Prof. Richardson MKTG 116 Slide 1

Chapter 4
Prof. Richardson MKTG 116 slide 1

Chapter 4
Vinyl Records
• Wax is back ! !
• Some bands release on wax first
• DJs use wax in clubs to spin a unique sound
• bands want their music played in the clubs
so people will buy the CDs
• example of a market segment being re-
created by the “market”

Chapter 4
• Chpt 3 discussed ROLE of mkt

segmentation in developing a marketing
strategy, and explained what are the bases
• In Chpt 4 we look at the PROCESS of

market segmentation
• We will look at the reasons for, and process
of matching product offerings to specific
mkt segments
Page 59

Chapter 4
• Mkt segmentation can take many forms
• you can have one whole market
• you can have many small segments with a
different marketing plan for each segment
THE CORE of the firm’s strategy is to

make sure the products they want to sell
(the product offerings) is what the people
want to buy, in each market segment
Page 59

Chapter 4
• To make sure you have the best

Market Matching Strategy - you have
to take the following factors into
consideration
Page 59

Chapter 4
Market Matching Strategy?
1. Company Resources
2. Differentiability
3. Stage in Product Life Cycle
4. Competitors Strategies
5. Size of Segment
Page 59

Chapter 4
Single-Offer Strategy
The attempt to satisfy a large or a

small market with one product and a
single marketing program.
Page 60

Chapter 4
Usually this strategy is done by a

company that does not have the
money to be able to support the
production and sales of many different
types of products.
Eg. VW “bug”
Page 60

Chapter 4
Danger -
It is very easy for a competitor
company to copy your single product,
and sell it at a lower price, and take
away all your customers.
Page 61

Chapter 4
Multi-Offer Strategy
Sometimes called “Differentiated Marketing”
The attempt to satisfy several

segments of the market very well
with specialized products and
unique marketing programs aimed
at each segment.
Page 60

Chapter 4
Multi-Offer Strategy
Levis - in the beginning - a single-

offer strategy. As jeans became
more popular, different styles
shapes and also different types of
clothing, (shirts, jackets etc.)
jeans - slim, bootcut, hiphugger,
bells, flare, painter pants etc.
Page 60

Chapter 4 Figure 4.1 Market Segmentation Decision Process

Chapter 4 Market Segmentation Decision Process - STAGES
Stage I: Identify Market Segmentation Bases
The process starts when a company looks at the

potential customers and identifies those
customers as having particular characteristics -
these characteristics will allow the marketing
company to classify them into market segments.
The segments should be selected so that you

can group together customers who have similar
needs.
Page 63

Stage II Develop Relevant Profiles for each Segment
Once the segments have been identified -

should develop a profile of the relevant customer
needs and behaviors in each segment.
What does your customer look like (profile) !!
What do they like !!
What do they do !!
- you need this description to be very precise in
order to make your marketing “match” the needs
of the customer Page 64
Stage III Forecast Market Potentials
You create a “Forecast” of the market potential within

each segment.
This is the “go, no-go” stage. When you are at this

stage you gather the information on sales potential to
determine whether you can go further ahead and
justify further analysis.
Page 64
Forecast - “what if” - an expectation of future action.

Stage I V Forecast Probably Market Share
Once the market potential has been estimated,

you have to determine how much of that market
you can obtain (what “market share” can you
capture.
Then you develop specific marketing strategy for

the segments you are trying to develop.
(text eg. P&G outselling Colgate, therefore Colgate strategy
changes so it doesn’t compete directly)
Page 64
Stage V Select Specific Market Segments
Finally, you take all this information, and identify

specific target markets.
ie. University students who have part-time jobs, and

do not have credit cards
Page 64
Chapter 4
Target Market Decision Analysis
• The purpose of doing this is to allow

management (the bosses) to effectively
employ marketing efforts
• “clearly delineated target markets”

=
• specifically identified groups of potential
customers
Page 67

Chapter 4
Figure 4.2 The Divide-the-Box Procedure
Page 67
Chapter 4 Figure 4.3 Market for Airline Passenger Travel
Page 68
Chapter 4 Figure 4.3 Market for Airline Passenger Travel
A “tool” (method) for outlining the scope (size and

range) of the market.
Allows you to look at all possible market segments -
AND then pick which ones you want to focus on.
Once you make this grid, you can then evaluate the
aspects (wants, needs and motivations) of each market
segment.
Page 68
Chapter 4
Using Target Market Decision
Analysis in Assessing a Product Mix
Product Mix
• the assortment of product lines available
• “target market decision analysis” can be

used to determine the product mix being
offered
Page 68
Chapter 4
Using Target Market Decision
Analysis in Assessing a Product Mix
Example - shoes
3 types of cross trainers
4 types of basketball shoes
2 types of jogging shoes
3 types of soccer cleats
etc.
Page 68
Chapter 4
Product Positioning
• Developing a marketing program in

such a way that the product is perceived
to be very different from competitors
products
eg. Wendy’s square hamburgers

eg. Taco Bell
Page 70

Chapter 4
Applying The Concepts
Page 70 - 71

Chapter 4
Figure 4.6 Positioning Map of Cola Market

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Chapter 4

Prof. Richardson MKTG 116 slide 1

Prof. Richardson MKTG 116 slide 2

• Chpt 3 discussed ROLE of mkt

• In Chpt 4 we look at the PROCESS of

Prof. Richardson MKTG 116 slide 3

THE CORE of the firm’s strategy is to

Prof. Richardson MKTG 116 slide 4

• To make sure you have the best

Prof. Richardson MKTG 116 slide 5

Prof. Richardson MKTG 116 slide 6

The attempt to satisfy a large or a

Prof. Richardson MKTG 116 slide 7

Usually this strategy is done by a

Prof. Richardson MKTG 116 slide 8

Prof. Richardson MKTG 116 slide 9

The attempt to satisfy several

Prof. Richardson MKTG 116 slide 10

Levis - in the beginning - a single-

Prof. Richardson MKTG 116 slide 11

Prof. Richardson MKTG 116 slide 12

Stage I: Identify Market Segmentation Bases

The process starts when a company looks at the

The segments should be selected so that you

Prof. Richardson MKTG 116 slide 13

Stage II Develop Relevant Profiles for each Segment

Once the segments have been identified -

Stage III Forecast Market Potentials

You create a “Forecast” of the market potential within

This is the “go, no-go” stage. When you are at this

Forecast - “what if” - an expectation of future action.

Stage I V Forecast Probably Market Share

Once the market potential has been estimated,

Then you develop specific marketing strategy for

Stage V Select Specific Market Segments

Finally, you take all this information, and identify

ie. University students who have part-time jobs, and

• The purpose of doing this is to allow

• “clearly delineated target markets”

Prof. Richardson MKTG 116 slide 18

A “tool” (method) for outlining the scope (size and

• “target market decision analysis” can be

• Developing a marketing program in

eg. Wendy’s square hamburgers

Prof. Richardson MKTG 116 slide 24

Applying The Concepts

Prof. Richardson MKTG 116 slide 25

Figure 4.6 Positioning Map of Cola Market

Prof. Richardson MKTG 116 slide 26

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