Poma PPT Slides-Chapter 7-171867

Principles of Marketing: An Asian
Perspective
Instructor Supplements
Created by Geoffrey da Silva
Customer-Driven Marketing Strategy:

Creating Value for Target Customers
2012 Principles of Marketing: An Asian Perspective
Chapter 7 Outline
7.1
7.2
7.3
Market Segmentation
Market Targeting
Differentiation and Positioning
Opening Case
Este Lauder: Catering to Specific Customers
Este Lauder Companies

is an expert at creating
differentiated brands that
serve the tastes of
different market
segments. Its brand
portfolio helps it segment
the market and target
each with a specific value
proposition.
5
7.1
Market Segmentation
7.1
7.1 Market Segmentation
Target marketing
Consumers have such varied

preferences that stores are
offering different brands to
capture their business
7
Steps in Market Segmentation, Targeting and Positioning
Segmentation, Targeting, Positioning and Differentiation

Segmentation:
Targeting:
Identify and describe market segments
Evaluate segments and decide which one to pursue
Positioning:
Design a product and marketing mix to meet the

segments needs
Differentiation:
Differentiate the firms market offering to create

superior customer value
Positioning:
A market offering occupying a clear, distinctive, and

desirable place relative to competing products in the minds of target
consumers.
Reviewing the Key Concepts

Define the major steps in designing a customer-driven marketing
strategy: market segmentation, targeting, differentiation, and
positioning.
10 2012 Principles of Marketing: An Asian Perspective
Segmentation
Through market segmentation, companies divide large,
heterogeneous markets into smaller segments that can be reached
more efficiently and effectively with products and services that
match their unique needs.
Segmenting Consumer Markets

There
is no single way to segment a market.
marketer has to try different segmentation variables, alone and in

combination, to find the best way to view the market structure.
Table
7.1 outlines the major variables that might be used in

segmenting consumer markets.
Here
we look at the major geographic, demographic,

psychographic, and behavioral variables
Geographic segmentation
Geographic
segmentation divides the market into different

geographical units such as nations, regions, states, counties, or cities
Many
companies localize their products, advertising, promotion, and

sales efforts to fit the needs of individual regions and cities.
Unilever practices geographic

segmentation by launching Clear
shampoo specifically for the China
market.
Geographic segmentation Coke

realized that Japanese teenagers did
not like to leave their Coke cans open
when talking on their mobile phones.
The Coke can with a twisted cap that
could be closed after opening was
developed specifically for this market.
Demographic segmentation
Demographic segmentation
Divides the market into groups
based on variables such as age,
gender, family size, family life
cycle, income, occupation,
education, religion, race,
generation, and nationality.
Demographic factors are the most popular

bases for segmenting customer groups.
Age and Life-Cycle Segmentation

Consumer
needs and wants change with age.
Some
companies use age and life-cycle segmentation, offering

different products or using different marketing approaches for
different age and life-cycle groups.
Segmentation by age
Age Segmentation
Baby food makers in Japan are

targeting the ageing market with
appeals such as Fun Meals and
Food for Ages 0100.
Segmentation by life cycle
Segmentation by gender
Gender
segmentation
has long been
used in clothing,
cosmetics,
toiletries, and
magazines.
Gender Segmentation
LOral offers Mens Expert skin care

products and a VIVE For Men grooming
line. Ads proclaim, Now LOral Paris
brings its grooming technology and
expertise to men because youre worth
it too. The upward trend for mens
products in Asia is attributed to Asian
men being more open about their skin
problems. Taiwanese, South Korean, and
Japanese men are especially particular
about skin care. In Malaysia, LOrals
biotherm Homme is targeted at firsttime male white-collar users aged 25 to
39
Gender Segmentation
Nike has stepped up

its efforts to capture
the womens sport
apparel market by
overhauling its
womens apparel lines,
revamping the
Nikewomen.com Web
site, and opening
Nikewomen stores in
several major cities.
(www.Nikewomen.co
m)
Income Segmentation
Income segmentation has long
been used by the marketers of
products and services such as
automobiles, clothing, cosmetics,
financial services, and travel
Credit card companies offer different types of

cards with different perks depending on income
level.
Psychographics Segmentation
Psychographics Segmentation
Psychographic
segmentation divides buyers into different groups

based on social class, lifestyle, or personality characteristics.
Marketers
also use personality variables to segment markets.
Charles & Keith:

Creating a Lifestyle in Fashion
Footwear and Accessories
Segmentation by Behavior
Occasion
Benefit
User status
Usage rate
Loyalty
Behavioral Segmentation
Occasion segmentation means grouping buyers according to
occasions when they get the idea to buy, actually make their purchase,
or use the purchased item.
Benefit segmentation means grouping buyers according to the
different benefits that they seek from the product.
Occasion Segmentation
Indofood, the worlds largest instant
noodle maker by volume, practices
occasion segmentation to create
aspirational noodle eaters. It
promoted a special edition Valentines
Day box noodle set packed in a pink
Chinese takeaway box with cartoon
hearts for decoration. There are also
limited edition Chinese New Year
noodles, packed in auspicious red and
gold; birthday noodles; and noodles
for book launches. Indofood
envisages using other occasions like
weddings, births, and college
graduations to market its products.
Behavioral Segmentation
User Status means segmenting markets into nonusers, ex-users,
potential users, first-time users, and regular users of a product.
Usage Rate means grouping markets into light, medium, and heavy
product users.
Loyalty Status means dividing buyers into groups according to their
degree of loyalty.
36 Presentation Title runs here l 00/00/00
User Status
Blood banks adopt different
marketing appeals to recruit
new donors and to remind
occasional donors. For
example, the Singapore red
Cross launched the Start
your day saving lives
campaign to reach beyond
its regular donor pool, with
creative online tools such as
an eligibility quiz and a
booking calendar, to
encourage youths and
working adults to give blood
for the first time, again, or
as a group.
Loyalty Status
Types of Customer Loyalty
Segmentation: Business Markets
OPERATING CHARACTERISTICS
PURCHASING APPROACHES
SITUATIONAL FACTORS
PERSONAL FACTORS
Segmenting Business Markets

Consumer
and business marketers use many of the same variables to

segment their markets.
Business
marketers also use some additional variables, such as

customer operating characteristics, purchasing approaches, situational
factors, and personal characteristics.
Many
marketers believe that buying behavior and benefits provide the

best basis for segmenting business markets.
Segmentation: Business Markets
For small-business customers, American Express

has created the OPEN: Small business Network,
the one place thats all about small business.

List and discuss the major bases for segmenting consumer and
business markets.
Segmentation: International
GEOGRAPHIC
ECONOMIC
POLITICAL/LEGAL
CULTURAL
Companies can segment international markets using one or a
combination of several variables.
1.Geographic
location: Nations close to one another will have many

common traits and behaviors.
2.Economic
factors: Countries may be grouped by population income

levels, or by their overall level of economic development.
3.Political
and legal factors: Type and stability of government,

receptivity to foreign firms, monetary regulations, and the amount of
bureaucracy.
4.Cultural factors: Grouping markets according to common
languages, religions, values and attitudes, customs, and behavioral
patterns.
Segmentation:
International Markets
Chinese consumers in Beijing may

behave differently from consumers in
Shanghai, Hong Kong, Singapore, and
Taiwan.
Inter-market Segmentation
Inter-market segmentation is the segmenting of consumers who
have similar needs and buying behavior even though they are located
in different countries.
Teens show surprising similarity no

matter where they livethese teens
could be from almost anywhere. Thus,
many companies target teens with
worldwide marketing campaigns.
Useful segments are...
Measurable
Measurable: The size, purchasing power, and profiles of the
segments can be measured.
Substantial
Substantial: The market segments are large or profitable enough
to serve.
Accessible
Accessible: The market segments can be effectively reached and
served.
Actionable
Actionable: Effective programs can be designed for attracting and
serving the segments.
Differentiable
Differentiable: The segments are conceptually distinguishable and
respond differently to different marketing mix elements and
programs.
7.2
Market Targeting
7.2
7.2 Market Targeting
Evaluating segments
Evaluating Market Segments

In evaluating different market segments, a firm must look at three
factors:
Segment size and growth
Segment structural attractiveness
Company objectives and resources
The largest, fastest-growing segments are not always the most

attractive ones for every company.
Evaluating Segments
Convenience store Lawson

changed its merchandise
assortment to meet the
needs of an ageing Japanese
society.
Evaluating Segments
Canon in Singapore
launched a campaign
targeting women, a
potentially growing
segment. The be
Empowered campaign
shows successful female
photographers. Seminars
on photography were
organized solely for
women.
Segment Structural Attractiveness
The company also needs to examine major structural factors that

affect long-run segment attractiveness.
A segment is less attractive if it already contains many strong and
aggressive competitors.
The existence of many actual or potential substitute products may
limit prices and the profits.
The relative power of buyers also affects segment attractiveness.
A segment may be less attractive if it contains powerful suppliers
who can control prices.
Target market
A target market consists of a set of buyers who share common
needs or characteristics that the company decides to serve.
Target Marketing Strategies
Segmentation strategies
Undifferentiated
MARKETING MIX
All buyers in
1 segment
Undifferentiated Marketing
Using
an undifferentiated marketing (or mass-marketing)

strategy, a firm might decide to ignore market segment differences
and target the whole market with one offer.
This
mass-marketing strategy focuses on what is common in the

needs of consumers rather than on what is different.

Segmentation strategies : Differentiated
MARKETING MIX 1
MARKETING MIX 2
MARKETING MIX 3
MARKETING MIX 4
Differentiated Marketing
Using a differentiated marketing (or segmented marketing)
strategy, a firm decides to target several market segments and
designs separate offers for each.
Differentiated Marketing
Toyota practices
differentiated marketing by
offering different car models
for different consumer
segments.
Segmentation strategies
Concentrated
Segment 1
Concentrated Marketing
Using
a concentrated marketing (or niche marketing) strategy,

instead of going after a small share of a large market, the firm goes
after a large share of one or a few smaller segments or niches.
It
can market more effectively by fine-tuning its products, prices,

and programs to the needs of carefully defined segments.
It
can market more efficiently, targeting its products or services,

channels, and communications programs toward only consumers that
it can serve best and most profitably
Concentrated Marketing
AirAsia started as a nicher by

serving Malaysias intrastate
market. As it went international
to regional destinations such as
Thailand, Vietnam, and China,
it outgrew its nicher status.
Micro Marketing
Micro Marketing
Micromarketing
is the practice of tailoring products and marketing

programs to suit the tastes of specific individuals and locations.
Micromarketing
includes local marketing and individual marketing
Local Marketing
Local marketing involves tailoring brands and promotions to the
needs and wants of local customer groupscities, neighborhoods,
and even specific stores
Local Marketing
In Singapore, Japanese
bookstore Kinokuniya carries
more comics at its bugis Junction
store because of the higher
youth traffic; but has more
cultural books at its Ngee Ann
City store because of the more
upmarket clientele.
Drawbacks of Local Marketing

Local marketing has drawbacks :
a)It can drive up manufacturing and marketing costs by reducing
economies of scale.
b)It can create logistics problems.
c)The brands overall image might be diluted if the product and
message vary too much in different localities.
Individual Marketing
Individual Marketing
Individual
marketing is the tailoring of products and marketing

programs to the needs and preferences of individual customers.
Individual
marketing has also been labeled one-to-one marketing,

mass customization, and markets-of-one marketing.
Mass Production versus Individual and Self-Marketing
Mass Production versus

Individual and Self-Marketing
Some vending machines in Japan

employ facial recognition technology to
recommend drinks depending on a
customers age and gender.
Choosing a
Target Strategy
PRODUCT VARIABILITY
PRODUCT LIFE-CYCLE
MARKET VARIABILITY
COMPETITORS MARKETING
Target Strategy

Explain how companies identify attractive market segments and
choose a market targeting strategy.
Socially Responsible Target Marketing

Target
marketing sometimes generates controversy and concern.

Issues usually involve the targeting of vulnerable or disadvantaged
consumers with controversial or potentially harmful products.
Marketers
of a wide range of industries have been criticized for their

marketing efforts directed toward children.
Problems
arise when marketing adult products to kids, whether

intentionally or unintentionally.

The
growth of the Internet and other carefully targeted direct media

has raised new concerns about potential targeting abuses.
The
issue is not so much who is targeted, but how and for what.
Controversies arise when marketers attempt to profit by unfairly
targeting vulnerable segments or target them with questionable
products or tactics.
Socially
responsible marketing calls for segmentation and targeting

that serve not just the interests of the company, but also the interests
of those targeted.
7.3
7.3
7.3 Differentiation and Positioning

Value proposition: How a company will create differentiated value
for targeted segments and what positions it wants to occupy in
those segments.
A products position is the way the product is defined by consumers
on important attributes.
Positioning
Mid-priced Li Nings relative market share.

Thus, customers view the market-leading
Cadillac nationalistic positioning appeals to
Chinese consumers who prefer to buy local
brands
Positioning Map
Perceptual
positioning maps
show consumer
perceptions of their
brands versus
competing products
on important buying
dimensions.
Choosing a differentiation and positioning Strategy
IDENTIFY COMPETITIVE
ADVANTAGES
CHOOSE RIGHT COMPETITIVE
ADVANTAGE
SELECT POSITIONING
STRATEGY
Competitive advantages
Identifying Possible Value Differences and Competitive

Advantages
To
the extent that a company can differentiate and position itself as

providing superior customer value, it gains competitive advantage.
It
can differentiate along the lines of product, service, channel,

people, or image.
Differentiation based on:
PRODUCT
DISTRIBUTION
SERVICES
PEOPLE
IMAGE
Product Differentiation
Seng Choon differentiates itself from

other brands when it claims its Omega 3
eggs contain less cholesterol.
People Differentiation
Singapore Airlines enjoys an

excellent reputation, largely because
of the grace of its flight attendants.
Choosing the Right Competitive Advantages

1.How
Many Differences to Promote?
2.Which
Differences to Promote?
How Many Differences To Promote?

Ad
man Rosser Reeves believes a company should develop a unique

selling proposition (USP) for each brand and stick to it.
Other
marketers think that companies should position themselves on

more than one differentiator.
Unique Selling Proposition
Ariel detergent in India appeals to

more segments by offering
superior cleaning performance as
well as fragrance.
Difference to promote should be:

SUPERIOR
DISTINCTIVE
IMPORTANT
COMMUNICABLE
PREEMPTIVE
AFFORDABLE
PROFITABLE
Which Differences to Promote Important Criteria:

1.Important:
The difference delivers a highly valued benefit to target
buyers.
2.Distinctive: Competitors do not offer the difference, or the
company can offer it in a more distinctive way.
3.Superior: The difference is superior to other ways that customers
might obtain the same benefit.
4.Communicable: The difference is communicable and visible to
buyers.
Which Differences to Promote Important Criteria:

5.Preemptive:
6.Affordable:
7.Profitable:
Competitors cannot easily copy the difference.
Buyers can afford to pay for the difference.
The company can introduce the difference profitably
Choosing the Right Differences To Promote
Targeted at Malay women who do not

want to compromise on their Islamic
values, Safi rania gold is positioned as
a skin care product that uses gold as
an effective skin treatment
ingredient. This positioning worked.
Value proposition
Possible Value Propositions
Value proposition
1.More
for More positioning involves providing the most upscale

product or service and charging a higher price to cover the higher
costs.
2.More
for the Same positioning involves introducing a brand

offering comparable quality but at a lower price.
3.The
Same for Less positioning can be a powerful value proposition

everyone likes a good deal.
Value propositions
4.Less
for Much Less positioning is offering products that offer less

and therefore cost less. Less for much less positioning involves
meeting consumers lower performance or quality requirements at a
much lower price.
5.More
for Less positioning is the winning value proposition.
In the long run, companies will find it very difficult to sustain such
best-of-both positioning.
Value propositions
More-for-less
Nok Airs budget airline fares offer value-for

money positioning.
Developing a positioning statement

Company
and brand positioning should be summed up in a

positioning statement.
The statement should follow the form: To (target segment and need)
our (brand) is (concept) that (point of difference).
Example:
To busy, mobile people who need to always be in the loop, the iPad
is a multi-touch screen wireless connectivity solution that provides
the best way to experience the Web, email, photos, and videos with
just the touch of a finger.
Communicating a position
Communicating and Delivering the Chosen Position

Once
it has chosen a position, the company must take strong steps to

deliver and communicate the desired position to target consumers.
All
the companys marketing mix efforts must support the positioning

strategy.
Communicating and Delivering the Chosen Position

Positioning
the company calls for concrete action. If the company

decides to build a position on better quality and service, it must first
deliver that position.
Designing
the marketing mixproduct, price, place, and promotion

involves working out the tactical details of the positioning strategy
Communicating a position
A possible positioning for the

iPad is that it gives busy,
mobile people who need to
be in the loop, a multi-touch
screen wireless connectivity
solution, providing the best
way to experience the Web,
email, photos, and videos
with the touch of a finger.
Marketing strategies for a more-for-more positioning:

A
firm that seizes on a more for more position knows that it must
produce high-quality products, charge a high price, distribute through
high-quality dealers, and advertise in high-quality media.
It
must hire and train more service people, find retailers who have a
good reputation for service, and develop sales and advertising
messages that broadcast its superior service.
This
is the only way to build a consistent and believable more for

more position.
A companys marketing mix efforts must support the

positioning strategy

Discuss how companies differentiate and position their products for
maximum competitive advantage.
Thank
you

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Principles of Marketing: An Asian

Customer-Driven Marketing Strategy:

2012 Principles of Marketing: An Asian Perspective

2012 Principles of Marketing: An Asian Perspective

Este Lauder Companies

2012 Principles of Marketing: An Asian Perspective

2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Consumers have such varied

2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Steps in Market Segmentation, Targeting and Positioning

2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Segmentation, Targeting, Positioning and Differentiation

Identify and describe market segments

Evaluate segments and decide which one to pursue

Design a product and marketing mix to meet the

Differentiate the firms market offering to create

A market offering occupying a clear, distinctive, and

2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Reviewing the Key Concepts

10 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

11 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Segmenting Consumer Markets

is no single way to segment a market.

marketer has to try different segmentation variables, alone and in

7.1 outlines the major variables that might be used in

we look at the major geographic, demographic,

12 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Segmenting Consumer Markets

13 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Segmenting Consumer Markets

14 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Segmenting Consumer Markets

15 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

16 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

segmentation divides the market into different

companies localize their products, advertising, promotion, and

17 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Unilever practices geographic

7.1 Market Segmentation

Geographic segmentation Coke

7.1 Market Segmentation

20 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Demographic factors are the most popular

21 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation

Age and Life-Cycle Segmentation

needs and wants change with age.

companies use age and life-cycle segmentation, offering

22 2012 Principles of Marketing: An Asian Perspective

7.1 Market Segmentation