Fourth seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics, http://www.hhs.se/EDUCATION/MSC/MSCGM/Pages/default.aspx

1. Seminar 4
Managing Marketing Processes
----
Identifying Market Segments and Targets:
Exploring Segmentation, Targeting, and
Positioning
Robin Teigland
Master of General Management
Stockholm School of Economics
September 10, 2013

2. Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
2

3. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-3
What is a Marketing Plan?
A marketing plan is the
central instrument for
directing and coordinating
the marketing effort.
It operates at a strategic and tactical level.
McDonald, M. (2006) Strategic Marketing Planning: Theory
and Practice, The Marketing Review, 6, 375-418.

4. A marketing plan ≠ A business plan
4
Wide overview of
business, eg mission,
goals, strategy, staff,
operations, location,
marketing, financial
Often used as
financial tool to see if
business viable
Business Plan
Marketing Plan
Details actions to fulfill
mission and goals.
Identifies business price
points, target markets,
and competition and
explains how business
generates customers
http://smallbusiness.chron.com/difference-between-marketing-business-plan-1682.html
But they are
interdependent!

5. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-5
Levels of a Marketing Plan
 Strategic
 Target marketing
decisions
 Value proposition
 Analysis of
marketing
opportunities
 Tactical
 Product features
 Promotion
 Merchandising
 Pricing
 Sales channels
 Service

6. Marketing Plan Contents
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
2-6
 Executive Summary
 Table of Contents
 Situation Analysis
 Marketing Opportunity Assessment
 Marketing Strategy
 Financial and Marketing Goals and Budgets
 Implementation and Controls
 References

7. Marketing Plan Group Assignment
 Assume role of a “marketing manager” and
select an existing Swedish company within a
specified industry
 Develop a marketing plan for a product or
service not currently offered by your company to
be launched on the Swedish market
 Completely new-to-the-world or can be new just to
your company.
 Write a comprehensive marketing plan profiling
the competitive strategy to bring that product or
service to the Swedish market.
7

8. 75–80%75–80% of new products being launched fail.
Common reasons are:
 The idea is good, but the market share isThe idea is good, but the market share is overratedoverrated..
 The product itself is not developed enough.
 The new product is badly positioned on the market, not
well-known enough, is priced too high or has the
”wrong” packaging.
 The management wants to see their favourite ideas
become products against all market research.
 Developing costs are higher than anticipated.
 Competitors put up more of a fight than anticipated.
GfK 2012

9. Marketing Plan Teams
9
MGM MARKETING - MARKETING PLAN
FALL 2013
GROUPS PREFERENCES COMPANY
DRAGON B2C (Fortune 500) Product H&M
OPERATION BRAHMA B2B SME (<250) Product VETROLIFE
ORANGE B2C SME (<250) Product ASSESSIO
PEAK PERFORMANCE B2B SME Service TENANT & PARTNER
THE MOJITOS B2C (Fortune 500) Service SPOTIFY
THE TRANSFORMERS B2C SME Services LINAS MATKASSE

10. Presentations
 September 13, 9:15-12:00 Initial Presentation
 Max 10 minute presentation by each Team
 5 minutes for discussion by Feedback Team
 Upload Feedback1_Team#.doc to Courseweb and
email to respective team by September 13, 17:00
 September 26, 9:15-13:00 Final Presentation
 Max 10 minute presentation by each Team
 5 minutes for discussion by Feedback Team
 Upload Feedback2_Team#.doc (3 page max Word
doc) to Courseweb and email to your respective team
by September 27, 17:00

11. Passport Gmid
 Euromonitor International
 Global Market Information Database
 Market statistics on industries, countries and
consumers (8 million +)
 Market reports, company reports and
country reports (18 000 +)
Excellentresource!!

12. Final Report – October 4, 17:00
 15 pages Plan + 3 pages Accounting Appendix in MS Word Doc
 Not including title page, executive summary, table of contents, references or other
appendices
 Single-spaced, 12 Times Roman, numbered pages, 2.54 margins
 All sources documented in proper manner
 See www.plagiarism.org for more information on how to cite and document sources.
 The marketing plan is evaluated according to three criteria:
 Professional Written and Oral Communications
 Critical Thinking Involving Analysis and Understanding of Theoretical Concepts and
Frameworks that Build Your Argument
 Creative and Original Content yet Feasible Plan
 Integration with Using Accounting Reports
 Separate 3 page Appendix evaluating financial consequences of proposed
marketing plan: detailed month-to-month analysis of impact on company’s financial
statements and quantitative evaluations of the proposed investment using capital
budgeting techniques covered in “Using Accounting Reports”.
 Each group member contributes to the assignment in fair proportion
12

13. Independent Research – Get Started Now
 Start researching
 Use library’s databases and library staff
 Determine what data you need to collect and how

Databases, Qualtrics, focus groups, interviews, etc.
 Contact any relevant people
 Follow related topics on twitter: marketing, industry
product, etc.
 Blog, tweet, post, etc. about what you find
 #SSEMGM2013
 Share with one another!
13

14. Swedish Company and Industry Info
 International: Orbis and Factiva
 Swedish specific (In Swedish): Retriever and
Affärsdata
 Under Company Databases in library
 Company information, e.g., annual reports for past 10 years
 Similar in number of companies in database
 Retriever is more user friendly than Affärsdata

Own sector classification vs SIC for Affärsdata

Can filter search better

Creates reports in PDF or Excel
 Both have extensive news/article database

Affärsdata has better coverage, e.g., Veckans Affärer

Retriever has Svenska Dagbladet och Dagens Industri
14

15. 15

16. Friday Assignment – Marketing Plan
 What do you think the marketing plan needs to accomplish in order to lead
the company closer to its strategic goals?
 Develop an initial idea for a product/service that you would like to launch
for this company on the Swedish market. Motivate your choice of this
product.
 What do you need to do to develop an understanding of the markets and
potential customers of your product? What market research do you need to
conduct? What steps will you take to do this?
 What are your initial ideas for STP for this product?
 What are your next steps in order to plan the direction, objectives, and
marketing support for the marketing plan?
16

17. Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
17

18. Aqualisa
 What is the Quartz value proposition to plumbers? To
consumers?
 Why is the Quartz shower not selling?
 Aqualisa spent three years and €5.8 million developing the
Quartz. Was the product worth the investment? Is Quartz a
niche product or a mainstream product?
 What should Harry Rawlinson do to generate sales
momentum for the Quartz product? Should he change his
marketing strategy to target consumers directly, target the
DIY market, or target developers? Should he lower the price
of the Quartz? Or should he do something different
altogether?
18

19. Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
19

20. http://en.wikipedia.org/wiki/Henry_Ford
Ford’s Model T: Mass Market Approach
Any customer can have a
car painted any color that
he wants so long as it is
black.
-Ford in his autobiography

21. CHP: 8&10-21
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment

22. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-22
What is a Market Segment?
A market segment consists of a
group of customers who share a similar
set of needs and wants.

23. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-23
Approaches to Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
1. Descriptive:
Start with consumer
and then look at needs
2. Behavior & Attitudes:
Start with product and
then look at descriptives

24. Geographic Segmentation
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-24

25. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-25
Demographic Segmentation
 Age and family size, lifecycle
 Gender
 Income
 Occupation
 Education
 Religion
 Race
 Generation
 Social class
 Nationality, race and culture

26. Age and Lifecycle Stage
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-26

27. Gender and Income
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-27

28. Generational Influences
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-28

29. Nationality, Race and Culture
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-29

30. Psychographic Segmentation:
the VALS (Values, Attitudes, Lifestyles)
Framework
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-30 http://en.wikipedia.org/wiki/VALS
Divide into different groups based on
psychological/personality traits
•Lifestyle
• E.g., culture, sports, outdoor
•Personality
• E.g., compulsive, authoritarian

31. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
7-31
Approaches to Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
1. Descriptive:
Start with consumer
and then look at needs
2. Behavior & Attitudes:
Start with product and
then look at descriptives

32. Rising Interest in Ethnography
“Ethnography or observational research has
drawn significant attention recently, not only in
the market research and marketing fields but in
the mass media as well …all starts by doing
something simple – keenly watching
consumers, fact to face, knee to knee and
listening, with ears, eyes, heart, brain and your
intuitive sixth sense.”
Procter & Gamble
ex-CEO A.G.
Lafley
Tesco: http://www.youtube.com/watch?v=fGaVFRzTTP4

33. CHP: 8&10-33
Behavioral Segmentation
Decision Roles
 Initiator
 Influencer
 Decider
 Buyer
 User
Behavioral Variables
 Occasions
 Benefits
 User Status
 Usage Rate
 Buyer-readiness
 Loyalty Status
 Attitude

34. CHP: 8&10-34
Behavioral Segmentation Breakdown

35. GFE Associates: Analysis of Attitudinal
Clusters in U.S. Television Households
35

36. CHP: 8&10-36
Segmenting for Business Markets
Demographic segmentation
– Industry, company size, location
Operating variables
– Technology, usage status, customer capabilities
Purchasing approaches
– Purchasing-function, power structure, nature of
existing relationships, general purchase policies,
purchasing criteria
Situational factors
– Urgency, specific application, size of order
Personal characteristics
– Buyer-seller similarity, attitudes toward risk, loyalty

37. CHP: 8&10-37
Size, purchasing power, profiles
of segments can be measured.
Segments can be effectively
reached and served.
Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
Segments must respond
differently to different marketing mix
elements & programs.
Effective programs can be
designed to attract and serve the
segments.
Effective Segmentation Criteria

38. CHP: 8&10-38
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment

39. CHP: 8&10-39
Market Targeting
Evaluating Market Segments
 Segment Size and Growth
 Analyze current sales, growth rates and expected
profitability for various segments.
 Segment Structural Attractiveness
 Consider effects of competitors, availability of
substitute products and, the power of buyers &
suppliers (five forces).
 Company Objectives and Resources
 Company skills & resources needed to succeed in
that segment(s).
 Look for Competitive Advantages.

40. CHP: 8&10-40
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 2
Company
Marketing Mix 3
Company
Marketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Market Targeting
Market Coverage Strategies

41. Targeting Strategies
41
http://www.globalspec.com/reference/47105/203279/undifferentiated-concentrated-and-
differentiated-targeting-strategies

42. CHP: 8&10-42
Patterns of Target Market Selection

43. CHP: 8&10-43
Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Segmentation
1. Identify bases for
segmenting market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment
Market Positioning
5. Develop positioning for
target segments
6. Develop marketing
mix for each segment

44. Diffusion of Innovation - Rogers
44http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png

45. Crossing the Chasm - Moore
45http://www.10xfactor.com/Bookstore_Ten_Best_Book5.html

46. Seminar 4 Overview
 Marketing Plan Group Assignment
 Aqualisa Quartz Case
 STP
46