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Chpt 4 Market Segmentation Process

Chpt 4 Market Segmentation Process. Wax is back ! ! Some bands release on wax first DJs use wax in clubs to spin a unique sound bands want their music played in the clubs so people will buy the CDs example of a market segment being re-created by the “market”. Vinyl Records.

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Chpt 4 Market Segmentation Process

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  1. Chpt 4 Market Segmentation Process

  2. Wax is back ! ! Some bands release on wax first DJs use wax in clubs to spin a unique sound bands want their music played in the clubs so people will buy the CDs example of a market segment being re-created by the “market” Vinyl Records

  3. Chpt 3 discussed ROLE of mkt segmentation in developing a marketing strategy, and explained what are the bases In Chpt 4 we look at the PROCESS of market segmentation We will look at the reasons for, and process of matching product offerings to specific mkt segments Page 59

  4. Mkt segmentation can take many forms you can have one whole market you can have many small segments with a different marketing plan for each segmentTHE CORE of the firm’s strategy is to make sure the products they want to sell (the product offerings) is what the people want to buy, in each market segment Page 59

  5. To make sure you have the bestMarket Matching Strategy- you have to take the following factors into consideration Page 59

  6. Market Matching Strategy? 1. Company Resources 2. Differentiability 3. Stage in Product Life Cycle 4. Competitors Strategies 5. Size of Segment Page 59

  7. Single-Offer Strategy The attempt to satisfy a large or a small market with one product and a single marketing program. Page 60

  8. Single-Offer Strategy Usually this strategy is done by a company that does not have the money to be able to support the production and sales of many different types of products. Eg. VW “bug” Page 60

  9. Single-Offer Strategy Danger - It is very easy for a competitor company to copy your single product, and sell it at a lower price, and take away all your customers. Page 61

  10. Multi-Offer Strategy Sometimes called “Differentiated Marketing” The attempt to satisfy several segments of the market very well with specialized products and unique marketing programs aimed at each segment. Page 60

  11. Multi-Offer Strategy Levis - in the beginning - a single-offer strategy. As jeans became more popular, different styles shapes and also different types of clothing, (shirts, jackets etc.) jeans - slim, bootcut, hiphugger, bells, flare, painter pants etc. Page 60

  12. Figure 4.1Market Segmentation Decision Process

  13. Market Segmentation Decision Process - STAGES Stage I: Identify Market Segmentation Bases The process starts when a company looks at the potential customers and identifies those customers as having particular characteristics - these characteristics will allow the marketing company to classify them into market segments. The segments should be selected so that you can group together customers who have similar needs. Page 63

  14. Market Segmentation Decision Process - STAGES Stage II Develop Relevant Profiles for each Segment Once the segments have been identified - should develop a profile of the relevant customer needs and behaviors in each segment. What does your customer look like (profile) !! What do they like !! What do they do !! - you need this description to be very precise in order to make your marketing “match” the needs of the customer Page 64

  15. Market Segmentation Decision Process - STAGES Stage III Forecast Market Potentials You create a “Forecast” of the market potential within each segment. This is the “go, no-go” stage. When you are at this stage you gather the information on sales potential to determine whether you can go further ahead and justify further analysis. Forecast - “what if” - an expectation of future action. Page 64

  16. Market Segmentation Decision Process - STAGES Stage I V Forecast Probably Market Share Once the market potential has been estimated, you have to determine how much of that market you can obtain (what “market share” can you capture. Then you develop specific marketing strategy for the segments you are trying to develop. (text eg. P&G outselling Colgate, therefore Colgate strategy changes so it doesn’t compete directly) Page 64

  17. Market Segmentation Decision Process - STAGES Stage V Select Specific Market Segments Finally, you take all this information, and identify specific target markets. ie. University students who have part-time jobs, and do not have credit cards Page 64

  18. The purpose of doing this is to allow management (the bosses) to effectively employ marketing efforts “clearly delineated target markets”= specifically identified groups of potential customers Target Market Decision Analysis Page 67

  19. Figure 4.2 The Divide-the-Box Procedure Page 67

  20. Figure 4.3 Market for Airline Passenger Travel Page 68

  21. Figure 4.3 Market for Airline Passenger Travel A “tool” (method) for outlining the scope (size and range) of the market. Allows you to look at all possible market segments - AND then pick which ones you want to focus on. Once you make this grid, you can then evaluate the aspects (wants, needs and motivations) of each market segment. Page 68

  22. Product Mix the assortment of product lines available “target market decision analysis” can be used to determine the product mix being offered Using Target Market Decision Analysis in Assessing a Product Mix Page 68

  23. Example - shoes 3 types of cross trainers 4 types of basketball shoes 2 types of jogging shoes 3 types of soccer cleats etc. Using Target Market Decision Analysis in Assessing a Product Mix Page 68

  24. Developing a marketing program in such a way that the product is perceived to be very different from competitors productseg. Wendy’s square hamburgers eg. Taco Bell Product Positioning Page 70

  25. Applying The Concepts Page 70 - 71

  26. Figure 4.6 Positioning Map of Cola Market

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