Prof. Richardson MKTG 116 Slide 1

Chapter 4
Prof. Richardson
MKTG 116
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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 recreated by the market
Prof. Richardson MKTG 116 slide 2
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
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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 firms 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
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Chapter 4
To make sure you have the best Market Matching Strategy - you have to take the following factors into consideration
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Chapter 4
Market Matching Strategy?

1. Company Resources
2. Differentiability 3. Stage in Product Life Cycle 4. Competitors Strategies 5. Size of Segment
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Chapter 4
Single-Offer Strategy
The attempt to satisfy a large or a small market with one product and a single marketing program.
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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
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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.
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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.
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Chapter 4
Multi-Offer Strategy
Levis - in the beginning - a singleoffer 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.
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Chapter 4
Figure 4.1 Market Segmentation Decision Process
Prof. Richardson
MKTG 116
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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.
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Chapter 4
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 Page 64 of the customer
Chapter 4
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.
Chapter 4
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 doesnt compete directly)
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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
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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
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Chapter 4
Figure 4.3 Market for Airline Passenger Travel
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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
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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.
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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. Wendys square hamburgers eg. Taco Bell
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Chapter 4
Applying The Concepts
Page 70 - 71
Prof. Richardson
MKTG 116
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Chapter 4
Figure 4.6 Positioning Map of Cola Market
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MKTG 116
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Prof. Richardson MKTG 116 Slide 1

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Chapter 4

Market Matching Strategy?

Figure 4.1 Market Segmentation Decision Process

Market Segmentation Decision Process - STAGES

Stage I: Identify Market Segmentation Bases

Market Segmentation Decision Process - STAGES

Stage II Develop Relevant Profiles for each Segment

Once the segments have been identified -

Market Segmentation Decision Process - STAGES

Stage III Forecast Market Potentials

Market Segmentation Decision Process - STAGES

Stage I V Forecast Probably Market Share

Market Segmentation Decision Process - STAGES

Stage V Select Specific Market Segments

Figure 4.2 The Divide-the-Box Procedure

Figure 4.3 Market for Airline Passenger Travel

Figure 4.3 Market for Airline Passenger Travel

Using Target Market Decision Analysis in Assessing a Product Mix

Using Target Market Decision Analysis in Assessing a Product Mix

Applying The Concepts

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