need to use effectively and efficiently to produce greater results. By segmenting the market advertiser can get more from their investments because good targets/customers are more receptive than the market as a whole. By segmenting the market an advertiser can develop better understanding of the market/customer needs and demand and develop promotion mix accordingly.

b. Better understanding of customer needs -

c. Better understanding of the competitors - By segmenting the market an advertiser can develop better understanding of the competitors/rivals so that they can develop their strategies to compete effectively and efficiently.

How do Advertisers Segment Markets?

Advertisers segments a market by way of demography; geography; psychographic. Demographic Segmentation - A process of segmentation whereby, advertisers uses characteristics arising from demographic characteristics of the market. - The characteristics includes age, gender, race, household type, home-ownership, education, employment and income. Geographic Segmentation - The process of segmentation that identifies audiences segments based on geographic boundaries. Psychographic Segmentation - The process of segmenting the market according to psychographic characteristics like motivation, attitude, lifestyle, personality, behavior, brand loyalty.

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Targeting an Attractive Segments

An advertisers considers four factors in targeting an attractive segments namely:

a. Profitable opportunities: The market segments must offer

opportunities to make bottom-line/profit. The segment has to be large enough to upset your cost and allow you to plough back cost and generate profit. growth in terms of market share and market size.

b. Growth potential: The segment has to have a potential of c. Acceptable risks: The segment that the advertiser is

targeting and the risk involved in choosing and targeting must be acceptable at a level that the advertiser can manage.

d. Acceptable entry and exit barrier: The advertiser look

towards factors comprising of the entry barriers and exit barriers. If both are low then advertiser chance of selecting the segment is high.

Target Marketing Options

Advertisers can choose four basic categories of target marketing:

a. Un-differentiated marketing: The basic target marketing

whereby advertiser target the mass-market and design the advertising campaign suitable for the vast majority of the g p g j y population.

b. Differentiated marketing: A target marketing strategy whereby

advertiser target several market segments by providing same group of products. Therefore, advertising campaign is undertaken that multiple segment group can understand. target segment and design the advertising campaign accordingly.

c. Concentrated marketing: Whereby, advertiser picks a single

d. Individualized marketing: Every customer is treated as unique

target segment and advertising campaign is design that best suits the unique customer only.

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Positioning: Moving into Audience Mind

Advertising plays a very vital role in positioning a product/service in the minds of the consumer. Advertising campaign is designed to send in messages in relation to product/service that create an unique position in their minds such that b h h i i d h h by hearing the name of the product an i h f h d audience can think of features and benefits in relation to the product or service.