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o Segmentation and Targeting.
o Discuss what segmentation approaches would be used to derive potential segments
o Once the potential segments are derived, discuss what criteria for evaluating the
segment attractiveness have been used to select the final/chosen segment(s). Clearly
substantiate the criteria that you have chosen and use available statistics on market size,
market growth and etc.
o How will you target the chosen segment(s) and what targeting strategy will be used and
why?
References and Writing Style
References
Proper references are required for the final project. This includes in-text citations in the body of
the paper where necessary and a list of references at the end of the paper.
All references are in APA format.
You can use referencing feature from Microsoft Word. Please follow this link:
https://support.office.com/en-us/article/Create-a-bibliography-17686589-4824-4940-9c69342c289fa2a5 (if this link is no longer valid, use Google to search for the topic)
You do not need to and do not quote from the textbook that is being used for this semester, as I
am your target audience!
Using References
Do not string together references and let them overshadow your writing!!!
References are used strategically to strengthen your arguments. You should develop your ideas
and supporting arguments first, and then insert appropriate in-text citations to reinforce
your ideas.
Writing Style
The final report should be written in formal writing style.
The formal and impersonal nature of reports can be achieved by avoiding certain types of
language such as slang terms and contractions (didn’t, won’t etc) as well as strong expressions of
opinion and attitude. Contractions are reserved for quotes only.
In addition, the use of the passive voice (were specified, it is suggested, and etc) allows writers to
foreground what was done, rather than who did it, thus making the writing less personal. A more
objective, impersonal tone is achieved through the use of formal and impersonal language.
Some examples of expressions you may use in your report include:
This research indicates…
The results suggest…
Conclusions that can be drawn are..
The company decided to…
The product was created to…
The target customers are…
Based on the segmentation approaches, the potential segments are…
The following recommendations are made…
Format for Effective Writing: Include
Use subheadings to divide sections.
Use paragraphs to accentuate ideas. Each paragraph should contain elements in this order:



State the claim of your arguments or your choice/recommendation;
Substantiate them with materials in the case or additional research if applicable;
Draw conclusion summarizing your arguments.
The paragraph should not be over 80 words or about 6 or 7 lines to facilitate comprehension.
If the paragraph ended up being too long, break the sets of ideas down and develop shorter
paragraphs for each set of ideas.
Tables, Graphics, and Figures
Use relevant and appropriate graphics to jazz up the cover page of the report.
Tables, graphics and photos are placed immediately after where they are first referred to in the
body of the text. The reader should also be referred (by number) to the diagrams at the
appropriate time in the text and the most important features pointed out to them. Tables, and
graphics and photos (called figures), should be sequentially numbered.
Titles for tables are centered above the table. Titles for figures are centered below the graphic.
The source of the table or figure should also be included. The source is usually in a smaller font
(e.g. 10 point) and aligned on the left hand margin under a table, and under the title of a figure.
APPENDIX/APPENDICES
The Appendix/Appendices contain important data, explanatory and illustrative material not
included in the text.
Fonts and Spacing
In general, use a ‘serif’ font (such as ‘Times New Roman’). They are more comfortable to read.
Fonts should be a minimum of 12 point and 1.5 line spacing is recommended unless otherwise
specified. Titles and headings may be in a bold ‘sans serif’ font (such as ‘Ariel’). A blank line,
but no indentation, is used between paragraphs.
Segmentation, Targeting
Quiz yourself
• How does a firm decide what type of
segmentation strategy to use?
• What are the different ways of describing a
segment?
• What is targeting?
• What is positioning, and why is it important?
• How do perform a perceptual map?
• What is a positioning statement?
• What are the key components in a
positioning statement?
STP PROCESS
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
SEGMENTATION APPROACH
Focus on customers’ benefits (gains),
removing (pains) and satisfying their needs
Underlying premises:
• Customers seeking benefits that products provide, not
necessarily the physical products
• Benefits are understood/experienced under certain
contexts/usage occasions. Therefore, different usage
contexts require different benefits, thus different
“use/benefit” market segments. E.g. Same customer
might need different things in the morning, at home, or
out having fun, same customer.
TRADITIONAL APPROACHES
TO SEGMENTATION
Segmentation is about identifying basis (buyer characteristics)
and subdivide market based on market potential.

Geographic segmentation is based on regional variables such as
region, climate, population density, and population growth rate. E.g.
Quaker instant oatmeal for regions with colder climate.

Demographic segmentation is based on variables such as age,
gender, ethnicity, education, occupation, income, and family status.
E.g. Tampax sells feminine hygiene products targeting female.

Psychographic segmentation is based on variables such as values,
attitudes, and lifestyle. E.g. Oprah Winfrey made a deal with Kraft
Heinz to launch Mealtime Stories “ready-to-eat” meals targeting
singles and families who desire healthier meals.

Behavioral segmentation is based on variables such as usage rate and
patterns, price sensitivity, brand loyalty, and benefits sought. E.g.
Sensodyne for sensitive teeth. Iphone 8 for high-end customers.
QUESTONS ABOUT POTENTIAL SEGMENTS
• Who are the buyers and users of the product or
service?
• What benefits are they looking for?
• Who are the largest buyers?
• What potential customers can be identified?
• How does the market segment?
• How should the market be segmented?
Use a descriptor for each potential segment so you can visualize who they are
and what they want in terms of benefits, e.g. avid reader, commuter, and etc. for
potential segments of an e-book reader.
Use the segmentation methods to find descriptive words and adjectives for
constructing the descriptor.
STARBUCKS COFFEE
SEGMENTATION FOR STARBUCKS
STARBUCKS
Demographic
Age 16-34
Mid to higher income
Students
Professionals
Geographic
High density areas
High foot traffic locations
Psychographic
Mindset of young optimism
Value premium quality and freshness
Behavior
Value social interactions,
Regular, and comfortable experience
POTENTIAL SEGMENTS
STARBUCKS
Commuters
Traveling from point A to B:
Heading to and back from work
Out for a break or lunch
Captive customers
Stuck in a campus environment:
school, corporate campuses, and
special events, etc.
DIY (convenience)
Capsules, “instant coffee and ready
made” on supermarket shelves
DETERMINE SEGMENT ATTRACTIVENESS
Use these evaluative criteria to select chosen segment(s) from potential segments




Identifiable: size of segments
and purchasing behaviour
must be quantifiable
Reachable: have information
about the segments,
segments can be served and
reached with marketing mix
efforts
Substantial and profitable:
segment is economically
viable, profitable and
sustainable
Differentiated/Response:
segments are differentiable,
and possible to design
different and effective
marketing program for a
specific segment
TARGETING STRATEGY
Target customers with compelling message(s) and desried product (s)
• Undifferentiated marketing: a single product for the
entire market (e.g. sugar) and good when there is
little competition in the market.
• Differentiated marketing: a multiple segment
targeting strategy where product are modified for
various segments (e.g. Colgate toothpaste).
Different strategies for different segments. Can be
costly and lose focus when serving many segments.
• Concentrated marketing: a single segment/niche
strategy where company focuses on a well defined
segment (e.g. Fortune magazine). Good option
when competing against larger firm.
POSITIONING
Develop a product/brand image
A process of defining the marketing mix variables so that target
customers have a clear, distinctive, desirable understanding of
what the product does or represents in comparison with
competing products. To achieve that, you will need to:
– Determine the customers’ perception of product or service
– Identify a competitive advantage over competitors via some
form of differentiation
– Choose a single unique value proposition for each brand to
highlight the competitive advantage
– Communicate and deliver the chosen position to the target
customers based on description of segment, product or
brand benefits
Competitive
advantage –
benefits
better than
those of the
competitors’
Unique Value
Proposition
– Key benefits
(Brand)
Positioning
Communicate
Customer’s
Perception–
As Key benefits
PERCEPTUAL MAPS
• Perceptual mapping to graphically represent
consumers’ perceptions of alternative offerings.
• Usually confine to two or three (3D) determinant
attributes (dimensions): attribute rating
• Use maps to plot strategy: e.g. position against
a market leader, reinforce positioning, or
repositioning if current positioning is not longer
effective.
QUESTIONS TO ASK:
Based on the attributes:
•What is my competitive advantage?
•What is my value proposition?
•Is my product at the ideal point?
•Where is the market leader?
•How does my product fare compared to the leader’s?
•Do I need to adjust my positioning?
•If so, where to on the perceptual map?
•What is then my ideal positioning?
•What would be my positioning statement?
•What slogan would I use to target my customers?
WHAT’S YOUR COMPETITIVE ADVANTAGE?





value (e.g. Target)
symbol (e.g. Rolls Royce)
specific product attributes (e.g. Nantucket juice)
specific benefits (e.g. safest car, Volvo)
usage occasions (best application for cold, e.g. Vicks
VapoRub)
• certain classes of user (e.g. Apple for graphic
design)
• quality/price (e.g. Chanel No. 5)
• against or away from a competitor (e.g.7
Up at the unCola)
• for different product classes/categories
(e.g. xerox means photocopy)
VALUE PROPOSITION
How does the product compares to those of the competitors’?
Three ways to position an offering (for product comparison):
1.Unique
2.Difference
3.Similarities
(“Only product/service with XXX”)
(“More than twice the

  • vs.
    [competitor]”)
    (“Same functionality as [competitor];
    lower price”)
    Five ways to articulate the value proposition (for
    comparing value to price):
    1.More for more (Mont Blanc, most luxury goods)
    2.More for the same (Toyota Lexus over Mercedes)
    3.More for less (Wal-mart, well known brand for less)
    4.The same for less (Panasonic TVs)
    5.Less for much less (Airline not serving food)
    PERCEPTUAL MAP FOR COFFEE
    Product attributes
    http://andrewswritingsamples.wordpress.com/category/marketing/
    POSITIONING STATEMENT
    • Target Audience – the attitudinal and demographic
    description of the core prospect to whom the brand is
    intended to appeal; the group of customers that most
    closely represents the brand’s most fervent users.
    • Frame of Reference – the category in which the brand
    competes; the context that gives the brand relevance
    to the customer.
    • Benefit/Point of Difference – the most compelling and
    motivating benefit that the brand can own in the hearts
    and minds of its target audience relative to the
    competition.
    • Reason to Believe – the most convincing proof that the
    brand delivers what it promises.
    Template for a Positioning Statement:
    For (target audience), (brand name) is the (frame of reference) that delivers
    (benefit/point of difference) because only (brand name) is reason to believe).
    POSITIONING STATEMENT
    e.g. Target
    To value conscious customers of all income levels. Target
    is the brand of discount retailer, that delivers great design
    at reasonable prices.
    It is an internal statement, that can guide advertising
    strategy, slogan and tagline.
    :
    EXPECT MORE,
    PAY LESS
    POSITIONING STATEMENT
    e.g. Home Depot
    To value conscious DIY and professional customers,
    Home Depot is the brand of home improvement
    business, that provides excellent customer service, with
    broadest product selection at most competitive prices.
    It is an internal statement, that can guide advertising
    strategy, slogan and tagline.
    MORE SAVING,
    MORE DOING
    POSITIONING STATEMENT
    e.g. Nyquil
    To adults suffering from a variety of cold and/or flue
    symptoms, Nyquil is the original soothing nigh time cold
    medicine that effectively relieves symptoms so you can
    sleep through the night.
    It is an internal statement, that can guide advertising
    strategy, slogan and tagline.
    WE’LL HELP YOU SEIZE THE NIGHT;
    TOMORROW IS UP TO YOU
    COMMUNICATE TO THE CUSTOMERS
    Consolidation or
    re-position
    (Market leader)
    Challenger
    (De-position)
    Follower
    (Association)
    Attributes
    BMW (ultimate
    driving machine)
    7-Up (The uncola)
    Lexus (the relentless
    pursuit of perfection)
    Price/quality
    DeBeers (A diamond Greyhound (Leave
    is forever)
    the driving to us)
    Ford (quality is job
    one)
    Competition
    Ebay (the world’s
    online market place)
    Wendy (Where’s
    the beef)
    Burger King (Have it
    your way)
    Application
    Ipod (1000 songs in
    your pocket)
    Cingular (Raising
    the bar)
    Wisk laundry
    detergent (Ring
    around the collar)
    User
    Rolex (obsession
    with perfection)
    Mazda (Zoom
    Zoom)
    Timex (Takes a
    licking and keeps on
    ticking)
    Product
    class
    A1 steak sauce
    (Yup, it’s that good)
    Pork (the other
    white meat)
    Hyundai Sonata
    (Drive your way)
    EFFECTIVE POSITIONING
    • Substantive “brand” value (has meaning both
    internally and to customers)
    • Consistency
    – Internally (all parts working together to
    reinforce perception about brand)
    – Over time (perception reinforcement persists
    over duration of weeks, months, …)
    • Simplicity (easy to remember, encapsulate the
    essence)
    • Distinctiveness (competitive advantage over
    competitors’ offerings)

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