Focusing Marketing Strategy

with Segmentation and

Positioning
At the end of this presentation, you should be
able to:

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.
7.
Focusing Marketing Strategy with
Segmentation and Positioning (Exhibit 4-1)
Focusing Marketing Strategy with
Segmentation and Positioning
Segmentation
•Defining markets
•Dimensions to use
•Identifying segments
•Identifying segments to target
•Segmentation approaches
Positioning
•Understanding customer’s view
•Positioning techniques
•Evaluating segment
preferences
•Differentiating the marketing
mix
•Relationship between
positioning & targeting
Taking
Advantage of
Opportunities
Naming Product Markets and Generic Markets

Product
Product Customer
Customer Needs
Needs
Type
Type

Product-
Product-
Market
Market
Definition
Definition

Geographic
Geographic Area
Area Customer
Customer Type
Type

No Product Type in Generic Market Definition

What Is the Product-Market?
 Segmentation is a Two-Step Process

Naming
Naming broad
broad product-markets
product-markets

and

2.
2. Segmenting
Segmenting markets
markets and
and selectin
selectin
The Process of Narrowing Down to Target
Markets
All customer needs
Narrowing
down to
specific
product-market

Segmenting
Homogeneous (narrow) product-markets into possible
target markets
Selecting target
Single targetMultiple
market target
Combined
markets target markets marketing
approach
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)
How Far Should the Aggregating Go?

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

Dependability dimension
 Segmenters and Combiners Aim at Specific
Target Markets

A segmenter Single target

market approach
develops a The Strategy
different
marketing
mix for each
segment. Multiple target Strategy two
market approach
Strategy one Strategy three

A combiner aims at two or The

more submarkets with the strategy
same marketing mix.
 Segmenting vs. Combining

Too Much Combining Is Risky

ers Try to Satisfy “Pretty Well” Segmenters Try to Satisfy “Very

Key
Key
Issues
Issues
fit Is the Balancing Point Segmenting May Produce Bigger

Segment or Combine?
 Behavioral dimensions for segmenting
consumer markets

Needs
Needs
Information
Information required
required Benefits
Benefits Sought
Sought

Behavior
Behavior
ype
ype of
of problem-solving
problem-solving al
al Thoughts
Thoughts
Segmenti
Segmenti
ng
ng
Dimensio
Dimensio
Kind
Kind of
of shopping
shopping ns
ns Rate
Rate of
of use
use

Brand
Brand familiarity
familiarityPurchase
Purchase relationship
relationship
Ball Park franks
appeal to this
segment with
older, attractive
models and
products
addressing
concerns about
health and fat.
Haagen
Dazs
projects an
elegant,
indulgent,
and special
personality
in this ad.
 Geographic dimensions for segmenting
consumer markets

Region
Region of
of world
world or
or country
country Region
Region in
in aa country
country
Geographi
Geographi
cc
Segmentati
Segmentati
on
on
Dimension
Dimension
ss

Size
Size of
of city
city
 Demographic dimensions for segmenting
consumer markets

Income
Income

Gender
Gender or
or age
age

ographic
ographic Segmentation
Segmentation Dimensions
Dimensions
Family
Family size
size or
or family
family life
life cycle
cycle stag
stag

Occupation
Occupation or
or education
education

Ethnicity
Ethnicity or
or social
social class
class
Income
Soft &
Beautiful, a
hair care
products
company,
recognizes
the many
roles of
women in its
ads.
Tyson
chicken
developed
“Tyson Time-
Trimmers,”
pre-cut,
frozen
chicken
strips, to
appeal to
busy women
and mothers.
Computer
manufacturers
have created
computers to
appeal to girls
and boys.
Crayola
introduced
a new
crayon
which is
washable
and can be
removed
from a
variety of
surfaces.
 Segmenting business markets

Kind
Kind of
of relationship
relationship Type
Typeof
of customer
customer

Segmenting
Segmenting
Purchasing
Dimensions
Dimensions for
methods for Business
Business Markets
Markets
Demographics
Demographics
Purchasing methods

Type
Typeof
of buying
buying situation
How
How customers
situation customers will
will use
usethe
theproduct
produc
Business-to-
Business
Segmentation
What Dimensions are used to Segment
Markets?

Qualifying
Qualifying Determining
Determining
Dimensions
Dimensions Dimensions
Dimensions
•Relevant to •Affect the
including a customer’s
customer type in a purchase of a
product-market OR product or brand
•Can be further
•Help identify “core segmented
benefits”
 Determining vs. Qualifying Dimensions

ng
ng Dimensions
Dimensions May
May Be
Be Very SpecificDetermining
Very Specific Determining Dimensions
Dimensions May
May Ch
C

Key
Key Issues
Issues

imensions For
Dimensions For Different
Different Submarkets
Submarkets
Qualifying
Qualifying Dimensions
Dimensions Are
Are Import
Import
Ethical Issues in Segmenting Markets

Ethical
Ethical Internati
Internati
Exploitation
Exploitation onal
onal
Issues
Issues
Issues
Issues

Creates
Creates Unnecessary
Unnecessary Wants
Wants

Does
Does Harm
Harm
What Are the
Relevant
Segmenting
Dimensions?
Psychographic Segmentation
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Segmenting Product Markets
More Sophisticated Techniques May Help in
Segmenting

Clustering
Clustering

Customer
Customer Database
Database

Customer
Customer Relationship
Relationship Management
Management (CRM
(CRM
Cluster
Analysis
 Positioning

Sticks
Sticks like
like
quattro.
quattro.
“Product Space” Representation 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
Positioning and Advertising
You should now be able to:

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.
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
•