Tuesday, November 23, 2010

Business Marketing Principles. 5 Market Positioning Process. 5 Bases For Market Segmentation.

Positioning is the process of reaching market segments. It distinguishes a branded product or service from its competitors so that it becomes the preferred brand in defined segments of the market. Positioning can focus on new brands but may also involve repositioning existing brands.
Positioning is a means of achieving marketing objectives by ensuring that the right product is developed at the right price in the right segment of the market.

The Positioning Process
The five sequential steps in the process of positioning are:
    Carry out market research to gain understanding of consumer wants and needs and to identify gaps (gap analysis)  which existing, modified or new company products or services could fill.
    Develop segmentation and targeting strategies.
    Establish the relevant attributes that are used by customers in the segment evaluating and choosing between brands in this market.
    Analyse these attributes by 'brand mapping' to assess the current perceived position of existing brands in the market.
    Determine the positioning strategy.

A market segment is a group of customers sharing particular wants or needs. Market segmentation divides the total market available to the company into segments that can be targeted with specially developed and marketed products and that can form the basis for positioning the product in the market.
Segmentation concentrates the minds of those responsible for marketing policies and plans to look for specific marketing opportunities and to develop an appropriate marketing mix that fits in with the requirements of identified market segments and the resources and skills of the company.

Bases For Segmentation
The main bases for segmentation are as follows:
    Consumer preferences – for specific product attributes.
    Benefits sought by customers – for example, quality, prestige, durability and economy.
    Demographic variables – the market can be segmented according to demographic variables such as age, sex or social class. The following socio-economic group classification system is often used:
o    A Upper middle class – higher managerial, administrative or professional people.
o    B Middle class – intermediate managerial, administrative or professional people.
o    C1 Lower middle class – supervising, clerical and lower managerial administrative or professional people.
o    C2 Skilled working class – skilled manual workers.
o    D Working class – service and unskilled manual workers.
o    E Pensioners, widows and casual or lowest-grade workers.
    Buying behaviour – where people buy, their readiness to buy (degree of awareness of the product), the amount they buy (light, medium and heavy users) and their loyalty to the brand (hard core, shifting, switchers).
    Lifestyle a person's lifestyle is his or her pattern of living in the world. Lifestyles are assessed by psychographics, which list variables under three dimensions: activities, interests and opinions. These are analysed to reveal lifestyle groups.



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