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Chapter 3: Focusing Marketing Strategy with Segmentation and Positioning

Chapter 3: Focusing Marketing Strategy with Segmentation and Positioning. Narrowing down to focused strategy with screening criteria. Customers. S. W. O. T. Segmentation & Targeting. Product. Place. Company. Target Market. Differentiation & Positioning. Price. Promo.

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Chapter 3: Focusing Marketing Strategy with Segmentation and Positioning

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  1. Chapter 3: Focusing Marketing Strategy with Segmentation and Positioning

  2. Narrowing down tofocused strategy with screening criteria Customers S. W. O. T. Segmentation & Targeting Product Place Company TargetMarket Differentiation & Positioning Price Promo Competitors External Market Environment Marketing Strategy Planning Process Exhibit 3-1 3-3

  3. Finding Opportunities • Opportunity - when the right circumstances occur at the right time. • Conduct a S.W.O.T. analysis. • Differentiate to gain a competitive advantage and seize an opportunity. • Differentiation - means that the marketing mix is distinct from and better than what is available form a competitor. • Competitive advantage - firm has a marketing mix that the target market sees as better than a competitor’s mix.

  4. Four Basic Types of Opportunities Market Penetration Present Products New Products Product Development Present Markets Market Development Diversification New Markets Types of Opportunities Exhibit 3-2 3-4

  5. Considering International Opportunities Competitive Advantage Smaller World Better Trends? Early Start 3-5

  6. Selecting target marketing approach Segmenting into possible target markets Narrowing down to specific product-market Single target market approach All customer needs Some generic needs One broad product market Homogeneous (narrow) product markets Multiple target market approach Combined target market approach Narrowing Target Markets Exhibit 3-3 3-6

  7. Understanding Markets • Generic market - a market with broadly similar needs and sellers offering various ways to satisfy those needs. Examples include: • housing • transportation • entertainment • Product market - market with very similar needs and sellers offering close substitute ways of satisfying those needs. Examples include: • apartments, condos, duplexes, houses • autos, planes, trains, boats • bowling, theater, sports, miniature golf, etc.

  8. Market Segmentation • Market segmentation involves naming broad product-markets and segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. • This process involves clustering people with similar needs into a “market segment”. • A market segment is a relatively homogeneous group of people who will respond to a marketing mix in a similar way.

  9. Submarket 1 (Exercisers) Submarket 3 (Transportation riders) Submarket 4 (Socializers) Submarket 2 (Off-road adventurers) Submarket 5 (Environmentalists) Market Segmentation Broad product-market (or generic market) name goes here (The bicycle-riders product-market) Exhibit 3-5 3-8

  10. A. Product-market showing three segments B. Product-market showing six segments Status dimension Status dimension Dependability dimension Dependability dimension Market Segmentation Exhibit 3-6 3-9

  11. Segmenting a Broad Product-Market • “Good” market segments meet the following criteria: • Homogeneous (similar) within • Heterogeneous (different) between • Substantial • Operational

  12. A segmenter The Strategy Market-Oriented Approaches Using single target market approach— can aim at one submarket with one marketing mix Exhibit 3-7 3-10

  13. A segmenter Strategy One Strategy Three Strategy Two Market-Oriented Approaches Using multiple target market approach— can aim at two or more submarkets with different marketing mixes Exhibit 3-7 3-11

  14. Market-Oriented Approaches A combiner Using combined target market approach—can aim at two or more submarkets with the same marketing mix The Strategy Exhibit 3-7 3-12

  15. Segmenting Dimensions • Behavioral - examples include: • benefits sought • brand familiarity • kind of shopping • type of problem solving • rate of use • Geographic • region of world, country, region in country • size of city • Demographic - examples include: • income • gender • age • family size

  16. Positioning • Positioning refers to how customers think about proposed and or present brands in a market. • Use the marketing mix to position products in the market.

  17. Positioning of Different Bar Soaps High moisturizing • Tone • Zest 7 4 • Lever 2000 • Dove 2 5 • Safeguard • Lux 8 Nondeodorant Deodorant 3 1 • Lava • Dial “Product Space”Representing Consumers’ Perception for Different Brands of Bar Soap • Lifebuoy 6 Low moisturizing Exhibit 3-13 3-14

  18. Benefits of Perceptual Mapping • Using perceptual mapping to position a product might cause a marketing manager to: • introduce a new product for a segment with unsatisfied needs. • change a product’s promotion to make its image fit more closely with the needs and attitudes of the target market. • shift attention to another market segment where competition is weaker. • physically change the product to compete more effectively with a competitor aiming at the same target market.

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