MARKET SEGMENTATION, TARGETING & POSITIONING

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MARKET SEGMENTATION, TARGETING & POSITIONING Kotler, P. & Armstrong, G., 2006, Principles of Marketing, New Jersey: Pearson Education, Inc., Ch.7

THE STEPS Target marketing Market positioning Market segmentation Identify bases for segmenting the market Develop segment profiles Target marketing Develop measure of segment attractiveness Select target segments Market positioning Develop positioning for target segments Develop a marketing mix for each segment

DEFINITIONS Market segmentation is dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes. Target marketing is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market positioning is the process of arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers.

SEGMENTING CONSUMER MARKETS GEOGRAPHIC SEGMENTATION. Dividing a market into different geographical units. DEMOGRAPHIC SEGMENTATION. Dividing a market into groups based on demographic variables. PSYCHOGRAPHIC SEGMENTATION. Dividing a market into based on social class, lifestyle, or personality characteristics. BEHAVIORAL SEGMENTATION. Dividing a market into based on consumer knowledge, attitude, use, or response to a product.

VALS – Life Style Classifications High Resources Thinkers Achievers Experiencers Strivers Believers Makers Principle Oriented Status Action Low Resources Low innovation Survivors High innovation Innovators

VALUE & LIFE-STYLES (VALS) SURVIVORS – elderly, passive people who are concerned about change. Loyal to their favorite brands. INNOVATORS – successful, sophisticated, active people with high self-esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services. EXPERIENCERS – young, enthusiastic, impulsive people who seek variety and excitement. Spend a comparatively high proportion of income on fashion, entertainment, and socializing. MAKERS – practical, down-to-earth, self-sufficient people who like to work with their hands. Favor product with a practical or functional purpose.

VALUE & LIFE-STYLES (VALS) ACHIEVERS – successful goal-oriented people who focus on career and family. Favor premium products that demonstrate success to their peers. STRIVERS – trendy and fun-loving people who are resource- constrained. Favor stylish products that emulate the purchase of those with greater material wealth. THINKERS – mature, satisfied, and reflective people who are motivated by ideals and value order, knowledge, and responsibility. Favor durability, functionality, and value in products. BELIEVERS – conservative, conventional, and traditional people with concrete beliefs. Favor familiar products and are loyal to established brands.

INDONESIAN CONSUMER MARKET SEGMENTS: ESTABLISHED CONFIDENT (“ORANG ALIM”) THE OPTIMISTIC FAMILY PERSON (IBU “PKK”) THE CHANGE-EXPECTING LAD (‘ANAK NONGKRONG”) CHEERFUL HUMANIST (“LEMBUT HATI”) INTROVERT WALLFLOWER (“PASRAH”) THE SAVVY CONQUEROR/CITY SLICKERS (“MAIN UNTUK MENANG”) THE NETWORKING PLEASURE SEEKER (“GAUL-GLAM”) THE SPONTANEOUS FUN-LOVING (“BINTANG PANGGUNG”) (SUMBER: LOWE INDONESIA)

INDONESIAN CONSUMER MARKET SEGMENTS: “ORANG ALIM” (ESTABLISHED CONFIDVENT) Demografi: Umumnya laki-laki, urban, usia matang, SES tinggi dan berpendidikan tinggi. Karakteristik: Ramah dan menyukai keharmonisan di lingkungan sekitarnya. Merasa senang jika dapat menolong orang lain. Konservatif dan normatif Bagi mereka sangat penting untuk dihargai dan dinaggap bertanggung-jawab oleh lingkungannya. Umumnya sangat percaya diri dan merasa berada pada jalur yang benar sesuai dengan yang mereka inginkan. Tidak menyukai TV dan iklan.

INDONESIAN CONSUMER MARKET SEGMENTS: “IBU PKK” (THE OPTIMISTIC FAMILY PERSON) Demografi: Umumnya wanita, rural, usia matang, SES rendah. Karakteristik: Menjalani hidup dengan bersahaja, realistik, kekeluargaan dan normatif. Menyukai memasak sebagai hobi tidak hanya sebagai satu kewajiban. Hidupnya hanya untuk keluarga dan orang di sekelilingnya. Di waktu senggang, melakukan tidur siang, mengunjungi keluarga, berekreasi bersama keluarga, window shopping dan menyukai iklan.

INDONESIAN CONSUMER MARKET SEGMENTS: “ANAK NONGKRONG” (THE CHANGE-EXPECTING LAD) Demografi: Umumnya laki-laki, urban, usia muda, SES rendah. Karakteristik: Hidupnya berorientasi pada teman-teman/kelompok. Bagi mereka: “All is one and one is all.” Menurut mereka, teman adalah segalanya. Tidak terlalu optimis akan masa depan mereka namun mengharapkan perubahan. Cukup toleran terhadap seks. Suka menonton TV, mendengarkjan musik dan mengamati iklan.

INDONESIAN CONSUMER MARKET SEGMENTS: “LEMBUT HATI” (CHEERFUL HUMANIST) Demografi: Umumnya perempuan, rural, usia muda, SES rendah. Karakteristik: Cenderung tidak suka menjadi pusat perhatian walaupun diterima di lingkungannya. Menyukai lingkungan yang damai dan penuh harmoni. Sangat menaruh perhatian dan berempati pada lingkungan dan orang-orang di sekitarnya. Merasa dihargai jika lingkungannya menerima apa yang mereka lakukan. Tidak terlalu suka menonton TV dan memperhatikan iklan.

INDONESIAN CONSUMER MARKET SEGMENTS: “PASRAH” (INTROVERT WALLFLOWER) Demografi: Perempuan, rural, usia matang, SES rendah dan berpendidikan rendah. Karakteristik: Tidak menginginkan banyak hal dalam hidupnya atau bisa dibilang bukan tipe pemimpin. Umumnya introvert, memiliki sedikit teman tapi sangat loyal. Bijaksana, rendah hati dan pekerja keras. Tidak terlalu optimis akan masa depan mereka. Memasak dan berkebun menjadi hobi mereka, selain gemar menonton TV, mendengarkan musik dan religius.

“MAIN UNTUK MENANG” (THE SAVVY CONQUERER/CITY SLICKERS) Demografi: Umumnya laki-laki, urban (Jakarta A+), usia matang, SES tinggi dan berpendidikan tinggi. Karakteristik: Tujuan hidupnya adalah kejayaan dan kemakmuran. Menyenangi kompetisi dan senag dikagumi orang lain. Cenderungdominan dalam pergaulan. Senang bertindak (man of action), menyenangi tindakan spontan dan menantang. Suka fashion, menikmati makanan, menyukai iklan dan produk serta pandai berfilosofi. Menyukai travelling, penikmat makanan di luar rumah, menyenangi iklan dan politik.

“GAUL-GLAM” (THE NETWORKING PLEASURE SEEKER) Demografi: Umumnya perempuan, urban (Jakarta A+), SES tinggi dan berpendidikan rata-rata. Karakteristik: Sangat memuja materi dan ingin bisa tampil dalam majalah. Kerap tampil di berbagai acara informal untuk menambah dan membina jaringan/nerworking. Bagi mereka, berteman adalah investasi. Mereka menunggu terjadinya perubahan di Indonesia. Mengikuti setiap perkembangan fashion, menyukai iklan dan mengamati bidang-bidang lain seperti lingkungan, sejarah dan ilmu-ilmu sosial.

“BINTANG PANGGUNG” (THE SPONTANEOUS FUN-LOVING) Demografi: Umumnya laki-laki, urban, usia matang dan SES tinggi. Karakteristik: Suka diperhatikan seperti halnya seorang bintang. Suka bergaul, pamer dan menyenangi aktivitas di luar rumah seperti pesta dan kumpul-kumpul. Menyukai hal-hal baru yang sedang menjadi trend seperti fashion,gadget dan hal-hal baru lain. Sangat menikmati hidup.

BEHAVIORAL SEGMENTATION OCCATION SEGMENTATION. Dividing a market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item. BENEFIT SEGMENTATION. Dividing a market into groups according to the different benefits that consumers seek from the product. USER STATUS. Dividing a market into groups of non-users, ex- users, potential users, first-time users, and regular users of a product. USAGE RATE. Dividing a market into light, medium, and heavy product users. LOYALITY STATUS. Dividing a market into groups based on consumers’ degree of brand loyalty: switchers, shifting loyalists, split loyalists, and hard-core loyalists.

BUSINESS MARKET SEGMENTATION MACRO/MICRO SEGMENTATION PROCESS DEMOGRAPHICS OPERATING VARIABLES PURCHASING APPROACH SITUATION FACTORS PERSONAL CHARACTERISTICS

BUSINESS MARKET SEGMENTATION MACRO VARIABLES INDUSTRY CHARACTERISTICS : mining, agriculture, etc. ORGANIZATIONAL CHARACTERISTICS DEMOGRAPHICS : e.g. customer’s level of risk taking, desire to innovate, types of supplier relationships, number of suppliers, SIZE & LOCATION: e.g. business volume, growth record, convenient to transportation, degree of operational decentralization. ECONOMIC FACTORS: e.g. state of market economy; industry growth rate & cyclicality; customer’s market share, ability & desire to expand.

BUSINESS MARKET SEGMENTATION MACRO VARIABLES (cont’d) COMPETITIVE FORCES: e.g. number & strength of competitors, ease of entry into market, ease of penetrating potential customers. PURCHASING TACTICS: e.g. decision makers & their priorities, centralized or decentralized, major influences on final purchase decision. END USE MARKETS: e.g. manufacturers of end-products, commercial contractors, wholesalers & retailers, banks & other financial institutions. PRODUCT APPLICATION: e.g. component in specific end- products, consumer home or recreational usage, resale, etc.

BUSINESS MARKET SEGMENTATION MICRO VARIABLES ORGANIZATIONAL VARIABLES PURCHASING SITUATION/PHASE CUSTOMER EXPERIENCE (or PLC CONSIDERATIONS) CUSTOMER INTERACTION NEEDS CUSTOMER BENEFITS ORGANIZATIONAL CAPABILITIES

BUSINESS MARKET SEGMENTATION MICRO VARIABLES (Cont’d) PURCHASE SITUATION VARIABLES INVENTORY REQUIREMENTS PURCHASE IMPORTANCE PURCHASING POLICY PURCHASING CRITERIA STRUCTURE OF THE BUYING CENTER INDIVIDUAL VARIABLES PERSONAL CHARACTERISTICS POWER STRUCTURES

REQUIREMENTS for EFFECTIVE SEGMENTATION MEASURABLE ACCESSIBLE SUBSTANTIAL DIFFERENTIABLE ACTIONABLE

TARGET MARKETING EVALUATING MARKET SEGMENS SEGMENT SIZE & GROWTH SEGMENT STRUCTURAL ATTRACTIVENESS COMPANY OBJECTIVE & RESOURCES SELECTING TARGET MARKET SEGMENTS UNDIFFERENTIATED/MASS MARKETING DIFFERENTIATED MARKETING CONCENTRATED MARKETING MICROMARKETING LOCAL MARKETING INDIVIDUAL MARKETING

POSITIONING POSITIONING COMMUNICATION DIFFERENTIATION IMAGE COMPETITIVE ADVANTAGES positioning STATEMENT process

POSITIONING DIFFERENTIATION PRODUCT & SERVICES DISTRIBUTION PERSONNEL IMAGE (EVENTS/SPONSORSHIPS) COMPETITIVE ADVANTAGE. An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices. HOW MANY DIFFERENCES TO PROMOTE? WHICH DIFFERENCES TO PROMOTE?

POSITIONING COMPETITVE ADVANTAGE’S CRITERIA IMPORTANT. Delivers a highly valued benefit to target buyers. DISTINCTIVE. Competitors to not offer the advantage. SUPERIOR COMMUNICABLE and VISIBLE to buyers. PREEMPTIVE. Competitors cannot easily copy the advantage. AFFORDABLE. Buyer can afford to pay for the advantage. PROFITABLE

POSITIONING POSITIONING STATEMENT. A statement that summarizes company or brand positioning – it takes this form: To (target segment and need) our (brand) is (concept) that (point-of-difference). “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. With Mountain Dew, you can stay alert and keep going even when you haven’t been able to get a good night’s sleep.” VALUE PROPOSITION. The full positioning of a brand – the full mix of benefits upon which it is positioned.

POSITIONING TARGET MARKET: UPSCALE AMERICAN FAMILIES STATEMENT FOR UPSCALE AMERICAN FAMILIES, VOLVO IS THE AUTOMOBILE THAT OFFERS THE UTMOST IN SAFETY AND DURABILITY VALUE PROPOSITION TARGET MARKET: UPSCALE AMERICAN FAMILIES BENEFITS OFFERED: SAFETY, DURABILITY PRICE RANGE: 20% PREMIUM OVER SIMILAR CARS 29

POSITIONING ISSUES OVER-POSITIONING when customers have too narrow an understanding of the company, product, or brand. UNDER-POSITIONING when customers only vague ideas about the company and its products and do not perceive anything distinctive about them. CONFUSED POSITIONING when frequent changes and contradictory messages confuse customers regarding the positioning of the brand. DOUBTFUL POSITIONING when the claims made for the product or brand are not regarded as credible by the customer. (Cravens, D.W. & Piercy, N.F., 2006, Strategic Marketing, New York: McGraw-Hill/Irwin, p.185)