B207A Powerpoint - Week 3

B207A
Big ideas in
organizations
SHAPING BUSINESS OPPORTUNITIES I
Block 1
SESSION 5: FOCUSING ON OFFERING- SEGMENTATION, TARGETING AND
POSITIONING
Block 1- Reading 4
FOCUSING AN OFFERING
Learning outcomes
 At the end of this session you should be able to:

 understand the process of segmentation, targeting and positioning
 choose between segmentation variables and targeting strategies
 be able to formulate an offering’s positioning.
Markets
 A ‘market’ has been defined as
 ‘a group of people who, as consumers or as part of organizations, need
and have the ability, willingness and authority to purchase products in a
product class’
 Markets typically encompass a large number of people, who may have
similar overall needs but who may be a diverse group in terms of their
demographic characteristics, preferences, life styles, cultures and
geographical contexts.
 It makes sense for organisations to focus on serving the needs of subsets
of a market to ensure a good fit between an organisation’s offering and
customers’ needs, characteristics and contexts.
 The process of dividing up a market into smaller groups of people is
called Segmentation. Reading 4: Focusing an offering
Segmentation and targeting
 Why segmentation? Because;
 Segmenting a market enables an organization to choose how best to
direct their efforts because they are unlikely to be able to meet every
group’s needs.
 Targeting involves deciding which customer segment(s) to serve
 An offering is then positioned to appeal to the chosen target
segment(s) in a way that will distinguish it from competitors: its
positioning.
Focusing an offering
 Segmentation: The process of grouping customers in markets with
some heterogeneity into smaller, more similar or homogeneous
segments.
 The identification of target customer groups in which customers are
aggregated into groups with similar requirements and buying
characteristics
Reading 4: Focusing an offering

Segmentation and targeting Bases of segmentation
There are many bases on which a market can be segmented. As

discussed in Reading 4, consumer markets can be segmented using the
following variables:
 Demographic – age, gender, ethnicity, religion, education, income,
occupation, social class, life stage, family size
 Geographic – country, region, county/state/province, city,
neighbourhood, population/market density, urban/suburban/rural,
climate
 Psychographic – personality, lifestyle, motives
 Behaviouristic – usage (volume rate), benefits, price sensitivity,
loyalty.
Segmentation variables for consumer markets

Segmentation
To be effective segmentation variables need to be:
Measurable: can measure segments’ size, buying power and
profiles
Accessible : can be reached and served
Substantial : are large and profitable to serve
Differentiable : are distinguishable and respond differently
Actionable : can be targeted through tailored marketing programs.

Targeting
 Targeting: focusing on a segment of customers.
 A target market: is
 ‘a particular portion of the total population which is identified (i.e.
targeted) by the marketer to be the most likely to purchase its
products or services’.

Targeting
 Determining which segment(s) to target will draw on an organization's
marketing research and analyses of the marketing environment,
including consideration of:
. Customers’ needs and wants : of different segments
. Competitors: to help identify a suitable competitive advantage in
relation to different segments
. Organization's competencies and resources: to assess strategic
windows (the fit with key market requirements)

Types of targeting strategies

Targeting
Targeting strategies:
Undifferentiated: Making the same offer to the whole market (e.g. BBC
News).
Differentiated: Making different offers to separate market segments
(e.g. Clarks Shoes).
Concentrated: Focusing on one or a few market segments (niche)
(e.g. racehorse studs).
Customized: One-to-one marketing, often in a combination with a
segment strategy (e.g Mini cars, which allow customers to customize the
car’s appearance)

Positioning
 Positioning
Positioning: is arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in the minds of
target consumers.

A slightly elaborated version of the standard positioning formula you may have met before is:
 For … (target consumers)
 Brand X is … (competitive set and subjective category)
 Which gives the most … (promise or consumer benefit)
 Because of … (reason to believe)
Exampler Such as Cia Te
 For people who are seeking the ideal gift to give to friends
and business partners at home and abroad.
Chia Te is the best baked, fresh tasting and delicious brand
(subjective category) of pastry and delicacies (competitive
set).
Which offers unique flavor and high quality.
Because Chia Te is popular among tourists and locals alike and
has won many awards.
 Marketers often use perceptual positioning maps to examine
customers’ perceptions of their offering against those of
competitors.

Perceptual positioning maps

Positioning
 Positioning is about taking a customer perspective or how customers
perceive differences between competing offerings.
 Organizations should take their heritage into account when
formulating a new offering. The new offering’s credibility and trust
among customers will be affected by the organization's heritage.
 Example: When Toyota wanted to move into the luxury car market,
it created a new luxury vehicle division under the brand name
Lexus, as Toyota had not previously been known as a luxury car
brand. This created a distance between the two lines of car offerings.
Positioning
Many organizations embed their positioning in their strap line (the statements that
organisations link to their brand when they communicate about it). Examples of
such positioning strap lines include:
 the national British newspaper The Times – ‘Quality journalism, wherever and
whenever’
 the Royal National Lifeboat Institution (RNLI) – ‘the charity that saves lives at
sea’
 the worldwide movement Médecins Sans Frontières / Doctors Without Borders –
‘Medical aid where it is needed most. Independent. Neutral. Impartial.’
 the car maker BMW – ‘The ultimate driving machine’
 the industrial and automotive lubricants brand Castrol – ‘It’s more than just oil.
It’s liquid engineering’
 the chocolate manufacturer Lindt – ‘Maître chocolatier Suisse depuis 1845’.

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B207A

 At the end of this session you should be able to:

Reading 4: Focusing an offering

There are many bases on which a market can be segmented. As

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

Reading 4: Focusing an offering

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