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Marketing (Fach) / Strategy and Segmentation (Lektion)
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- occasions for purchase (4) usage segmentation- heavy, light, and non-users segments- eg advertising for bourbon whiskey benefit segmentation - 'benefit sought'- underlying reason of attraction- conjoint analysis makes it particularly useful in marketing- eg. different hair shampoos for all benefits- very useful behavioral segmentation- best starting point for segmentation- based on knowledge, attitudes, uses, responses concerning a product/service- eg: Cadbury chocolate - for all circumstances 3 key segments for chocolate confectionery - take home (more rational) - gift (for all occasions) - impulse (place at cash) Innovators- important when launching new products initial purchases- not generalizable: look separately for every field- opinion leaders: eg DJs also: - identify segments with high brand loyalty- identify and target non-brand-loyal segment Example:Cola-Cola and its subbrand target every occasion based drink imaginable
- segmenting business markets (B2B) - overview the hierarchical approach the nested approach what are segments and 'good' segments in B2B?
- segmenting (screening) international markets and countries - overview selecting target countries selecting global segments governmental buying and segmentation targeting strategies positioning strategy difficulties of implementing segmentation in the organization
- segmenting business markets (B2B) - overview many of the same variables as B2Cgeographically, demographically (industry, company size), benefit sought, usage rate, user status, loyalty status+ additional variablespurchasing approaches, customer operating characteristics, situational factors, personal characteristics - the hierarchical approach - the nested approach - what are segments and 'good' segments in B2B?
- the hierarchical approach to B2B segmentation Wind and Cardozo 1974 + less total research by passing two stages, companies that may have no use will be eliminated at the first stagegiven a generic product/service Info for step 2 will come primarily from the sales force analysis 1. Macro-segmentation a) identify segments- size- usage rate- application of product- SIC category, end market served- organizational structure- location- new vs. repeat purchase ↓b) select a set of acceptable macro segments 2. Micro-segmentation a) evaluate each - distinct responses to the firm's marketing stimuli? yes? - stop and use the segment no? - go to b) b) identify the relevant micro segments - homogenous response based on key DMU charachteristics- criterias to chose among different suppliers- position of DMU in authority and communication networks of firm- personal characteristics - demographic, personality- percieved importants of specific determinants ob buying decision- attitude towards vendors- decision rules targeting - select a segment identify the complete profile of the segment based on the organizational and DMU characteristics
- the nested approach (5) Shapiro and Bonoma 1984 - goes even further than the hierarchical approach 5 nests outer = macro criteria demographics operation variables purchasing approach situational factors personal characteristics inner = microcriteriaa
- nested approach - demographics outermost nest useful starting point demographic factors - industry type- customer size and location- customer technology and capabilities- different purchasing policies- situational factors including product application highly important: industry type - SIC (standard industry classification)hospitals and retailers both buy computers, but very differently sizedifferent preferences, buying patterns and so on!
- nested approach - operating variables (3) 2nd nest generally stable criteria - technology- user/non-user status (by product or brand)- customer capabilities (operating, technical, financial) high technology business demands high technology supplier!
- nested approach - purchasing approach (5) mid nestmost neglected but important! - formal organization- power structure- nature of buyer-seller relationship- purchasing policies- purchasing criteria example:centralized vs decentralized puchasing-> requires seller to have more national or intenational account managers or to have more extentsive field sales force
- nested approach - situational factors 4th nest - now focusing on tactical role more than on grouping firms temporary, require more detailed knowledge - dividing customerseg. those who want single supply sources vs those who want to dual-source important suppliers - dividing by product applicationeg. importance of the tasked performed by the product/service - dividing DMU different perceptions within DMUs
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- nested approach - buyers' personal characteristics People not companies make decisions! - buyer/seller similarity technology, corporate culture, or even size- buyer motivation some shop around other keep strictly to organizational rules- buyer risk perception personal style, intolerance of ambiguity, self-confidence and status,
- segments - good segmentation technically = grouping similar customers statistically =- minimize intragroup variance- maximize intergroup variance
- selecting target countries top-down screening 3 steps one alert screening process = top-down model: filter out less desired ones 3 steps to filter 1. macro level - basic opportunities and risks GDP, political instability, etc 2. potential market sizeand acceptance of the productproxy variables = similar or relatied product that indicates demand 3. micro levelcompetitors, ease of entry, profit potential Alert: Dismissed country can be top next year 2 common errors:ignore countries with potentialspend too much investigation in poor countries
- selecting global segments B2B bottom up approach increasingly global - shift from domestic perspective to wold perspective! consider:- global segments- regional segments- segments withtin countriesproblems/considerationmode of entrymajor problem: creation and maintaince of huge databases of global firms but also without databases about countries assessment is possible:3 bottom up steps1) segmentation of the market in each country (by mode of entry)2) cluster selected segments - group similar countries3) create a global portfolio based on these clusters
- targeting strategies (3) undifferentiated target marketing differentiated target marketing concentrated target marketing
- positioning stategy = place a product occupies within a consumers mind relative to competing products or services example instant coffee2 important attributes: taste and price high price low in flavor high in flavor low price - maintain distance to competitors = be distinctive- chosen position enough customers?- tackle competition or not?- what are our objectives for the brand (keep in mind the brand image) other option: decaffeinated!
- value positioning entire positioning of a brand Why should I buy your brand? BMW = 'ultimate driving machine'
- difficulties of implementing segmentation in the organization 3 main problems 1. Infrastructure barriers inapropriate/inflexible structure or people lack of commitment, financial lacks etc 2. segmentation process issues lack of practical advice/help 3. implementation barriers practical and operational concerns that make it difficult (normal in real life companies) what to do?allocate the resources! skilled personnel and suited resources to operate..
- skimming vs penetrating table marketing mix: price and promotion promotion high low high rapid skimming slow skimming NIKE price low rapid penetration slow penetration Ryanair own-label brands