Chapter 3:

Focusing
Marketing Strategy with
Segmentation and
Positioning

For use only with Perreault and McCarthy texts.

© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Chapter 3 Objectives
When you finish this chapter, you should
1. Understand why marketing
strategy planning involves a
process of narrowing down
from broad opportunities to a
specific target market and
marketing mix.
2. Know about the different
kinds of marketing
opportunities.
3. Understand why opportunities
in international markets
should be considered.
4. Know about defining generic
markets and product-markets.
3-2
5. Know what marketing
segmentation is and how to
segment product-markets
into submarkets.
6. Know three approaches
to market-oriented strategy
planning.
7. Know dimensions that
may be useful for
segmenting markets.
8. Know what positioning
is— and why it is useful.
10. Understand the
important new terms.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Marketing Strategy Planning Process

Narrowing down to focused strategy with screening criteria

Customers
Segmentation Product Place
S. & Targeting
W. Target
Company O. Market
T. Differentiation
& Positioning Price Promo

Competitors

External Market Environment

Exhibit 3-1
For use only with Perreault and McCarthy texts.
3-3 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Types of Opportunities
Four Basic Types of Opportunities
Present Products New Products

Present Markets
Market Product
Penetration Development

New Markets
Market
Development Diversification

Exhibit 3-2
For use only with Perreault and McCarthy texts.
3-4 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Considering International Opportunities

ld

Co va
or

Ad
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W

pe g
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t it e
al

ive
Sm

s ?
nd
e
Ea

Tr
r

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ly

tte
St

Be
ar
t

For use only with Perreault and McCarthy texts.

3-5 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Narrowing Target Markets

Selecting
target
marketing
approach

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

All Some One Homogeneous Multiple

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

Combined
target
market
approach
Exhibit 3-3
For use only with Perreault and McCarthy texts.
3-6 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Generic and Product-Market Definitions

Generic
Market
Definitions

Customer Customer Geographic Product type

(user) needs + types + area + (good and/or service)

Product-
Market
Exhibit 3-4
Definitions
For use only with Perreault and McCarthy texts.
3-7 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Market Segmentation

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)

Exhibit 3-5
For use only with Perreault and McCarthy texts.
3-8 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Market Segmentation

A. Product-market showing B. Product-market showing

three segments six segments
Status dimension

Status dimension

Dependability dimension Dependability dimension

Exhibit 3-6
For use only with Perreault and McCarthy texts.
3-9 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Market-Oriented Approaches
A segmenter

The
Strategy
Using single target
market approach—
can aim at one
submarket with one
marketing mix

Exhibit 3-7
For use only with Perreault and McCarthy texts.
3-10 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Market-Oriented Approaches
A segmenter

Strategy
One
Using multiple target
market approach—
Strategy can aim at two or
Three more submarkets
with different
marketing mixes

Strategy
Two
Exhibit 3-7
For use only with Perreault and McCarthy texts.
3-11 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Market-Oriented Approaches
A combiner

The Using combined

Strategy target market
approach—can aim
at two or more
submarkets with the
same marketing mix

Exhibit 3-7
For use only with Perreault and McCarthy texts.
3-12 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Segmentation Dimensions

Focus:
All Potential Dimensions
Relevant Purchase Behavior

Focus:
Qualifying Dimensions
Relevant Customer Type

Determining Dimensions Focus:

(Product Type) Specific Purchase Influence

Determining Dimensions Focus :

(Brand Specific) Attraction to Brand

Exhibit 3-12
For use only with Perreault and McCarthy texts.
3-13 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Positioning of Different Bar Soaps
High
moisturizing
• Tone • Zest
7
4 • Lever 2000
• Dove
2
5
• Safeguard
• Lux 8
Nondeodorant 3 Deodorant

1
• Lava • Dial
“Product Space” • Lifebuoy
Representing Consumers’ Perception for 6
Different Brands of Bar Soap
Exhibit 3-13 Low
moisturizing For use only with Perreault and McCarthy texts.
3-14 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Key Terms

Breakthrough Opportunities Segmenting

Competitive Advantage Market Segment
Differentiation Single Target Approach
S.W.O.T. Analysis Multiple Target Approach
Market Penetration Combined Target Approach
Market Development Combiners
Product Development Segmenters
Diversification Qualifying Dimensions
Market Determining Dimensions
Generic Market Clustering Techniques
Product-Market Positioning
Market Segmentation

For use only with Perreault and McCarthy texts.

3-15 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill