pharmAd2

Module 4

Segmentation, Targeting and

Positioning
Condensed by: Sonia S. Morales, RPh, MSPharm
 Segmentation

A marketing term referring to the

aggregating of prospective buyers into
groups (segments) that have common
needs and will respond similarly to a
marketing action. It divides an audience
into subgroups to identify specific
attitudes, beliefs, patterns, or trends.
 Persuasive messages target the niche
group on the basis of their unique
characteristics
 It also means. . .
 To divide the marketplace into parts, or
segments, which are accessible, actionable,
defendable, definable, differentiable,
measureable, and profitable and have a
growth potential. Why? Because a company
will find it impossible to target the entire
market (time, cost and effort restrictions). It
needs to have a ‘definable’ segment – a mass
of people who can be identified and targeted
with reasonable effort, cost and time.
 How to differentiate
market segments
 Homogeneity – common needs within
segment
 Distinction – unique from other groups
 Reaction – similar response to market
 Ex.An athletic footwear company might
have market segments for basketball
players and long-distance runners. As
distinct groups, basketball players and long-
distance runners will respond to very
different advertisements
 Segmentation may involve any of
the following:
• Age • Education
• Gender • Language
• Culture/ • Lifestyles
ethnicity • Location
• Class • Sports,
• Illnesses, hobbies
disabilitie • Income
s
 example 1: metro versus
retro sexuals
 The “Man Study” by the Leo Burnett
advertising agency, which created
the Marlboro Man, found that half of
all men report that they don’t know
what is expected of them in society.
 three-quarters of men think that
images of men in advertising are out
of touch with reality.
 Most ads have lumped men into one
of two groups -- the soft, caring type
known as "metrosexuals," who are
comfortable with facial peels and
pink shirts, or the stereotypical
"retrosexuals," who remain
guiltlesslly addicted to beer and
sports.
 Segmenting male consumers
 Metrosexuals: straight  Retrosexuals (“real men”):
urban men who are into straight males who are
style, fashion more macho, prefer sex
 wear designer clothes role differentiation
 like fine cuisine  watch Nascar
 get expensive haircuts  Play Xbox 360 and
 get waxed Sony PS2
 like Carl’s Jr.
 enjoy shopping at
 use power tools
Banana Republic
 enjoy shopping at Bass
Pro
 Nivea
 Avon
 General
Mills
 Home Depot
 What are
some
commonly
used
demographi
c,
geographic
and
behavioral
descriptors?
 Advantages and
disadvantages
 Identify a new  micro-marketing can
audience / market be costly
 tailor message to a  More time, effort,
specific audience expense to develop
individual messages
and strategies
 If a brand is
associated with one
subgroup it may be
shunned by other
subgroups
 Example 2: marketing to
gays and lesbians
 There are lots of
gays/lesbians
Kinsey Report pegs 10%
of the population as
being gay. 6-7% openly
identify themselves as
gay/lesbian, with higher
concentrations (12%) in
large urban areas.
 Gays as upscale consumers
 Gays/lesbians have
considerable purchasing
power
 generally better educated,
more affluent
 more tech savvy,
computer literate
 tend to be trendsetters,
“early adopters,” of
technology
 politically involved
 Gays as a niche group
 Advertising to gays/lesbians
is perceived as a form of
social validation
 77% of gays report
changing to brands that
are gay friendly.
 mygayweb.com reports
that 78% of gay online
users prefer to buy from
companies that market to
the GLBT community.
 example:“gay friendly”
hotels, tour operators
 insensitive campaigns
may backfire
Gay friendly ads
 Example 3: Marketing to
hispanic teens
 There are lots of Hispanic teens
 As of the 2000 U.S. Census,
Hispanic youth ages 12-20
had become the largest
ethnic youth population
 Nearly 40% of Hispanics are
under age 20
 By 2010, nearly 1 in 5 young
people in the United States
will be Hispanic
 By 2020, the Hispanic teen
population is expected to
grow 62% compared to 10% http://video.google.com/
videoplay?docid=-
for U.S. teens overall. 4484245883891789484&q=sp
 A larger percentage of anish+commercial&hl=en

children (ages 0-4), 17+%,

 Hispanic teens are bilingual
(duh!)
 Hispanic teens are more bilingual than
their adult counterparts.
 about 75 percent of U.S. Hispanics speak
Spanish at home.
 96 percent of Hispanics use at least
some Spanish at home and 86 percent
do so at work or school.
 Nielsen reports that half of Hispanic-
American households are thought to
prefer watching programs in Spanish.
 a majority (69 %) of Hispanics get more
information about a product when it is
advertised in Spanish than when it’s Target ad
advertised in English only.
 Hispanic teens as a niche
group
 Hispanic teens have buying
power
 The average Hispanic teen spends
$320 a month, 4% more than the
average non-Hispanic, and one out
of five teens in the U.S. is Hispanic`.
 18- to 24-year-old Hispanics are the
most brand-loyal demographic
segment in the U.S.
 Hispanics teens have their feet in
two cultures
 Hispanic teens are holding on to
their culture
 Retro-acculturation
 Hispanics exhibit more brand
loyalty and less cynicism than
 Hispanic friendly
marketing
 Accommodation
Theory suggests that
bilinguals are attuned
to advertisers who go
out of their way to
reach them in Spanish.Victoria Justice
 Persuaders should
speak to an audience's
cultural identity. The
message should be
relevant and resonate
with the culture. Selena Gomez
Pharmaceutical industry
segmentation
 Segmentation in the
Pharmaceutical Industry
 Not difficult to attain (customer needs always
at the top of agenda because the products are
specifically tailored to meet customer needs)
 Unlike other businesses, e.g. footwear industry,
drug development is different. Through years
of production, drugs rose out of a conscientious
process of discovery: compounds were
screened for pharmacological activity, then
manufacturers looked for patients .whom the
drugs might benefit
 Patient needs have become the more impt
driver in drug discovery. Do you agree?
 Difference of ph’cal drug
devt from other
businesses
 Extensive trial process (from pre-
clinical devt, through applications
for use of drugs in human
subjects, thru all the clinical
phases)
 Applications for marketing
 Negotiations on trade names,
pricing and reimbursement
 Pharmaceutical industry
pressures in the new
millennium
External Internal
Global consolidation and Lack of critical mass
integration
Portfolio rationalization Need to shorten time to market
and peak sales
Increasing competition Reduced level of marketing and
clinical expertise
Technological change Sub-optimal marketing/medical
interface
Government drives to reduce Cutbacks in R&D spend
healthcare drug costs
Formulary restrictions Data saturation – poor definition
and leverage of critical strategic
information
Need to demonstrate therapeutic
value in specific patient
Are pharmaceutical
companies using
segmentation to its
maximum potential?
What can the direction and
value of market
segmentation add to brand
development?
 Segmentation Approaches
 Needs-based segmentation – based on customer
needs. A process of segmenting the market
based on understanding the needs of the end
user. This drives product devt and brand
strategy
 Characteristics-based segmentation – based on
the characteristics of the customer and area. It
is the process of segmenting customers based
on their characteristics, attitudes or behavior.
This drives devt and execution of customer
strategy and targeting (which customers should
be targeted and how they can be accessed)
 Segmentation

If you’re not thinking segments, you’re not

thinking. To think segments means you have
to think about what drives customers,
customer groups, and the choices that are or
might be available to them.
—Levitt, Marketing Imagination
 Targeting
After arriving at segments, the
company has to target certain
segment based on
 SWOT Analysis
 Sustainable Competitive Advantage
 Evaluation of current and future
resources
 Product Life Cycle
 Sales Force capability
 In-house talent pool
 Targeting
 Selecting a demographic or other
group of people to advertise to,
and create advertisements
appropriately
 To make a thing or group of things
a target, to select it or them to be
acted upon.
 Marketing efforts are directed on
this group
 Target Market
 The consumers a company wants
to sell its products and services to,
and to whom it directs its
marketing efforts. Why? Not all
products and services are meant
for all types of consumers. Ex.,
amount of sugar in a softdrink. It
is more likely to be purchased by
consumers with varying tastes.
 Importance of Target
Marketing
 It gives a business devotion to a
certain sector of audience that they
are making their merchandise for and
give the business a customer base.
 It helps in the selection of the
appropriate advertising media when
marketing the product or the service.
 Lack of a target audience will spell
doom for any business
How should you plot out
your target market?
 Identifycommon characteristics of
your target market, their spending
habits
 What traits do your consumers
share with each other?
 What needs do they share?
 Where do they live?
Whyis it important to
know who your target
market is?
 Youcan design your marketing message,
NOT around what you are capable of
achieving or how your company stands out
among the rest, but IDENTIFY their need and
your solution that can fill it.
 Make your customer’s specific need and your
specific solution the focus of your message
 You can save on advertising costs, time and
energy and
 you make your marketing more organized
 By really taking the time to hone in on your
target market, and focusing your marketing
efforts to that smaller group, you will see drastic
improvement to your response ratings and more
positive feedback from customers.
 Relevance. . .
To focus on marketing to only your target
market is like shooting one arrow directly and
accurately at the bulls-eye.

To just do broad all-encompassing marketing

campaign is to shoot 10 arrows into the sky and
hope that one happens to fall on the bulls-eye,
which is unlikely.
 What is Positioning?
 Creating distinct and valued physical and
perceptual differences between one’s
product and its competitors, as perceived by
the target customer.
 An effort to influence consumer perception
of a brand or product relative to the
perception of competing brands or products.
 Theact of designing the firm’s market offering so
that it occupies a clear, unique, distinct and
advantageous position in the minds of its target
customers.
 Positioning
 Most impt job of a marketer as this is
the first message that goes outside!
 Based on product attributes, real and
perceptual
 Wrong positioning leads to wrong
message and cascading effect all the
way down to a flop!
 Once you are positioned, it is not
easy to shift
 Example of STP:
Segmentation (for Carpet
Fibers) Perceptions/Ratings for one respondent:
Customer Values

Strength
. .. . .
.A. .. ..
.
. .
D. . .
... ....
. Distance between

. .
(Importance)
B. . C. .
segments C and D

.. .. . . .. . .. .
.. . .
A,B,C,D:
Location of
segment centers. .. . .
Typical members:
A: schools
B: light commercial
C: indoor/outdoor
carpeting Water Resistance
D: health clubs
(Importance)
 Targeting
Segment(s) to serve

.. . . .
.. ... .
. . .... .. . .
.
Strength
(Importance) . .
.. ... . . .
.. . . .. ... .
.. . .
Water Resistance
(Importance)
 Positioning
Product Positioning

.. . . .
Us

.. ... .
Comp 1
Comp 2 .. . .
Strength
(Importance) . .
.. ... . . .
.. . . .. ... .
.. . .
Water Resistance
(Importance)
 Positioning - Questions to ask
internally:

1. What is the licensed indication by the FDA?

2. What are the different therapeutic segments to
cover?
3. How many physicians?
4. SWOT/Competition/Patent Protection
5. USP vs other products?
6. Can clinical trials support the message?
7. Amount of resources?
8. Can we prove/convince authority/doctors if we
have undefined MOA? This will be difficult to
sell!!!
 Steps in the Positioning
Process
Exhibit 7.4 (1 of 2)

1. Identify relevant set of competitive products serving a target

market.

2. Identify the set of determinant attributes that define the “product space” in
which positions of current offerings are located.

3. Collect information from a sample of customers and potential

customers about perceptions of each product on the determinant
attributes.

4. Determine product’s current location (positioning) in the

product space and intensity thereof.
 Steps in the Positioning
Process
Exhibit 7.4 (2 of 2)

5. Determine customers’ most preferred combination of determinant

attributes.

6. Examine the fit between preferences of market segments and current

position of product (market positioning).

7. Write positioning statement or value proposition to guide

development and implementation of marketing strategy.

Evaluate Company Performance

 Two Dimensional
Positioning
Efficacy

Safety
 Examples of Product
Positioning
 Dosage
 Formulations
 Drug Delivery/Technology
 MOA
 Drug-drug Interactions
 Safety in Children and Pregnant Women
 Product class
 Packaging
 Reimbursement
 Onset of Action
 Discussion Question


 What’s the tangible

output of the
positioning process?
1. Positioning Statement for
Volvo in North America

 For upscale American families,

Volvo is the family automobile that
offers maximum safety
 Generic format for positioning
statements: For (target market),
(brand) is the (product category)
that (benefit offered).
2. Value Proposition for
Volvo
in North America
 Target market: Upscale American
families
 Benefits offered: Safety
 Relative price: 20% premium to
domestic family cars
 Generic format for value
propositions:
 Target market
 Benefits offered (and
sometimes not offered)
 Relative price
 Some Key Questions
Concerning Positioning
Decisions
 For whom are they written?
For whom are they written?
 In what sort of language?
 Should they focus on features or
benefits? Should they be written in
catchy consumer language or “plain
prose”? (Class: give examples of
catchy current tag lines and
positioning they represent)
 How many differentiating attributes
should anchor them?
 Examples
 Nike
 Apple
 McDonald’s
 L’Oreal
 California
Milk Processor Board:
"Got Milk?"
M&M: "Melts in Your Mouth, Not in Your Hands"
Lay's: "Betcha Can't Eat Just One"
Meow Mix: "Tastes So Good, Cats Ask for
It by Name"
The New York Times: "All the News That's Fit to
Print"
MasterCard: "There are some things money
can't buy. For everything else, there's
MasterCard."
Southwest Airlines: "Ding! You are now free to move
about the country."
 Famous tagline of Banks in the
Philippines

 Citibank
Citibank “Citi
“Citi never
never sleeps”
sleeps”

 Metrobank
Metrobank “You’re
“You’re in
in good
good hands
hands with
with Metrobank”
Metrobank”

 Bank
Bank of
of the
the Philippine
Philippine Islands
Islands (BPI)
(BPI) “We’ll
“We’ll take
take you
you farther”
farther”

 Banco
Banco de
de Oro
Oro (BDO)
(BDO) “We
“We find
find ways.”
ways.”

 Rizal
Rizal Commercial
Commercial Banking
Banking Corporation
Corporation (RCBC)
(RCBC) “Moving
“Moving Forward”
Forward”

 Land
Land Bank
Bank of
of the
the Philippines
Philippines (LBP)
(LBP) “Ang
“Ang Bangkong
Bangkong MayMay Damdaming
Damdaming Bayan”Bayan”

 Development
Development BankBank of
of the
the Philippines
Philippines (DBP)
(DBP) “The
“The Bank
Bank for
for all
all Filipinos”
Filipinos”

 Philippine
Philippine National
National Bank
Bank (PNB)
(PNB) “…The
“…The Name
Name youyou can
can bank
bank upon”
upon”

 Union
Union Bank
Bank of
of the
the Philippines
Philippines (UBP)
(UBP) “Driven
“Driven with
with Passion.
Passion. Powered
Powered by by Excellence
Excellence

 Chinabank
Chinabank oror China
China Bank
Bank (China
(China Banking
Banking Corporation)
Corporation) “Your
“Your success
success is
is our
our business”
business”
 Others?


 A Useful Tool for Positioning
Decision Making: Perceptual
Maps
Not Sweet

Sweet

Nutritious Not Nutritious

Where would you plot your favorite cereals?
Your kids’ favorites? Your grandma’s?
 Discussion Question

 What is
positioning’s role
once a product’s
positioning strategy
has been determined?
 Positioning is the foundation from which
marketing mix decisions are made
• Product decisions: What features are
needed to deliver the required benefits?
• Pricing decisions: How should the
product be priced relative to competition?
• Promotion: What should promotional
messages say to create the desired
perception in the target customer's mind?
• Place: Through what channels should the
good or service be marketed to create
the desired perception in the target
customer's mind?
 Positioning Green
 FedEX
 Fast, reliable on-time delivery
 Southwest Airlines
 Affordable, no-frills air travel
 Rolex
 Status-symbol fashion accessory
 Ebay (Lazada, AliExpress, etc.)
 Thevirtual marketplace to buy or sell
anything
 A Note on Positioning
Positioning involves designing an
offering so that the target segment
members perceive it in a distinct and
valued way relative to competitors.

Three ways to position an offering:

1. Unique (“Only product/service with XXX”)
2. Difference (“More than twice the [feature] vs.
[competitor]”)
3. Similarities(“Same functionality as [competitor];
lower price”)

What are you telling your targeted

segments?
Pharmaceutical Branding
 Case Scenario
You are a recent pharmacist graduate and
have just started a community residency at a
local independent full-service pharmacy. The
pharmacy is located a mile away from a major
university in a large college town and services
patients of all ages, including children, adults,
the elderly, and college students. The
pharmacy accepts all insurance plans,
provides consultation and immunization
services, offers MTM, and has a large selection
of OTC medications and nutritional products.
It is a professional site and does not carry gifts
or food.
 The owner of the pharmacy has not
invested much time or energy in learning
how he might use the Internet or social
media sites to expand his business. He
has a basic website that was designed for
him by his son and has never used email
announcements or sites such as Facebook
or Twitter.
Your first task as a resident is to
develop a marketing strategy that will be
especially appealing to younger clientele.
You do not necessarily have to create the
strategy yourself, but you have to be able
to find
someone to do it for the pharmacy and
communicate your pharmacy’s and
customers’ wants and needs.
What are some of the things you
must consider in developing your plan
and where would you start? You will also
be in charge of directing this person on
finding content, developing newsletters,
and approving anything that would be
put on the Internet or emailed to
patients.