Focusing Marketing

Strategy with
Segmentation and
Positioning

Mastering Marketing
When we finish this lecture you should

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.
Mastering Marketing
Taking Advantage of Opportunities

Mastering Marketing
Exhibit 3-2
Search for Opportunities Can Begin by Understanding Markets

Selecting
target
marketing
approach

Segmenting Single
target
Narrowing down to into possible market
specific product-market target markets approach

One Homogeneous Multiple

All Some broad target
customer generic (narrow)
product- product- market
needs market market approach
markets

Combined
target
market
approach
Mastering Marketing
Naming Product Markets and Generic Markets

Customer
Product Type
Needs

Product-Market
Definition

Geographic
Customer Type
Area

No Product Type in Generic Market Definition

Mastering Marketing
Interactive Exercise: Product-Market Definition

Mastering Marketing
Exhibit 3-3
Market Segmentation Defines Possible Target Markets

Broad product-market (or generic market) name

goes here (The bicycle-riders product-market)

Submarket 1
(Exercisers) Submarket 3 Submarket 4
(Transportation riders) (Socializers)
Submarket 2
(Off-road
adventurers) Submarket 5
(Environmentalists)

Mastering Marketing
Exhibit 3-4
How Far Should the Aggregating Go?

B. Product-market showing
A.
Status dimension six segments
three segments

Dependability dimension
Mastering Marketing
Exhibit 3-5
Target Marketers Aim at Specific Targets

In a product-market area

A segmenter A combiner

Using single target Using multiple target Using combined target

market approach – can market approach – can market approach – can
aim at one submarket aim at two or more aim at two or more
with one marketing mix submarkets with different submarkets with the
marketing mixes same marketing mix

Mastering Marketing
Segmenting vs. Combining

Combiners
Try to Satisfy
Profit Is the “Pretty Well” Too Much
Balancing Combining Is
Point Risky
Key
Issues
Segment or Segmenters
Combine? Try to Satisfy
“Very Well”
Segmenting
May Produce
Bigger Sales
Mastering Marketing
What Dimensions Are Used to Segment Markets?

Qualifying Determining
Dimensions Dimensions

• Relevant to • Affect the

including a customer’s
customer type in a purchase of a
OR
product market product or brand
• Can be further
• Help identify “core
segmented
features”

Mastering Marketing
What Are the Relevant Segmenting Dimensions?

Mastering Marketing
Determining vs. Qualifying Dimensions

Determining Determining
Dimensions May Dimensions May
Be Very Specific Change

Key Issues

Different Qualifying
Dimensions For Dimensions Are
Different Important Too
Submarkets
Mastering Marketing
Broader Issues in Selecting
Segmenting Dimensions

Ethical
Exploitation
Issues

Creates
Unnecessary
Wants

Does 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
Segmenting Product Markets

Name Broad
Product-Market

List Customer Needs

Form Homogeneous
Submarkets
Identify
Determining Dimensions

Process Name Possible

for Product-Markets
Segmenting Evaluate Product-Market
Product-Markets Segments

Estimate Size of
Product-Market Segments

Mastering Marketing
More Sophisticated Techniques
May Help in Segmenting

Clustering

Customer Database

Customer Relationship
Management (CRM)
Mastering Marketing
Cluster Analysis

Mastering Marketing
Positioning

Mastering Marketing
Exhibit 3-12
An Example of Positioning

High moisturizing

Tone 7
Zest
4
Dove Lever 2000
5 2
Safeguard
Coast
Lux 8
Nondeodorant 3 Deodorant

1
Dial
Lifebuoy
Lava
6

low moisturizing
Mastering Marketing
Key Terms
• Market • Combiners
• Generic market • Segmenters
• Product market • Qualifying dimensions
• Market segmentation • Determining dimensions
• Segmenting • Clustering techniques
• Market segment • Customer relationship
• Single target market management (CRM)
approach • Positioning
• Multiple target market
approach
• Combined target
market approach
Mastering Marketing