Marketing analysis: Segmentation and Positioning
Conducting market segmentation and product positioning in the selected target market segments is the most important area of pre-planning of marketing analysis..
1. Market segmentation
It is quite obvious that different consumers are willing to buy different goods. In order to meet these different needs, producers' organizations and organizations sellers seek to identify groups of consumers who are likely to respond positively to the products offered, and directing their marketing efforts primarily on these groups of consumers.
It is appropriate to recall the famous Pareto's law (Act 80:20), which in this application is based on statistical studies, according to which 20% of consumers buy 80% of the goods of a certain brand, introducing a generalized group of target consumers, for some reason (which? - It is necessary to find out ) focused on the product. The remaining 80% of consumers buy 20% of the goods of this brand and have no clear preference in this case - they are likely to make occasional purchases. Manufacturers tend to target their products and marketing activities for the first 20% of consumers ("Target shooting"), and not on the entire market as a whole ("shooting areas"). Such a strategy of market activity appears to be more effective.
Market segmentation is a division into relatively distinct groups of consumers (market segments), which may be targeted to different products and therefore require different marketing efforts.
Market segment - a group of consumers, characterized by the same type of reaction to a proposed set of products and marketing incentives.
The first step in carrying out the segmentation is the selection criteria for segmentation. We should make a distinction between the criteria of segmentation of consumer goods, industrial products, services, etc. Although during the segmentation of different products could be partly used, and the same criteria, such as the amount of consumption.
Thus, when the market segmentation of consumer goods using criteria such as geographic, demographic, socioeconomic, psychographic (psychological), behavioral, etc.
Geographic segmentation - dividing the market into different geographical units: countries, regions, provinces, cities, districts, etc. The use of this criterion is often the starting point of segmentation. Geographical segments are typically easy to identify and measure necessary information is often available from secondary sources. In pure form, geographic segmentation is of limited use. It is most useful especially in the service sector, where the territorial identity plays an important role.
Demographic segmentation - dividing the market into groups based on characteristics such customers, such as: age, sex, marital status, social class, family life cycle, religion, nationality, race. Demographic segments, as well as geographic usually easy to define and measure the required information is often available from secondary sources. This segmentation is typically done in conjunction with the use of other criteria, as one needs, for example, age group may vary among different groups. However, some products have a pronounced focus on certain categories of people - for example, the cosmetics market is usually initially segmented into cosmetics for women, men and children.
Socio-economic segmentation involves dividing the consumers in terms of income, occupation, level of education. Obviously, these criteria segmentation directly affect the needs of the individual and the possibility of meeting them. Sometimes these criteria relate to demographic criteria.
Psychographic segmentation - dividing the market into different groups based on lifestyle or personality characteristics of the consumers.
Lifestyle characterized by what consumers spend their time as they rest in which homes and apartments live, what it represents the interior of their homes, what are their hobbies, etc. For example, cigarette manufacturers are segmented by inveterate smokers, and especially the ordinary health-conscious.
Individual characteristics consumers rather used as criteria segmentation when the product is similar competitors' products and individual needs of consumers are not detected when using other criteria segmentation. For example, at one time car buyers "Ford" were described as "independent, impulsive, prone to change and self-confident." However, personal traits difficult to measure accurately, as their identification is usually carried out for therapeutic purposes, but not for the purpose of market segmentation.
Because psychographic criteria more difficult to measure than others segmentation criteria, they are often used to better understand consumer prosegmentirovannyh using other criteria.
Behavioral market segmentation involves dividing into groups based on characteristics such users as knowledge, relationships, character, or the reaction product using it.
Here, by the ratio of mean stable, favorable or unfavorable evaluations, feelings and tendencies to act in relation to certain subjects and ideas, it strongly influences the behavior of buyers.
In accordance with this isolated segmentation: the circumstances of use, based on gains based on the status of the user based on the intensity consumption, based loyalty based on the stage of readiness for the buyer to make a purchase.
Segmentation of the circumstances of the application - the division of the market into groups according to the circumstances, about the emergence of the idea of making a purchase or use of the product. For example, orange juice abroad typically used for breakfast. However, manufacturers are trying to expand oranges demand, stimulating consumption of orange juice at a different time of day.
Segmentation based on benefits (merit) - the division of the market into groups based on the benefits, uses, advantages which the consumer is looking for in a product. For example, smoking is for one category of consumers is a vital necessity of life for others - only a certain part of the image.
Segmentation based benefits may be realized in the course of marketing research using cluster analysis. In this case, depending on the values of its respondents are grouped into separate segments. Within each segment of the value system of the individual consumer are similar. For example, on the basis of the criterion of "found merit" buyers washing powders are segmented by consumers, for whom the most important in the powder - or so he washed "whiter than white", or that there was no smell in the wash, or that the powder was causing the least harm to the environment, etc. In Figure 1 shows how manufacturers are adapting their products under their dignity those who appreciate consumers.
Fig. 1. Found in products dignity and their consideration in the development of commodity policy
User status characterizes the regularity of the use of any product of its customers, which are divided into not using the product, ex-users, potential users, first time users and regular users. For example, you can target your marketing activities for the conversion of first-time users to regular users. Different companies orient their activities to different groups of users, besides the last call for different methods of promoting the product.
The intensity of consumption - an indicator, based on which markets are segmented into groups of weak, moderate and active consumers of certain products. Obviously advantageous serve one market segment consisting of a large number of active users than several smaller segments of weak users.
The degree of loyalty characterizes the degree of loyalty, commitment to customer specific brand product and is usually measured by the number of repeat purchases of the product of this brand. According to this criterion include the following six segments: 1) consumers show high loyalty to a particular brand of product, and 2) consumers who may switch to another brand, and reduce the use of the brand, and 3) occasional users, this number can be increased by using special techniques promotion of a product, and 4) the occasional consumers that can reduce consumption because of the actions of competitors, and 5) non-consumers of the brand, which may subject it to buy its modifications, 6) non-consumers with a strong negative attitude towards this brand.
Stage of readiness of the buyer - a characteristic by which to classify customers are not aware and knowledgeable about the product, on a well-informed about the properties of the product to have shown interest in him, wanting to buy it and immeasurable buy it. The marketing plan is developed taking into account the distribution of customers at different stages of their willingness to make purchases.
When segmenting the market of products for industrial use are usually first isolated makrosegmenty, inside which are then searched for micro-segments. Makrosegmenty characterized by some common features, microsegmentation implies further detail macro segments based on buying before special characteristics.
In conducting makrosegmentatsii primarily uses the following criteria: geographical location, type of organization, acquiring goods, the size of the organization, direction and amount of use of purchased goods.
Demand for products for industrial purposes varies depending on the geographical location of the consumer organizations. For example, wood processing companies orient certain of its products to specific geographic areas. Enterprises of certain sectors of the economy are often located in certain regions, depending on the availability of certain resources, transport, communications, etc. These companies are characterized by similar needs.
Different types of organizations often require products with certain characteristics and prices, special distribution systems and marketing strategies. For example, a paint manufacturer can segment the market for wholesale trading companies, retail organizations, construction companies, to manufacturers of automobiles and other
The size of the organization can influence the procurement process and their volume. For the development of a segment of a certain size marketer must adapt elements of the marketing mix for specific environments. For example, consumers who make purchases in large quantities, often provided by trade discounts. For the sale of large organizations often use personal selling.
Various products, such as raw materials (steel, oil, wood, etc.) are used in a variety of ways. This has an impact on the types and quantities of products purchased, the use of marketing tools. For example, computer manufacturers can segment the market of computers in the directions of its use, since the requirements of various organizations for technical and software defined purposes for which computers are used. Organizations that purchase products in large quantities, have different needs compared to organizations that purchase products in small quantities. This applies primarily to pricing and supply policies. The manufacturer may establish a "threshold" of the size of purchases above which the buyer goes to a different "weight class" with a special status.
To highlight microsegments must have a detailed understanding of the properties of the individual members of each makrosegmenta in terms of their management philosophy, decision-making on procurement strategies and their implementation. The basis of such segmentation is put information from both official and unofficial sources.
Furthermore, it is possible to use for segmentation and other criteria. Thus, Russia is very common segmentation of consumers based on their ability to pay.
Choosing the right segmentation criteria to a large extent affect the final results of business operations. For example, developing a marketing strategy and tactics of the car model "Mustang", the company "Ford Motors" (USA) as the basic criterion for segmentation of the selected age buyers. The model was designed for young people who wish to buy an inexpensive sports car. However, firing machine on the market, the management of the company to his surprise found that the model is in demand among buyers of all ages. This suggests that as a base segment of young people should choose not to, and "mentally young" people. This example points to the need to consider when segmenting psychological factors.
Next, using the selected criteria is the process of market segmentation.
For each highlighted with a specific criterion / criteria of market segments to determine the profile of the reaction of consumers, that is the set of characteristics (a handle), detailing the specific market segment of consumers. Representatives of one market segment should equally apply to the product in terms of its advantages found in a similar way to use it and similar tools to respond to marketing activities (price, advertising, etc.), display similar behavior and loyalty to the product. Only in this case, from this point of consumer segmentation should be considered successful.
Identifying the profile of consumer reaction is usually carried out through special studies. For example, coffee drinkers were asked to rank 25 characteristics of the product (coffee with caffeine and without the ground and beans, regular and instant, etc). The data obtained were subjected to factor analysis, resulting in identified three distinct segments of consumers, conventionally called as "lovers of caffeinated coffee", "coffee drinkers of decaffeinated" and "lovers of ground coffee." Each of these segments has been described in terms of its size, purpose and frequency of use of coffee, brand and type of coffee consumed, the demographic characteristics of consumers. In accordance with the obtained results, it was determined to which segments of consumers should supply certain brands of coffee.
Segments obtained from a successful segmentation, must be:
Defined, that is to have a clear set of needs and respond in a similar manner to the proposed product.
Significant enough in size to justify the extra cost of "fit" marketing strategies to the requirements of this segment.
Available for the effective marketing activities.
Used for a sufficiently long period of time.
If selected segments do not meet the requirements of the uniformity of the reaction of consumers or other requirements of the market segments, it is necessary to continue the process of segmentation, using other criteria. Thus, the segmentation process is iterative. It is sometimes said that the segmentation - is more art than science.
Must be borne in mind that the market segments change over time, creating new opportunities and eliminating pre-existing. For example, the personal computer market for 1980 grew by 55% annually, while sales of cigarettes in northern Europe decreased by 3% annually. New knowledge and technologies offer new opportunities, and therefore the search for new segments should be an important focus in the activities of marketers.
2. Selecting target market segments
The next step after identifying market segments is to determine the extent of their attractiveness and selection of target markets and marketing strategies in relation to them. Ongoing assessment of the attractiveness of each market segment and the selection of one or more segments to master. In assessing the attractiveness of the various market segments that meet the requirements for their successful segmentation into account the following three main factors: the size of the segment and its rate of change (increase, decrease) the structural attractiveness of the segment, objectives and resources of the organization, learning segment. The structural attractiveness of the market segment defined by the level of competition, the possibility of replacing the product to a new, satisfying the same needs (for example, in many cases, a substitute for plastic or steel), the power positions of buyers and suppliers of the power positions of components and resources in relation to the organization in question, the competitiveness of the products on these segments. In the study of the structural attractiveness of the market segment it is advisable to use a model of competition Porter, reviewed earlier in this article series.
Even if the market segment is characterized by the right size and growth rate and has sufficient structural appeal, it is necessary to take into account the objectives and resources of the organization. Perhaps difference in aims of long-term development of the organization with the current goals of its activities on a particular market segment. A shortage of resources to ensure competitive advantage.
Next, the organization must decide which market segments analyzed, it should choose and be seen as target markets.
Here you have options:
Concentrate efforts on the implementation of one product in one market segment.
Suggest a product to all market segments (product specialization).
Offer all the products one market (market specialization).
For some selected market segments offer different products (selective specialization).
Do not take into account the segmentation results and to supply the entire market all produced products. This strategy is used primarily in case you are not able to identify market segments with different profile of the reaction of consumers and / or segments considered separately, are few and of no interest to commercial development. Usually, such a policy followed by large firms. For example, "Coca-Cola" is committed to providing their drinks on all market segments of soft drinks.
On selected target markets can use the following approaches to their development: undifferentiated marketing, differentiated marketing and concentrated marketing.
Undifferentiated marketing - is the direction of the market in which the organization ignores the difference between market segments and overlooks the entire market with a single product. Organization rather focuses on what is common in the needs of consumers, rather than on how they differ from each other. Used massive system of goods and massive advertising campaigns. Thus, we achieve cost savings. An example is the marketing of "Coca-Cola" in the initial stage of its development, when all consumers are offered only one drink a bottle of the same size.
Differentiated marketing - the direction of the market in which the organization chooses to act on several segments with specially developed products for them. Offering a variety of products and marketing mix, the organization expects to achieve more sales and gain a stronger position in each market segment than the competition. For example, "General Motors" proclaimed: "We are producing cars for every purse and purpose of each of each individual." Although differentiated marketing typically provide a higher volume of sales, compared with undifferentiated, the costs of implementing it are higher.
The concentrated (focused) marketing - the direction of the market in which the organization has a large market share in one or more submarkets (niches), as opposed to focusing efforts on a small fraction of the large market. It is attractive for organizations with limited resources for small businesses. This requires a deep knowledge of narrow market segments, and the high reputation of the product organization.
When the evaluation and selection of market segments in the case when it is expected to develop in parallel a number of segments, it is necessary to take into account their relationship with both the production and with the sales and marketing activities. To do this, we must try to reduce the total cost due to the possible increase in output (economies of scale in production), combining the operations of the storage and transport of products of coordinated advertising campaigns, etc.
3. Positioning in the market
The next step is to choose the direction of the market orientation of the organization is to determine the position of the product on the individual market segments. The position of the product - this view primarily particular group of consumers, the target market segments, relative to the most important properties of the product. It characterizes the space occupied by a particular product in the minds of consumers to the product competitors. The product should be perceived a certain group of target consumers as having a clear image that differentiates it from competitors' products.
Certainly, we must also consider the fact that the position of the product affect the reputation and image of the company as a whole.
Ranking product thus consists in that, based on estimates of the consumers in the market of a certain product, for selection of these parameters and elements of a complex product marketing standpoint that a targeted consumer product provide a competitive advantage.
The positions are described attributes (parameters) that are important to consumers and that they have chosen. The price may be a key parameter for the purchase of groceries, the level of services - when choosing a bank, quality and reliability - if you buy a computer, etc.
Positioning is usually done in three steps:
A detailed study of the market in order to determine which attributes are important for this market segment, and set the priority of these attributes.
An inventory of competing products having identified attributes.
Set the perfect level of attribute values for a particular segment of the market. Conducted a comparative evaluation of the attributes of the brand positioned the product compared to the ideal level and compared with competitors' products.
By ranking results finally selected market segments and differentiation direction (see below) products. For example, a car manufacturer can concentrate on the longevity of their cars, while competitor - on their profitability. In this example, the positioning is carried out by one advantage. However, in practice, positioning can be carried out in two or even three attributes. For example, toothpaste "Aquafresh" promoted on the basis of three advantages: the fight against tooth decay, fresh breath and whitening teeth.
Thus, the positioning implies a deep market research aimed at understanding how consumers perceive the product, what options they think are most important. Based on the results of these studies are based maps of perception, which portrayed the studied products with the most significant parameters in the eyes of consumers.
Assessing the market position of different products, consumers are doing it from the point of view of its use, benefit. Therefore, any organization needs to seek out reserves provide additional benefits and benefits to its customers, whether it is of a higher quality of goods and services or to provide them at lower prices.
Analysis of potential sources provide more value to customers can be carried out by the so-called value-chain (Fig. 2)
Fig. 2. The Value chain
The Value Chain includes in its membership all the activities of the organization (chain link) in order to create value for the consumer. In the classical model of the organization of these activities include the development, manufacture, marketing, sales and support of its products. These activities are grouped into five major groups (input Logistics - providing all the necessary manufacturing operations, manufacturing operations - the release of finished products, output logistics - handling of finished products, marketing, including marketing, and services) and four support activities (infrastructure organization - ensuring effective management, finance, planning, human resources management, technological development; purchases that involve the acquisition of all necessary to conduct primary activity). Supporting activities pertain to the maintenance of all major activities. In a more detailed model of each of the nine species of the organization, in turn, can be fleshed out, for example, marketing - its individual functions: marketing research, product promotion, marketing and new product development, etc.
The task of the organization is to check the costs and outputs of each of the nine activities and finding ways to improve them. Comparison of these data with those of competitors identified ways of winning competitive advantage.
For each link of the chain is asked: "Do we create value for the customer the most efficient in terms of cost method"? And since every activity has to be analyzed from the perspective of providing benefits to the consumer and to determine in what costs it pours.
Typically, value-chain analysis is carried out with a particular organization because of its ties with the value chain of suppliers, distributors and consumers. Thus the organization, for example, can help the main suppliers to find ways to reduce their costs, leading to lower prices of component parts supplied by them. In the same way can be helped consumers in the direction of doing their work more effective and cheapest way to making customers more loyal to the organization.
Figure 3 is an example of values chain company "Dupont". Management and employees of firms use a chain of values for better orientation of its activities on customer needs and finding ways to reduce all kinds of costs, the firm has remained a leader in the competition.
Fig. 3. The Value Chain Company "Dupont"
In determining the position of the product on the market is often used method of mapping position in a two-dimensional matrix, which are products of competing firms.
Figure 4 shows a map of the hypothetical position of competing products on a specific target market in two ways: the "price" (the horizontal axis) and the "quality" (vertical axis). In the circles whose radii are proportional to the volume of sales, the letters correspond to the names of competing products. Question mark - a possible choice position in the market for a new company, a competitor from the analysis of the position on the market of products of other companies. This choice is justified by the desire to occupy a place in the target market, which is less than the intensity of competition (in this example - a product of relatively high quality at an average realized price).
Fig. 4. Map position of "price-quality"
The parameters in the construction of maps of positioning can choose different pairs of characteristics that describe the studied products. Often these couples are selected in a survey of consumers. For example, for washing machines: washing modes - control of the washing temperature, the demand to the washing facility - the load size. Cookies can be positioned, for example, in following characteristics pair: sweetness level and quality of the package. Antidepressant drugs are often positioned on the attributes: low - high side effect (which Specifies the target), and anxiety - a sense of calm. The image of different airlines can be positioned on the attributes: conservative - and the usual entertainment - sophisticated.
To gain a strong position to compete on the basis of the results of the positioning of its products, the organization highlights the characteristics of the product and the marketing activities that can be a profitable way to distinguish its products from those of competitors, that is, to differentiate their products. And for the different products can be selected different areas of differentiation. For example, in a grocery store a key differentiating factor may be the price at the bank - the level of service, quality and reliability determine the choice of a computer, etc.
Allocate product differentiation, service differentiation, differentiation, staff and differentiation of image.
Product differentiation - offer products with features and / or design, better than the competition. For standardized products (chicken, oil, metal) is almost impossible to carry out product differentiation. For highly differentiated products (cars, appliances) to follow this market policy is a common occurrence.
Service differentiation is to provide a service (speed and reliability of supply, installation and after-sales service, customer training, consulting), accompanying the product and on the level of superior service competitors.
Differentiation of the staff - hiring and training of staff who carries out its functions more effectively than competitors staff. Well-trained personnel must meet the following requirements: competence, friendliness, credibility, reliability, responsibility and interpersonal skills.
The differentiation of the image is to create the image, the image of the organization and / or its products that distinguish them for the better from the competition and / or their products. For example, the most famous cigarette brands have similar taste, are sold in the same way. However, cigarettes "Marlboro" due to the strangeness of the image, according to which only the strong smoke them, "kovboepodobnye" men occupy about 30% of the global cigarette market.
Depending on the specific features of the product and the ability to realize it can simultaneously from one to several lines of differentiation.
Positioning allows us to solve the problem on the elements of the marketing mix, bring them to the level of tactical detail. For example, a firm that has positioned its product as high quality goods, sell them at high prices, high-quality services of dealers and advertise products in prestigious journals.
The results of positioning products or certain types of business can show that the organization in its market operations, there are problems. This is due to the following. First, the segment that is considered as a target market, ceased to be attractive because of their small size, reduced demand, high competition, low profit margins. Second, the quality and characteristics of the product were the target segment is not in demand. Third, because of the excessively high price of the product was not competitive.
In this context, talk about strategies for repositioning (repositioning). Among the "material" refers strategies repositioning of the brand new release of the product and / or modification of an existing brand (price, quality, etc.). In addition, allocate psychological repositioning strategy. These include: changing views of consumers about the brand organization, changing consumers' opinions about the brands of competitors, the change in the rating of individual attributes ("Volvo" has raised the importance of vehicle safety attributes when they are selected), the introduction of new or elimination of pre-existing attributes (development of washing powder, odorless ), finding new market segments (the creation of an extremely expensive "super fashionable" fully ready suits).
Summing up, we can propose the following sequence of steps during the segmentation and product positioning:
Spend a particular segmentation of the market.
Determine which segments should be viewed as targets.
Identify what requirements the target consumers have a product and how they are guided by exercising their choice.
Develop the product (s) that satisfies the most of these demands and expectations.
Rate the position of competing products in selected market segments, looking at them through the eyes of the target consumers.
Select strategies that differentiate the product (s) from the products of competitors and meet the expectations of the target consumers.
Fully develop the marketing mix according to the results of positioning and differentiation strategies selected.
Evaluate the possible volume of sales of selected products in the target markets.
The results of these studies are used in the planning of marketing.
Thus, the benefit of segmentation says:
Provided a better understanding of not only the needs of the consumers, but also what they look like (their personal characteristics, characteristics of market behavior, etc.). As a result, products are better meet market requirements.
Achieved a better understanding of the nature of competition in specific markets. Based on the knowledge of the circumstances, it is easier to select market segments for their development and determine what characteristics should have the products to gain competitive advantage.
The opportunity to concentrate limited resources and institutional capacity in the most profitable areas of their use.
The energy marketing staff and marketing services directed to the most promising customers.
When developing marketing plans take into account the characteristics of individual market segments, resulting in a high degree of orientation of the tools of marketing activities, including advertising, to the demands of specific market segments.
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Customer analysis of values
(customer value analysis) - analysis conducted to determine the benefits, benefits that customers value, and to determine the comparative evaluation of different clients competing offerings. The results of the analysis allow to determine the competitors, which can be attacked, choose the strategy of such an attack. In addition, in this analysis in organizations to identify vulnerable areas of the actions of competitors.
Market positioning - marketing activities in target markets, which implies analysis of the positions of products and elemenov of the marketing mix for selected segments of the market with the aim of identifying their attributes (parameters) that contribute to the conquest of competitive advantage. If all organizations will produce the same products with the same attributes, use the same methods of promotion and delivery of the product to provide a similar service services and also have the same image, then for all consumers would be the same. Analysis of the capacity of the organization and market enables marketers to select the attributes of the product and the elements of the marketing mix, which can in a profitable way to distinguish its products from competitors' products, ie organization to carry out the differentiation of their market offerings
Psychographics - psychological research groups or individuals, particularly with respect to the characteristics, values, perceptions, preferences and behaviors. Psychographics focus on learning activities, interests and opinions. Action - this is a clear act, for example, view the newspaper, making a purchase in a store, talking with a neighbor about a new product. All of them are observable, but the reasons are rarely definable actions directly. Interest to some object (family, home, work), event (vacation, buy) or topic (for information, the topic of conversation) - is the degree of excitation, followed by a special and lasting attention. Opinion - is expressed verbally or in writing, a person's response to the situation under study (about himself, business, products, policies, etc.). It is used to describe the understanding, expectations and estimates, such as beliefs about the intentions of other people, a premonition of future events, understanding the positive and negative consequences of various behaviors. Psychography data are used in a psychographic segmentation of the market.
Lifestyle - one of the personal factors that determine the buying behavior; characterizes the life of individual behavior patterns, expressed in its interests, beliefs, actions. Lifestyle consumers usually studied by using very bulky questionnaires, sometimes up to 25 pages. In these questionnaires, consumers are asked to determine the extent of their agreement or disagreement with the statements, some of which are given below:
"I am a person who is all very carefully planned."
"In the search for entertainment, I usually leave my house."
"I usually dress for fashion, not for reasons of comfort."
"I enjoy watching sports on TV."
Research firms have developed lifestyle classifications, divided his 6-10 types, which are carried out within the framework of special studies. Marketers often develop special marketing programs targeted at groups who adhere to a particular style of life
Published in the journal "Маркетинг в России и за рубежом" (№4, 2001)