Segmentation Analysis: The Segmentation Analysis: The Principal - - PDF document

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Segmentation Analysis: The Principal Stages Segmentation Analysis: The Principal Stages

• Identify key variables

and categories.

• Construct a segmentation matrix
• Analyze segment attractiveness
• Identify KSFs in each segment
• Analyze benefits of

broad vs. narrow scope. Identify segmentation variables Reduce to 2 or 3 variables Identify discrete categories for each variable Potential for economies

• f scope across segments

Similarity of KSFs Product differentiation benefits

• f segment focus

2 The Basis for Segmentation: Customer and Product Characteristics The Basis for Segmentation: Customer and Product Characteristics

Opportunities for Differentiation Opportunities for Differentiation Characteristics

• f the Buyers

Characteristics

• f the Buyers

Characteristics

• f the Product

Characteristics

• f the Product

Industrial buyers Industrial buyers Household buyers Household buyers Distribution channel Distribution channel Geographical location Geographical location *Size *Technical sophistication *OEM/replacement *Size *Technical sophistication *OEM/replacement *Demographics *Lifestyle *Purchase occasion *Demographics *Lifestyle *Purchase occasion *Size *Distributor/broker *Exclusive/ nonexclusive *General/special list *Size *Distributor/broker *Exclusive/ nonexclusive *General/special list *Physical size *Price level *Product features *Technology design *Inputs used (e.g. raw materials) *Performance characteristics *Pre-sales & post-sales services *Physical size *Price level *Product features *Technology design *Inputs used (e.g. raw materials) *Performance characteristics *Pre-sales & post-sales services

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Segmenting the European Metal Can Industry Segmenting the European Metal Can Industry

F o o d F ru it J u ice P et f o o d S o ft d r in k B ee r O il S te el 3 -p iec e S te el 2 -p iec e A lu m in u m 2 -p ie ce G e n era l c an s C o m p o s ite ca n s A e ro s o l c an s F ran c e G e rm an y S p ain /Po rt. Ita ly

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Segmenting the World Automobile Market Segmenting the World Automobile Market

REGION

US& Canada W.Europe E.Europe Asia Lat America Australia Africa Luxury Cars Full-size sedans Mid-size sedans Small sedans Station wagons Passenger minivans Sports cars Sport-utility Pick-up trucks

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5 10 15 20 25 % 100% Share of industry revenue Auto loans Leasing Warranty Gasoline Auto insurance Aftermarket parts Auto rental O p e r a t i n g m a r g i n Auto manufacturing

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SEGMENT

Low price bicycles sold primarily through department and discount stores, mainly under the retailer’s

• wn brand (e.g. Sears’ “Free Spirit”);

KEY SUCCESS FACTORS

* Low-costs through global sourcing of components & low-wage assembly. * Supply contract with major retailer. Leading competitors: Taiwanese & Chinese assemblers, some U.S manufacturers, e.g. Murray Ohio, Huffy Medium-priced bicycles sold primarily under manufacturer’s brand name and distributed mainly through specialist bicycles stores; *Cost effieciency through large scale operation and either low wages or automated manufacturing. *Reputation for quality (durability, reliability) through effective marketing to dealers and/or consumers. * International marketing & distribution. Leading competitors: Raleigh, Giant, Peugeot, Fuji *Quality of components and assembly, Innovation in design (e.g. minimizing weight and wind resistence). *Reputation (e.g. through success in racing, through effective brand management). *Strong dealer relations. Similar to low-price bicycle segment. High-priced bicycles for enthusiasts. Children’s bicycles (and tricycles) sold primarily through toy retailers (discount toy stores, department stores, and specialist toy stores).

Segmentation and Key Success Factors in the U.S. Bicycle Industry Segmentation and Key Success Factors in the U.S. Bicycle Industry

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Strategic Group Analysis Strategic Group Analysis

A strategic group is a group of firms in an industry following the same or similar strategy. Identifying strategic groups:

• Identify principal strategic

variables which distinguish firms.

• Position each firm in relation

to these variables.

• Identify clusters.

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Broad PRODUCT RANGE RANGE Narrow National GEOGRAPHICAL SCOPE Global

NATIONALLY- FOCUSED, SMALL, SPECIALIST PRODUCERS e.g., Bristol (U.K.), Classic Roadsters (U.S.), Morgan (U.K.) NATIONALLY FOCUSED, INTERMEDIATE LINE PRODUCERS e.g. Tofas, Kia, Proton, Maruti REGIONALLY-FOCUSED BROAD-LINE PRODUCERS e.g. Fiat, PSA, Renault, PERFORMANCE CAR PRODUCERS e.g., Porsche, Maserati, Lotus LUXURY CAR MANUFACTURERS e.g., Jaguar, Rolls Royce, BMW GLOBAL SUPPLIERS OF NARROW MODEL RANGE e.g., Volvo, Subaru, Isuzu, Suzuki, Saab, Hyundai GLOBAL, BROAD-LINE PRODUCERS e.g., GM, Ford, Toyota, Nissan, Honda, VW, Daimler Chrysler

Strategic Groups in the World Automobile Industry Strategic Groups in the World Automobile Industry

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Geographical Scope 10 20 30 40 50 60 70 80 Vertical Balance 0.5 1.0 1.5 2.0

NATIONAL PRODUCTION COMPANIES INTEGRATED INTERNATIONAL MAJORS NATIONALLY-FOCUSED DOWNSTREAM COMPANIES INTEGRATED DOMESTIC OIL COMPANIES Chevron Royal Dutch

• Shell Gp.

Exxon

• Mobil

Statoil PDVSA Kuwait Petroleum Petronas Petrobras Repsol Nippon Tosco BP-Amoco Texaco Phillips Pemex Indian Oil ENI INTEGRATED OIL MAJORS INTERNATIONAL UPSTREAM, REGIONALLY FOCUSED DOWNSTREAM Iran NOC E.g. Neste Phillips ENI Elf-Fina-Total Repsol INTERNATIONAL DOWNSTREAM OIL COMPANIES INTERNATIONAL UPSTREAM COMPANIES Enterprise Premier Oil YPF

Strategic Groups Within the World Petroleum Industry Strategic Groups Within the World Petroleum Industry