Download Exhibit 4-1

Exhibit 4-1: Focusing Marketing Strategy with
Segmentation and Positioning
Exhibit 4-2: Relationship between Generic and
Product-Market Definitions
Exhibit 4-3: Narrowing Down to Target Markets
Exhibit 4-4: A Market Grid Diagram with
Submarkets
Exhibit 4-5: Every Individual Has His or Her Own Unique
Position in a Market—Those with Similar Positions Can Be
Aggregated into Potential Target Markets
Exhibit 4-5: Every Individual Has His or Her Own Unique
Position in a Market—Those with Similar Positions Can Be
Aggregated into Potential Target Markets
Exhibit 4-7: Relation of Potential Target Market
Dimensions to Marketing Strategy Decision Areas
Exhibit 4-8: Possible Segmenting Dimensions and
Typical Breakdowns for Consumer Markets
Exhibit 4-9: Possible Segmenting Dimensions
for Business/Organizational Markets
Exhibit 4-10: Finding the Relevant Segmenting
Dimensions
A Best Practice Approach for Segmenting
Product-Markets
Segmenting Product Markets
1. Select (name) the broad
product-market
2. Identify potential
customer needs
3. Form initial homogeneous
submarkets
Best
Practice
Approach
for
Segmenting
Product-Markets
4. Identify determining
dimensions
5. Name possible
product-markets
6. Evaluate product-market
segments
7. Estimate size of each
product-market segments
Exhibit 4-11: “Product Space” Representing Consumers’
Perceptions for Different Brands of Bar Soap
Exhibit: Segmenting the Broad Product-Market for
Motel Guests in a Large Urban Area
Computer Aided Problem
Computer Aided Problem
How Readings Relate to Market Segmentation
ƒ How changes in the external environments affect
segmentation opportunities (Chapter 3)
ƒ Introduction to market segmentation concepts (Chapter
4)
ƒ Why demographic variables are useful for segmentation
and what they tell us about the size of segments
(Chapter 5 and 6)
ƒ How understanding customer behavior leads to better
segmentation (Chapters 5 and 6)
ƒ How to improve the information on which segmentation
decisions are based (Chapter 7)
ƒ Estimating (forecasting) segment size and likely
profitability (Appendix B)
Criteria for Segmenting
Customers within a
segment should
have similar
responses to
marketing mix,
similar segmenting
dimensions
Segment should
be large enough
to be profitable
Customers in
different segments
should have different
responses to
marketing mix,
different segmenting
dimensions
Segmenting
dimensions
should be useful
for identifying
customers,
helpful in deciding
on marketing mix
Three Ways to Develop Market-Oriented
Strategies
ƒ Single Target Market Approach
– select one homogeneous segment as the target
ƒ Multiple Target Market Approach
– select two or more target segments
– develop a different marketing mix for each segment
ƒ Combined Target Market Approach
– combine submarkets into a single target market
– develop one marketing mix for the combined target
There May Be Different Demand Curves in
Different Market Segments
Examples of Possible Segmenting Dimensions
for Consumer Markets
ƒ CUSTOMER RELATED:
–
–
–
–
–
–
–
Customer needs (automobiles)
Geographic location (tire chains)
Age (insurance policies)
Sex (clothing)
Family size (child care services)
Income (vacation services)
Education (magazines)
ƒ SITUATION RELATED:
–
–
–
–
Benefits offered (toothpaste)
Consumption/use patterns (cameras)
Brand familiarity (health care products)
Buying situation (soft drinks)
Examples of Possible Segmenting Dimensions
for Business Markets
ƒ Type of organization (computer software)
ƒ Closeness of relationship with customer (travel
services)
ƒ Size (buildings)
ƒ North American Industry Classification System (NAICS)
codes (machinery)
ƒ Geographic location (electronic parts)
ƒ Type of product (X-ray film)
ƒ Buying situation (automobile components)
ƒ Source loyalty (office supplies)
ƒ Reciprocity (transporting services)
Segmenting Dimensions
ƒ Qualifying Dimensions
– Segmenting dimensions relevant to the productmarket
– Are there characteristics typical of customers who
are at least potentially interested in the relevant
product type?
ƒ Determining Dimensions
– Segmenting dimensions that affect the purchase of a
specific product or brand
– Why does a potential customer select one brand
over another?
Toothpaste Market Segment Description
Segment Name
Principal benefit
sought
Demographic
strengths
Special
behavioral
characteristics
Brands
disproportionately favored
Personality
Characteristics
Life-style
characteristics
The sensory
segment
Flavor, product
appearance
Children
The sociables
segment
Brightness of
teeth
Teens, young
people
The worriers
segment
Decay
prevention
The
independent
segment
Price
Large families
Men
Users of
spearmint
flavored
toothpaste
Smokers
Heavy users
Heavy users
Colgate, Stripe
Macleans, Plus
White Ultra Brite
Crest
Brands on sale
High selfinvolvement
High sociability
High
hypochondriasis
High autonomy
Hedonistic
Active
Conservative
Value-oriented
Customer Relationship Management (CRM)
ƒ With customer relationship management (CRM)
approaches, the seller fine-tunes the marketing effort
based on information from a detailed customer
database
– Database often includes information about customer
characteristics, including past purchases and spending
– Database may be used to select target customers for specific
offer or promotion
ƒ Some examples
– A customer who in the past has purchased shirts from L.L.
Bean may be a good prospect for sweaters, and will receive a
special targeted catalog or email.
– A bank teller might suggest that a customer open a savings
account or buy a certificate of deposit if the customer’s account
balance is over $2000.
Positioning and Differentiation
ƒ Positioning analysis is based on how (potential)
customers think about a firm's current or potential
offering
ƒ Positioning considers how customers think about
competitors' offerings as well as the firm’s own offering
ƒ Positioning analysis identifies what kind of offering
different segments see as ideal
ƒ Differentiation focuses on developing a marketing mix
that target customers will see as distinct from
competing mixes
ƒ Positioning and differentiation help with combining and
segmenting, by revealing which segments view the
market in similar (or dissimilar) ways