Chapter 3: Focusing Marketing Strategy with Segmentation andPositioning

When you finish this chapter, you should

3-2

Chapter 3 Objectives

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.

5. Know what marketing segmentation is and how to segment product-markets into submarkets.6. Know three approaches to market-oriented strategyplanning.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.

Exhibit 3-13-3

Marketing Strategy Planning Process

Customers

Company

Competitors

S.W.O.T.

Segmentation& Targeting

Differentiation& Positioning

Product Place

PromoPrice

Narrowing down to focused strategy with screening criteria

External Market Environment

TargetMarket

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification

Present Products New Products

Four Basic Types of Opportunities

Present Markets

New Markets

Exhibit 3-2

3-4

Types of Opportunities

Better

Tre

nds?

Smal

ler W

orld C

ompetitive

Advantage

Early Start

3-5

Considering International Opportunities

Exhibit 3-3

Combined target market

approach

Single target market

approach

Multiple target market

approach

Allcustomer

needs

Somegenericneeds

Onebroad

productmarket

Homogeneous(narrow) product markets

Narrowing down tospecific product-market

Segmentinginto possible

target markets

Selectingtarget

marketingapproach

3-6

Narrowing Target Markets

Exhibit 3-4

3-7

Generic and Product-Market Definitions

GenericMarket

Definitions

GenericMarket

Definitions

Product-Market

Definitions

Product-Market

Definitions

Customer(user) needs

Customer(user) needs

Customertypes

Customertypes

Geographicarea

Geographicarea

Product type(good and/or service)

Product type(good and/or service)+ + +

Submarket 1(Exercisers)

Submarket 2(Off-road

adventurers)

Submarket 3(Transportation riders)

Submarket 4(Socializers)

Submarket 5(Environmentalists)

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

Exhibit 3-5

3-8

Market Segmentation

Market Segmentation

Exhibit 3-6

3-9

Sta

tus

dim

ensi

on

Dependability dimension

A. Product-market showingthree segments

Sta

tus

dim

ensi

on

Dependability dimension

B. Product-market showingsix segments

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

TheStrategy

A segmenter

Exhibit 3-7

3-10

Market-Oriented Approaches

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

StrategyThree

StrategyTwo

StrategyOne

A segmenterMarket-Oriented Approaches

Exhibit 3-7

3-11

TheStrategy

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

A combiner

Exhibit 3-7

3-12

Market-Oriented Approaches

All Potential DimensionsAll Potential Dimensions

Qualifying DimensionsQualifying Dimensions

Determining Dimensions(Product Type)

Determining Dimensions(Product Type)

Determining Dimensions(Brand Specific)

Determining Dimensions(Brand Specific)

Relevant Purchase Behavior

Relevant Customer Type

Specific Purchase Influence

Attraction to Brand

Focus:

Focus:

Focus:

Focus :

Exhibit 3-12

3-13

Segmentation Dimensions

“Product Space” Representing Consumers’ Perception for Different Brands of Bar Soap

Nondeodorant Deodorant

High moisturizing

Low moisturizing

1

24

5

7

8

6

3

• Zest

• Lever 2000

• Safeguard

• Dial• Lifebuoy

• Lava

• Lux

• Dove

• Tone

Positioning of Different Bar Soaps

Exhibit 3-13

3-14

SegmentingMarket SegmentSingle Target ApproachMultiple Target ApproachCombined Target Approach Combiners SegmentersQualifying DimensionsDetermining DimensionsClustering TechniquesPositioning

Breakthrough OpportunitiesCompetitive AdvantageDifferentiationS.W.O.T. AnalysisMarket PenetrationMarket DevelopmentProduct DevelopmentDiversificationMarketGeneric MarketProduct-MarketMarket Segmentation

Key Terms

3-15