1. Welcome to MKT 100-021Week 8 – Segmentation,Targeting & Positioning Anthony Francescucci Assistant Professor, Marketing Please ensure all electronic devices are in “silent mode”, “vibrate mode” or “turned off” 1

2. Agenda 2

3. Consider this Scenario 3

4. What are your 3 most important? 4

5. Effective Marketing Requires… 5

6. These words are not interchangeable 6

7. Market & Segment Differ 7

8. Grouping Customer needs & Wants Start by understanding different needs & wants in overall market or sector 8

9. Preference Patterns to segment Needs 9

10. Market Segments are; 10

11. people in a population to be grouped / segmented 11

12. Bases of Grouping - Shape 12

13. Bases of Grouping - Colour 13

14. Bases of Grouping- Size 14

15. Bases of Grouping- Size & SHAPE 15

16. Bases of Grouping- SHAPE & COLOUR 16

17. 17

18. Effective Bases of Segmentation 18

19. seGMENTATION OF pda Preferences $599 $599 $680 High Low Cost iphone BB 8800 BB Storm ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ iphone BB Storm Curve 8900 ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ BB Pearl $499 ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ BB Curve Low Low High Ease of Use BB Curve BB Pearl 19 $449

20. segmentation Start with common Needs & Wants within market, then layer in geog-, demo-, psycho-graphic and behavioural characteristics 20

21. Layer in other segmentation variables 21

22. Behavioural Segmentation 22

23. Segmentation Example Overall Market Demo- graphics 23 Segment Needs

24. Segmentation Example Overall Market Demo- graphics Segment Needs Target Market 24

25. Business segmentation Similar to consumer segmentation in that you start with common needs or wants 25

26. Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics 26

27. Segmentation Process Consumer & Business 27

28. Steps in Segmentation Process Marketing-Mix Strategy Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test 28

29. Positioning strategy Developing & Communicating 29

30. Positioning 30

31. Developing a positioning statement 31

32. Differentiation “No Company can win if its product and services resemble every other product and offering” (Kotler et al. 2009, pg. 10) 32

33. Why differentiate? To avoid the commodity trap, marketers must start with the belief that you can differentiate anything. 33

34. Differentiation Strategies Features Salespeople Performance Cost Cust. Service Durability Tech Support Style, Design Repair Team Ease of Order Delivery Install Maintenance Character & Value Prop Coverage Distinctive Way Expertise Emotional Power Performance 34

35. Developing a positioning statement 35

36. Let’s look at a Positioning Statement 36 Mountain Dew: To young, active soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine. Target Market Characteristics Customer Need Customer Benefit POD

37. iPod Shuffle $55 (1GB) iPod Touch $329 (8GB) iPod Nano $169 (8GB) How is apple positioning IPOD? 37

38. iPod Shuffle $55 (1GB) iPod Touch $329 (8GB) iPod Nano $169 (8GB) What are The Differentiation strategies? Cost Product - Ease of Use Product - Feature rich 38

39. Any Questions 39

40. Metric 6:PricingWholesale to Retail 40

41. Pricing wholesale to Retail 41

42. Example 1 Aaron owns a small furniture store. He buys BookCo brand bookcases from a local wholesaler for $200 per unit. Aaron is considering buying directly from BookCo, and he wants to calculate what he would pay if he received the same price that BookCo charges his wholesaler. Aaron knows that the wholesaler’s percentage margin is 30%. Wholesaler Retailer Manufacturer Local Wholesaler Aaron’s Furniture Store BookCo Manufacturer’s Cost $ + Manufacturer’s Margin $ = Manufacturer’s Price $ Wholesaler’s Cost $ + Wholesaler’s Margin $ = Wholesaler’s Price $ Retailer’s Cost $ 42

43. Example 1 43 Aaron owns a small furniture store. He buys BookCo brand bookcases from a local wholesaler for $200 per unit. Aaron is considering buying directly from BookCo, and he wants to calculate what he would pay if he received the same price that BookCo charges his wholesaler. Aaron knows that the wholesaler’s percentage margin is 30%. Wholesaler Retailer Manufacturer Local Wholesaler Aaron’s Furniture Store BookCo Wholesaler’s Selling Price = Wholesaler’s Cost ÷ [1 – Wholesaler’s Margin (%)] Wholesaler’s Cost = Wholesaler’s Selling Price ($) * [1 – Wholesaler’s Margin (%)] Mfg Selling Price ($) = $200 * [1 – 30%] = $140

44. Example 2 44 Clyde’s Concrete sells 100 cubic yards of concrete for $300 to a retail landscaper. The landscaper wants to include this in her bill of materials, to be charged to the homeowner. Further she wants to earn a 25% margin. What is the landscaper’s selling price for the concrete? Clyde’s Concrete Landscaper Homeowner Retailer Customer Wholesaler Wholesale Selling Price Retailer’s Selling Price = Retailer’s Cost [1 – Retailer’s Margin (%)] Retailer’s Selling Price = $300 / (1 – 25%) = $400

45. Let’s complete the worksheet 45

46. Before you leave today Hand In: 46

47. See you next Week 47