Mastering Marketing

Focusing Marketing Strategy with Segmentation and Positioning

Focusing Marketing Strategy with Segmentation and Positioning

Mastering Marketing

1. Know about defining generic markets and product-markets.

2. Know what market segmentation is and how to segment product-markets into submarkets.

3. Know three approaches to market-oriented strategy planning.

4. Know dimensions that may be useful for segmenting markets.

5. Know a seven-step approach to market segmentation that you can do yourself.

6. Know what positioning is--and why it is useful.

When we finish this lecture you should

Mastering Marketing

Taking Advantage of Opportunities

Mastering Marketing

Singletargetmarket

approach

Multipletargetmarket

approach

Combinedtargetmarket

approach

Selectingtarget

marketingapproach

Homogeneous(narrow)product-markets

Segmentinginto possible

target markets

Search for Opportunities Can Begin by Understanding MarketsExhibit 3-2

Allcustomer

needs

Somegenericmarket

Onebroad

product-market

Narrowing down tospecific product-market

Mastering Marketing

Customer Needs

Customer Needs

Customer TypeCustomer Type

Product TypeProduct Type

Product-MarketDefinition

Product-MarketDefinition

Product TypeProduct Type Customer Needs

Customer Needs

Customer TypeCustomer Type

Naming Product Markets and Generic Markets

Geographic Area

Geographic Area

No Product Type in Generic Market DefinitionNo Product Type in Generic Market Definition

Mastering Marketing

Interactive Exercise: Product-Market Definition

Mastering Marketing

Market Segmentation Defines Possible Target MarketsExhibit 3-3

Broad product-market (or generic market) name goes here (The bicycle-riders product-market)

Submarket 1(Exercisers)

Submarket 2(Off-road

adventurers)

Submarket 3(Transportation riders)

Submarket 4(Socializers)

Submarket 5(Environmentalists)

Mastering Marketing

A. Product-market showingthree segments

Dependability dimension

Sta

tus

dim

ensi

on

How Far Should the Aggregating Go?Exhibit 3-4

B. Product-market showingsix segments

Mastering Marketing

Target Marketers Aim at Specific TargetsExhibit 3-5

In a product-market area

A segmenter

Using single target market approach – can aim at one submarket with one marketing mix

Using multiple target market approach – can aim at two or more submarkets with different marketing mixes

A combiner

Using combined target market approach – can aim at two or more submarkets with the same marketing mix

Mastering Marketing

Too Much Combining Is

Risky

Segmenters Try to Satisfy “Very Well”

Segmenters Try to Satisfy “Very Well”

Combiners Try to Satisfy “Pretty Well”

Combiners Try to Satisfy “Pretty Well” Too Much

Combining Is Risky

Too Much Combining Is

Risky

Combiners Try to Satisfy “Pretty Well”

Segmenters Try to Satisfy “Very Well”

Segmenting May Produce Bigger Sales

Segment or Combine?

Segment or Combine?Segment or Combine?

Segment or Combine?

Profit Is the Balancing

Point

KeyIssuesKey

Issues

Segmenting vs. Combining

Segmenting May Produce Bigger Sales

Segmenting May Produce Bigger Sales

Mastering Marketing

What Dimensions Are Used to Segment Markets?

OR

QualifyingDimensionsQualifying

Dimensions

• Relevant to including a customer type in a product market

• Help identify “core features”

DeterminingDimensionsDeterminingDimensions

• Affect the customer’s purchase of a product or brand

• Can be further segmented

Mastering Marketing

What Are the Relevant Segmenting Dimensions?

Mastering Marketing

Different Dimensions For

Different Submarkets

Different Dimensions For

Different Submarkets

Qualifying Dimensions Are Important Too

Qualifying Dimensions Are Important Too

Qualifying Dimensions Are Important Too

Qualifying Dimensions Are Important Too

Determining Dimensions May

Change

Determining Dimensions May

Change

Determining Dimensions May Be Very Specific

Determining Dimensions May Be Very Specific

Key IssuesKey Issues

Determining vs. Qualifying Dimensions

Determining Dimensions May Be Very Specific

Determining Dimensions May Be Very Specific

Determining Dimensions May

Change

Determining Dimensions May

Change

Mastering Marketing

Broader Issues in Selecting Segmenting Dimensions

EthicalIssuesEthicalIssues ExploitationExploitation

Creates Unnecessary

Wants

Creates Unnecessary

Wants

Does HarmDoes Harm

Mastering Marketing

What Dimensions Are Used to Segment Markets?

Mastering Marketing

What Dimensions Are Used to Segment Markets?

Mastering Marketing

What Dimensions Are Used to Segment Markets?

Mastering Marketing

Business-to-Business Segmentation

Mastering Marketing

Estimate Size of Product-Market Segments

Estimate Size of Product-Market Segments

Name Broad Product-MarketName Broad

Product-Market

List Customer NeedsList Customer Needs

Form HomogeneousSubmarkets

Form HomogeneousSubmarkets

IdentifyDetermining Dimensions

IdentifyDetermining Dimensions

Name PossibleProduct-MarketsName Possible

Product-Markets

Evaluate Product-MarketSegments

Evaluate Product-MarketSegments

Name Broad Product-MarketName Broad

Product-Market

List Customer NeedsList Customer Needs

Form HomogeneousSubmarkets

Form HomogeneousSubmarkets

IdentifyDetermining Dimensions

IdentifyDetermining Dimensions

Name PossibleProduct-MarketsName Possible

Product-Markets

Evaluate Product-MarketSegments

Evaluate Product-MarketSegments

Segmenting Product Markets

ProcessforSegmentingProduct-Markets

ProcessforSegmentingProduct-Markets

Mastering Marketing

ClusteringClusteringClusteringClustering

Customer DatabaseCustomer Database

More Sophisticated Techniques May Help in Segmenting

Customer DatabaseCustomer Database

Customer Relationship Management (CRM)

Customer Relationship Management (CRM)

Mastering Marketing

Cluster Analysis

Mastering Marketing

Positioning

Mastering Marketing

An Example of PositioningExhibit 3-12

High moisturizing

low moisturizing

Nondeodorant Deodorant

ZestLever 2000

Safeguard

DialLifebuoy

Tone

Dove

LuxCoast

Lava

2

1

4

5

7

38

6

Mastering Marketing

• Market

• Generic market

• Product market

• Market segmentation

• Segmenting

• Market segment

• Single target market approach

• Multiple target market approach

• Combined target market approach

• Combiners

• Segmenters

• Qualifying dimensions

• Determining dimensions

• Clustering techniques

• Customer relationship management (CRM)

• Positioning

Key Terms