A market is made up of people and organizations with needs, money to spend, and the desire to spend it. However, within most markets the needs and wants of buyers are not the same.
A company must deepen its knowledge of its market in order to adapt its offer and its marketing strategy to its requirements. How can the business adapt to so much diversity? Segmentation takes as its starting point the recognition that the market is heterogeneous, and aims to divide it into homogeneous groups or segments, which can be chosen as target markets for the company. Thus, segmentation implies a process of differentiation of needs within a market.
The identification and choice of market segments raises the problem of deciding the position that the company wants to occupy in those markets, that is, choosing a position for its products. One of the fundamental factors in the success of products that face competitive markets is in an adequate positioning. In a certain way, positioning could be spoken of as the way in which we will make our product or service known and how we intend to be perceived by our target market. Next we will develop these two important topics for marketing.
MARKET SEGMENTATION
- What is market segmentation?
Market segmentation is a process that consists of dividing the total market for a good or service into several smaller and internally homogeneous groups. The essence of segmentation is really knowing your consumers. One of the decisive elements of a company's success is its ability to properly segment its market.
Segmentation is also an effort to improve the accuracy of a company's marketing. It is an aggregation process: grouping people with similar needs into a market segment.
The market segment is a relatively large and homogeneous group of consumers who can be identified within a market, who have similar desires, purchasing power, geographic location, buying attitudes or buying habits, and who will react similarly to a mix of marketing.
Consumer behavior is usually too complex to be explained with one or two characteristics, several dimensions must be taken into account, starting from the needs of consumers. It is therefore recommended to present flexible market offers to the market segment. The flexible demand offering consists of: A solution that consists of elements of the product and service that all members of the segment value and options that only a few value, each option carries an additional charge.
Good segmentation should result in subgroups or market segments with the following characteristics:
- Be inherently homogeneous (similar): segment consumers must be as similar as possible with respect to their likely responses to the variables of the marketing mix and their segmentation dimensions. Heterogeneous among themselves: consumers from various segments should be as different as possible with respect to their likely response to the variables of the marketing mix Fairly large: in order to guarantee the profitability of the segment Operational: To identify customers and choose the variables of the marketing mix. The demographic dimension must be included in order to make decisions regarding the position and promotion.
1.2 Benefits of Market Segmentation.
- It enables the identification of customer needs within a sub-market and the most effective design of the marketing mix to meet them. Midsize companies can grow faster if they gain a strong position in specialized market segments. a more refined product or service offering and sets the appropriate price for the target audience Selection of distribution and communication channels is greatly facilitated The company faces fewer competitors in a specific segment New growth opportunities are generated and the company obtains a considerable competitive advantage.
1.3 Market Segmentation Process.
- ESTUDIO: Se examina el mercado para determinar las necesidades específicas satisfechas por las ofertas actuales, las que no lo son y las que podrían ser reconocidas. Se llevan acabo entrevistas de exploración y organiza sesiones de grupos para entender mejor las motivaciones, actitudes y conductas de los consumidores. Recaba datos sobre los atributos y la importancia que se les da, conciencia de marca y calificaciones de marcas, patrones de uso y actitudes hacia la categoría de los productos; así como, datos demográficos, psicográficos, etc.ANÁLISIS: Se interpretan los datos para eliminar las variables y agrupar o construir el segmento con los consumidores que comparten un requerimiento en particular y lo que los distingue de los demás segmentos del mercado con necesidades diferentes.
- PROFILE PREPARATION: A profile is prepared for each group in terms of distinctive attitudes, behaviors, demographics, etc. Each segment is named based on its dominant characteristic. The segmentation must be repeated periodically because the segments change. The hierarchy of attributes that consumers consider when choosing a brand is also investigated, this process is called market partitioning. This can reveal new market segments.
1.4 Types of Market Segmentation
- Geographical Segmentation: subdivision of markets based on their location. It has measurable and accessible features. Demographic Segmentation: It is used very frequently and is closely related to demand and is relatively easy to measure. Among the most well-known demographic characteristics are: age, gender, income, and education. Psychographic Segmentation: Consists of examining attributes related to thoughts, feelings and behaviors of a person. Using personality dimensions, lifestyle characteristics and values. Behavioral targeting: refers to the behavior related to the product, uses variables such as the desired benefits of a product and the rate at which the consumer uses the product.
| SEGMENTATION CRITERIA | TYPICAL MARKET SEGMENTS |
| GEOGRAPHIC | |
| Region | Nuevo León, northern region, southern region, eastern region |
| Size of the city or statistical area
metropolitan |
Less than 25000, 25000-100000, 100001-500000, etc.. |
| Urban-rural | Urban, suburban, rural |
| Weather | Hot, cold, dry, rainy. |
| DEMOGRAPHICS | |
| Entry | Less than 10,000, 10,000 - 25,000 |
| Age | 6-10years, 10-15, 15-20. 20-25, etc.. |
| Gender | Male Female |
| Family life cycle | Young, single, married, with children, divorced, widowed |
| Social class | High low average. |
| Scholarship | Primary, Secondary, etc.. |
| Occupation | Professional, office worker, home… |
| Ethnic origin | African, Asian, Hispanic… |
| PSYCHOLOGICAL | |
| Personality | Ambitious, self-confident… |
| Lifestyle | Activities, opinions and interests |
| Values
|
Values and lifestyles (VALS2) |
| BEHAVIORAL | |
| Desired Benefits | Depends on the product |
| Usage rate | Non-user, small user, etc… |
POSITIONING
2.1 Definition and Methodology of positioning
Positioning: it is the art of designing the offer and the image of the company so that they occupy a distinctive place in the mind of the target market.
The positioning is the mental place of the conception of the product and its image when compared with other competing products or brands, also indicates what consumers think about brands and products on the market.
Positioning is used to differentiate the product and associate it with the attributes desired by the consumer. This requires having a realistic idea of what customers think of what the company offers and also knowing what you want the target customers to think of our marketing mix and that of our competitors. To get to this, formal marketing research is required, to later graph the data that resulted and obtain a more visual panorama of what consumers think of the competitor's products. Usually the position of the products depends on the attributes that are most important to the target consumer. When preparing the graphics to make decisions regarding positioning, the consumer is asked for their opinion on various brands, including their "ideal" brand.These graphs are the perceptual maps and have to do with the “product space”, which represent the perceptions of consumers about various brands of the same product.
The positioning methodology is summarized in 4 points:
- Identify the best attribute of our product Know the position of competitors based on that attribute Decide our strategy based on competitive advantages Communicate market positioning through advertising.
It must be taken into account that positioning requires that all tangible aspects of the product, place, price and promotion support the positioning strategy chosen. To compete through positioning there are 3 strategic alternatives:
- Strengthen current position in the consumer's mind Seize vacant position Dispose or reposition competition
Due to the large amount of information that the consumer is bombarded with, “ product ladders ” are often created in the mind of our target customer, where the company that is best remembered occupies the first place, which is why companies they struggle to achieve that position. The brand that is in second place must invent a new category and be a leader in it.
A Unique Selling Proposition (USP) must be developed, highlighting a benefit, attribute or characteristic that the product offers. There is also double and even triple profit positioning, but increasing profits runs the risk of falling into disbelief and losing positioning, in order not to reach this, 4 mistakes should be avoided:
- Under-positioning: the brand is seen as one more competitor in the market. Buyers have a vague idea of the product. Overlapping: There is a narrow image of the brand. Confusing positioning: uncertain image due to asserting too much of the product and changing positioning frequently. Doubtful positioning: it is difficult for the consumer to believe the claims about the brand due to the price, features or manufacturer of the product.
2.2 Types of positioning
- Positioning by attribute: a company is positioned according to an attribute such as size or how long it has been in existence. Positioning by benefit: the product is positioned as the leader in what corresponds to a certain benefit that the others do not give. Positioning by use or application: The product is positioned as the best in certain uses or applications. Positioning by competitor: it is stated that the product is better in some way or more in relation to the competitor. Positioning by product category: the product is positioned as the leader in a certain category of products. Positioning by quality or price: the product is positioned as the one that offers the best value, that is, the greatest amount of benefits at a reasonable price.
2.3 Positioning communication
After the development of the positioning strategy, it must be communicated through key and super simplified messages that penetrate the mind of our consumer in a concrete and lasting way. This is achieved by selecting the best material to be released and focusing at all times on the perception that the client has of our product.
CONCLUSIONS
Market segmentation is a way of looking for new opportunities in the total market through real knowledge of consumers. It is carried out through a process that consists of 3 stages: Study, Analysis and Preparation of profiles.
The market segment must be homogeneous within, heterogeneous abroad, with a sufficient number of consumers to be profitable; and operational, that is, it includes demographic dimensions to be able to work properly in the place and promote the product. The segments are changing so it is important to carry out the segmentation periodically.
Positioning is the place that the product occupies in the mind of the consumer, it is also an indicator of the customer's perception of our product and marketing mix compared to other products on the market. The perceptual maps are a more visual panorama of our place with respect to the competitors and the perception that the client has of us. The product ladder refers to the position that the best remembered company occupies with respect to the others.
Through the most simplified messages, it is possible to better communicate the positioning strategy that was decided.
We can therefore assure that segmentation and positioning are complementary activities, which depend on each other so that the product manages to remain in the mind of the target consumer for a long period and even permanently.
BIBLIOGRAPHY
- STANTON, ET AL. " Fundamentals of Marketing " Ed. McGrawHIl, Mexico, 11th ed., 1999. 170-244pp.TROUT & RIVKIN. " The new positioning " Ed. Limusa, Mexico, 1996. KOTLER, Phillip. " Marketing Management. The millennium edition ”Ed. PrenticeHall, México., 2001.
MARKET SEGMENTATION AND POSITIONING
Contributed by: CLAUDIA B. ROMERO
CÉSAR SÁNCHEZ CM SABRINA TAFOYA [email protected]
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