Fourth seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics, http://www.hhs.se/EDUCATION/MSC/MSCGM/Pages/default.aspx
1. Seminar 4
Managing Marketing Processes
----
Identifying Market Segments and Targets:
Exploring Segmentation, Targeting, and
Positioning
Robin Teigland
Master of General Management
Stockholm School of Economics
September 10, 2013
2. Seminar 4 Overview
Marketing Plan Group Assignment
Aqualisa Quartz Case
STP
2
4. A marketing plan ≠ A business plan
4
Wide overview of
business, eg mission,
goals, strategy, staff,
operations, location,
marketing, financial
Often used as
financial tool to see if
business viable
Business Plan
Marketing Plan
Details actions to fulfill
mission and goals.
Identifies business price
points, target markets,
and competition and
explains how business
generates customers
http://smallbusiness.chron.com/difference-between-marketing-business-plan-1682.html
But they are
interdependent!
7. Marketing Plan Group Assignment
Assume role of a “marketing manager” and
select an existing Swedish company within a
specified industry
Develop a marketing plan for a product or
service not currently offered by your company to
be launched on the Swedish market
Completely new-to-the-world or can be new just to
your company.
Write a comprehensive marketing plan profiling
the competitive strategy to bring that product or
service to the Swedish market.
7
8. 75–80%75–80% of new products being launched fail.
Common reasons are:
The idea is good, but the market share isThe idea is good, but the market share is overratedoverrated..
The product itself is not developed enough.
The new product is badly positioned on the market, not
well-known enough, is priced too high or has the
”wrong” packaging.
The management wants to see their favourite ideas
become products against all market research.
Developing costs are higher than anticipated.
Competitors put up more of a fight than anticipated.
GfK 2012
9. Marketing Plan Teams
9
MGM MARKETING - MARKETING PLAN
FALL 2013
GROUPS PREFERENCES COMPANY
DRAGON B2C (Fortune 500) Product H&M
OPERATION BRAHMA B2B SME (<250) Product VETROLIFE
ORANGE B2C SME (<250) Product ASSESSIO
PEAK PERFORMANCE B2B SME Service TENANT & PARTNER
THE MOJITOS B2C (Fortune 500) Service SPOTIFY
THE TRANSFORMERS B2C SME Services LINAS MATKASSE
10. Presentations
September 13, 9:15-12:00 Initial Presentation
Max 10 minute presentation by each Team
5 minutes for discussion by Feedback Team
Upload Feedback1_Team#.doc to Courseweb and
email to respective team by September 13, 17:00
September 26, 9:15-13:00 Final Presentation
Max 10 minute presentation by each Team
5 minutes for discussion by Feedback Team
Upload Feedback2_Team#.doc (3 page max Word
doc) to Courseweb and email to your respective team
by September 27, 17:00
11. Passport Gmid
Euromonitor International
Global Market Information Database
Market statistics on industries, countries and
consumers (8 million +)
Market reports, company reports and
country reports (18 000 +)
Excellentresource!!
12. Final Report – October 4, 17:00
15 pages Plan + 3 pages Accounting Appendix in MS Word Doc
Not including title page, executive summary, table of contents, references or other
appendices
Single-spaced, 12 Times Roman, numbered pages, 2.54 margins
All sources documented in proper manner
See www.plagiarism.org for more information on how to cite and document sources.
The marketing plan is evaluated according to three criteria:
Professional Written and Oral Communications
Critical Thinking Involving Analysis and Understanding of Theoretical Concepts and
Frameworks that Build Your Argument
Creative and Original Content yet Feasible Plan
Integration with Using Accounting Reports
Separate 3 page Appendix evaluating financial consequences of proposed
marketing plan: detailed month-to-month analysis of impact on company’s financial
statements and quantitative evaluations of the proposed investment using capital
budgeting techniques covered in “Using Accounting Reports”.
Each group member contributes to the assignment in fair proportion
12
13. Independent Research – Get Started Now
Start researching
Use library’s databases and library staff
Determine what data you need to collect and how
Databases, Qualtrics, focus groups, interviews, etc.
Contact any relevant people
Follow related topics on twitter: marketing, industry
product, etc.
Blog, tweet, post, etc. about what you find
#SSEMGM2013
Share with one another!
13
14. Swedish Company and Industry Info
International: Orbis and Factiva
Swedish specific (In Swedish): Retriever and
Affärsdata
Under Company Databases in library
Company information, e.g., annual reports for past 10 years
Similar in number of companies in database
Retriever is more user friendly than Affärsdata
Own sector classification vs SIC for Affärsdata
Can filter search better
Creates reports in PDF or Excel
Both have extensive news/article database
Affärsdata has better coverage, e.g., Veckans Affärer
Retriever has Svenska Dagbladet och Dagens Industri
14
16. Friday Assignment – Marketing Plan
What do you think the marketing plan needs to accomplish in order to lead
the company closer to its strategic goals?
Develop an initial idea for a product/service that you would like to launch
for this company on the Swedish market. Motivate your choice of this
product.
What do you need to do to develop an understanding of the markets and
potential customers of your product? What market research do you need to
conduct? What steps will you take to do this?
What are your initial ideas for STP for this product?
What are your next steps in order to plan the direction, objectives, and
marketing support for the marketing plan?
16
17. Seminar 4 Overview
Marketing Plan Group Assignment
Aqualisa Quartz Case
STP
17
18. Aqualisa
What is the Quartz value proposition to plumbers? To
consumers?
Why is the Quartz shower not selling?
Aqualisa spent three years and €5.8 million developing the
Quartz. Was the product worth the investment? Is Quartz a
niche product or a mainstream product?
What should Harry Rawlinson do to generate sales
momentum for the Quartz product? Should he change his
marketing strategy to target consumers directly, target the
DIY market, or target developers? Should he lower the price
of the Quartz? Or should he do something different
altogether?
18
19. Seminar 4 Overview
Marketing Plan Group Assignment
Aqualisa Quartz Case
STP
19
32. Rising Interest in Ethnography
“Ethnography or observational research has
drawn significant attention recently, not only in
the market research and marketing fields but in
the mass media as well …all starts by doing
something simple – keenly watching
consumers, fact to face, knee to knee and
listening, with ears, eyes, heart, brain and your
intuitive sixth sense.”
Procter & Gamble
ex-CEO A.G.
Lafley
Tesco: http://www.youtube.com/watch?v=fGaVFRzTTP4
33. CHP: 8&10-33
Behavioral Segmentation
Decision Roles
Initiator
Influencer
Decider
Buyer
User
Behavioral Variables
Occasions
Benefits
User Status
Usage Rate
Buyer-readiness
Loyalty Status
Attitude
36. CHP: 8&10-36
Segmenting for Business Markets
Demographic segmentation
– Industry, company size, location
Operating variables
– Technology, usage status, customer capabilities
Purchasing approaches
– Purchasing-function, power structure, nature of
existing relationships, general purchase policies,
purchasing criteria
Situational factors
– Urgency, specific application, size of order
Personal characteristics
– Buyer-seller similarity, attitudes toward risk, loyalty
37. CHP: 8&10-37
Size, purchasing power, profiles
of segments can be measured.
Segments can be effectively
reached and served.
Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
Segments must respond
differently to different marketing mix
elements & programs.
Effective programs can be
designed to attract and serve the
segments.
Effective Segmentation Criteria
38. CHP: 8&10-38
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
39. CHP: 8&10-39
Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze current sales, growth rates and expected
profitability for various segments.
Segment Structural Attractiveness
Consider effects of competitors, availability of
substitute products and, the power of buyers &
suppliers (five forces).
Company Objectives and Resources
Company skills & resources needed to succeed in
that segment(s).
Look for Competitive Advantages.
40. CHP: 8&10-40
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 2
Company
Marketing Mix 3
Company
Marketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Market Targeting
Market Coverage Strategies
43. CHP: 8&10-43
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
44. Diffusion of Innovation - Rogers
44http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png
45. Crossing the Chasm - Moore
45http://www.10xfactor.com/Bookstore_Ten_Best_Book5.html
46. Seminar 4 Overview
Marketing Plan Group Assignment
Aqualisa Quartz Case
STP
46
Notes de l'éditeur
Tieto Enator Vision: - The world's leading provider of high-value-added IT services in selected vertical markets Strategy: - Global leverage of vertical expertise - Solutions - Partnerships Mission: - Building the Information Society Values: - Customer benefit & Personal growth Banking & Insurance IT services for banking, finance and insurance Telecom & Media IT services for telecom and media industry Healthcare & Welfare IT services for healthcare and welfare Government, Manufacturing & Retail IT services for central and local government, manufacturing, retail and logistics Forest & Energy IT services for forest and energy industries Processing & Network End-to-end processing and network services
Wide overview of business, which includes information on staff, operations, location, marketing and financial aspects, as well as clearly outlined mission and goals. Often used as financial tool, business plan provides lenders with necessary details to determine if business is viable, financially sound and able to repay. Although business plans are most commonly known for assisting new businesses, they should be used throughout the life of the business. Not only does it help to develop competitive strategies, the business plan can determine if the business actual activity matches the forecasted plans.
Pick an individual product or service (existing, or one that you have invented), and write a comprehensive marketing plan profiling the competitive strategy that is needed in order to bring that product or service to the market.
From wikipedia VALS ("Values, Attitudes and Lifestyles") is a proprietary research methodology used for psychographic market segmentation . Market segmentation is designed to guide companies in tailoring their products and services to appeal to the people most likely to purchase them. VALS was developed in 1978 by social scientist and consumer futurist Arnold Mitchell and his colleagues at SRI International . It was immediately embraced by advertising agencies, and is currently offered as a product of SRI's consulting services division. VALS draws heavily on the work of Harvard sociologist David Riesman and psychologist Abraham Maslow. [1] Mitchell used statistics to identify attitudinal and demographic questions that helped categorize adult American consumers into one of nine lifestyle types: survivors (4%), sustainers (7%), belongers (35%), emulators (9%), achievers (22%), I-am-me (5%), experiential (7%), societally conscious (9%), and integrated (2%). The questions were weighted using data developed from a sample of 1,635 Americans and their partners, who responded to an SRI International survey in 1980. [2] The main dimensions of the VALS framework are primary motivation (the horizontal dimension) and resources (the vertical dimension). The vertical dimension segments people based on the degree to which they are innovative and have resources such as income, education, self-confidence, intelligence, leadership skills, and energy. The horizontal dimension represents primary motivations and includes three distinct types: Consumers driven by knowledge and principles are motivated primarily by ideals . These consumers include groups called Thinkers and Believers. Consumers driven by demonstrating success to their peers are motivated primarily by achievement . These consumers include groups referred to as Achievers and Strivers. Consumers driven by a desire for social or physical activity, variety, and risk taking are motivated primarily by self-expression . These consumers include the groups known as Experiencers and Makers. At the top of the rectangle are the Innovators, who have such high resources that they could have any of the three primary motivations. At the bottom of the rectangle are the Survivors, who live complacently and within their means without a strong primary motivation of the types listed above. The VALS Framework gives more details about each of the groups. Psychographic segmentation has been criticized by well-known public opinion analyst and social scientist Daniel Yankelovich, who says psychographics are "very weak" at predicting people's purchases, making it a "very poor" tool for corporate decision-makers. [3] VALS has also been criticized as too culturally specific for international use. [4]