The Marketing Process

Chapter Two & Seven

 The Marketing Process

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

Product

Suppliers Target Publics

Place Consumers Price

Promotion

Political- Social-
Legal Competitors Cultural
Environment Environment
How do Companies
identify their Target
Consumer?
S-T-P
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles

Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments

Market positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment
•  Market Segmentation: determining distinct
groups of buyers (segments) with different
needs, characteristics, or behavior.

Companies divide large,

heterogeneous markets
into smaller segments that
can be reached more
efficiently and effectively
with products and services
that match their unique
needs.
How can you segment the
market?

Sheet
Geographic Segmentation

World Region or Country

City or Metro Size

Density or Climate
Demographic Segmentation
•  Dividing the market into groups
based on variables such as:
–  Age
–  Gender
–  Family size or life cycle
–  Income
–  Occupation
–  Education
–  Religion
–  Race
–  Generation
–  Nationality
Psychographic Segmentation

Divides Buyers Into Different Groups Based on:

 Behavioral Segmentation

•  Dividing the market into

groups based on variables
such as:
–  Occasions
–  Benefits
–  User status
–  Usage rate
–  Loyalty status
–  Readiness stage
–  Attitude toward product
 Step 1. Market Segmentation
Requirements for Effective Segmentation

Measurable •  Size, purchasing power, profiles

 of segments can be measured.

Accessible •  Segments can be effectively

 reached and served.

Substantial •  Segments are large or profitable

enough to serve.
•  Segments must respond
Differential differently to different marketing
mix elements & programs.

•  Effective programs can be

Actionable designed to attract and serve
the segments.
 How Do you think the
following organizations
segment the market?
1.  Pepsi Co.
2.  Lipton
3.  Hyundai
4.  Bibliotheca Alexandrina
5.  Renaissance Movie Theater
 Discussion Connections

•  Can you identify specific companies, other

than the examples already discussed, that
practice each level of segmentation?
•  Using the segmentation bases, segment
the footwear market.
•  Describe each of the major segments and sub
segments.
 Market Targeting
Evaluating each segment’s attractiveness
and selecting one or more segments to
enter.

Target Market – a set of buyers sharing common needs

or characteristics that the company decides to serve
 Evaluating Market Segments
•  Segment Size and Growth
–  Analyze current sales, growth rates and expected
profitability for various segments.
•  Segment Structural Attractiveness
–  Consider effects of: competitors, availability of
substitute products and, the power of buyers &
suppliers.
•  Company Objectives and Resources
–  Company skills & resources needed to succeed in
that segment(s).
–  Look for Competitive Advantages.
 Discussion Connection

•  At the last Discussion Connection, you segmented

the U.S. footwear market.
–  Now, pick two companies that serve this market and
describe their segmentation and targeting strategies.
–  Can you come up with one that targets many different
segments versus another that focuses on only one or a
few segments?
•  How does each company you choose differentiate
its marketing offer and image?
•  How has each done a good job of establishing this
differentiation in the minds of targeted consumers?
 Market Positioning
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
EXAMPLE: Chevy Blazer is “like a rock.”
Choosing a Positioning Strategy
Step 1. Identifying
Possible Competitive
Advantages
Step 2. Selecting the
Right Competitive
Advantage
Step 3. Communicating
and Delivering the
Chosen Position
Identifying Possible Competitive
Advantages
•  Key to winning and keeping customers is to
understand their needs and buying
processes better than competitors do and
deliver more value.
•  Competitive advantage is an advantage
over competitors gained by offering
consumers greater value, either through
lower prices or by providing more benefits,
that justify competitive advantage,
Communicating and Delivering
the Chosen Position
•  Once position is chosen, company must
take strong steps to deliver and
communicate the desired position to target
consumers.
•  All the company’s marketing mix must
support the positioning strategy.
•  Positioning strategy must be monitored and
adapted over time to match changes in
consumer needs and competitor’s
strategies.