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Chapter 3:

Focusing
Marketing Strategy with
Segmentation and
Positioning

For use only with Perreault and McCarthy texts.


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Marketing Strategy Planning Process


Narrowing down to focused strategy with screening criteria
Customers

Company

S.
W.
O.
T.

Segmentation
& Targeting

Product

Place

Target
Market
Differentiation
& Positioning

Price

Promo

Competitors

External Market Environment


Exhibit 3-1
3-3

For use only with Perreault and McCarthy texts.


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Finding Opportunities
Opportunity - when the right circumstances
occur at the right time.
Conduct a S.W.O.T. analysis.
Differentiate to gain a competitive advantage
and seize an opportunity.
Differentiation - means that the marketing mix is

distinct from and better than what is available form a


competitor.
Competitive advantage - firm has a marketing mix
that the target market sees as better than a
competitors mix.
For use only with Perreault and McCarthy texts.
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Types of Opportunities
Four Basic Types of Opportunities
Present Products

New Products

Present Markets

Market
Penetration

Product
Development

New Markets

Market
Development

Diversification

Exhibit 3-2
3-4

For use only with Perreault and McCarthy texts.


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Irwin/McGraw-Hill

ler
al
Sm
r
Ea
ly
St
t
ar

3-5

ive
ti t e
pe g
m n ta
Co va
Ad

W
or
ld

Considering International Opportunities

n
e
r
T
r
e
t
t
Be

?
s
d

For use only with Perreault and McCarthy texts.


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Narrowing Target Markets


Selecting
target
marketing
approach

Narrowing down to
specific product-market
All
customer
needs

Some
generic
needs

One
broad
product
market

Segmenting
into possible
target markets
Homogeneous
(narrow)
product
markets

Single
target
market
approach
Multiple
target
market
approach
Combined
target
market
approach

Exhibit 3-3
3-6

For use only with Perreault and McCarthy texts.


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Understanding Markets
Generic market - a market with broadly similar needs
and sellers offering various ways to satisfy those
needs. Examples include:
housing
transportation
entertainment
Product market - market with very similar needs and
sellers offering close substitute ways of satisfying
those needs. Examples include:
apartments, condos, duplexes, houses
autos, planes, trains, boats
bowling, theater, sports, miniature golf, etc.
For use only with Perreault and McCarthy texts.
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Market Segmentation
Market segmentation involves naming broad
product-markets and segmenting these broad
product-markets in order to select target
markets and develop suitable marketing mixes.
This process involves clustering people with

similar needs into a market segment.


A market

segment is a relatively homogeneous group of


people who will respond to a marketing mix in a similar
way.

For use only with Perreault and McCarthy texts.


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Market Segmentation
Broad product-market (or generic market) name goes here
(The bicycle-riders product-market)
Submarket 1
(Exercisers)

Submarket 2
(Off-road
adventurers)

Submarket 3
(Transportation riders)

Submarket 4
(Socializers)

Submarket 5
(Environmentalists)

Exhibit 3-5
3-8

For use only with Perreault and McCarthy texts.


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Market Segmentation
B. Product-market showing
six segments
Status dimension

Status dimension

A. Product-market showing
three segments

Dependability dimension

Dependability dimension

Exhibit 3-6
3-9

For use only with Perreault and McCarthy texts.


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Irwin/McGraw-Hill

Segmenting a Broad Product-Market


Good market segments meet the
following criteria:
Homogeneous (similar) within
Heterogeneous (different) between
Substantial
Operational

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Market-Oriented Approaches
A segmenter
The
Strategy

Using single target


market approach
can aim at one
submarket with one
marketing mix

Exhibit 3-7
3-10

For use only with Perreault and McCarthy texts.


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Market-Oriented Approaches
A segmenter
Strategy
One
Strategy
Three

Using multiple target


market approach
can aim at two or
more submarkets
with different
marketing mixes

Strategy
Two
Exhibit 3-7
3-11

For use only with Perreault and McCarthy texts.


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Market-Oriented Approaches
A combiner

The
Strategy

Using combined
target market
approachcan aim
at two or more
submarkets with the
same marketing mix

Exhibit 3-7
3-12

For use only with Perreault and McCarthy texts.


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Segmenting Dimensions
Behavioral - examples include:
benefits sought
brand familiarity
kind of shopping
type of problem solving
rate of use

Geographic
region of world, country, region in country
size of city

Demographic - examples include:


income
gender
age
family size

For use only with Perreault and McCarthy texts.


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Positioning
Positioning refers to how customers think
about proposed and or present brands in a
market.
Use the marketing mix to position products in

the market.

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Positioning of Different Bar Soaps


High
moisturizing
Tone
4

Zest

Lever 2000

Dove

Safeguard
Lux

Nondeodorant

Deodorant

Product Space

Lava

Representing Consumers Perception for


6
Different Brands of Bar Soap
Low
Exhibit 3-13
moisturizing
3-14

Dial
Lifebuoy

For use only with Perreault and McCarthy texts.


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Benefits of Perceptual Mapping


Using perceptual mapping to position a product might
cause a marketing manager to:
introduce a new product for a segment with
unsatisfied needs.
change a products promotion to make its image fit
more closely with the needs and attitudes of the target
market.
shift attention to another market segment where
competition is weaker.
physically change the product to compete more
effectively with a competitor aiming at the same
target market.
For use only with Perreault and McCarthy texts.
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