Chapter Three
FOCUSING MARKETING STRATEGY WITH SEGMENTING AND POSITIONING
EARCH FOR OPPORTUNITIES CAN BEGIN BY UNDERSTANDING MARKETS
Market is group of buyers with similar needs who are willing to exchange something of value Two types of markets: Generic -- broadly similar needs/diverse substitutes; Product Market -- very similar needs/close substitutes
NAMING PRODUCT MARKETS AND GENERIC MARKETS
Product definition is four part:
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What (description, type of good) |
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To meet what (user’s basic and emotional needs) |
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For Whom (customer types) |
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Where (geographic area) |
MARKET SEGMENTATION INCLUDES TARGET MARKETS
Two step process:
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Name broad target markets |
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Segment, then develop marketing mix (4 P’s) |
See Exhibits 3-1 and 3-2, page 65 and page 66
Segmented market is a homogenous group of customers who will respond to a mix in a similar way.
Criteria for segmenting broad product market
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Homogenous (within) |
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Heterogeneous (between) |
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Substantial (segments should be large enough to be profitable) |
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Operational (segmenting dimensions should be useful for identifying target markets) |
Three ways to develop market oriented strategies (Exhibit 3-5)
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Single target market |
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Multiple target market |
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Combination of the above |
Note: Segmenters see many demand curves (Exhibit 3-8). Also, profit is
balancing point when considering how much to segment.
WHAT DIMENSIONS ARE USED TO SEGMENT MARKETS?
Possible segmenting dimensions:
Consumer markets, Exhibit 3-8, page 72
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Behavioral |
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Geographic |
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Demographic |
Business markets, Exhibit 3-9, page 73
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Kind of relationship |
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Type of customer |
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Demographics |
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How product is used |
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Type of buying situation |
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Purchasing method |
Finding Relevant Segmenting Dimensions (Exhibit 3-10)
1) All potential dimensions
2) Qualifying dimensions
3) Determining dimensions -- Product type
4) Determining dimensions -- Brand specific
MORE SOPHISTICATED TECHNIQUES
Can use clustering techniques combined with customer data bases to find similar patterns within sets of data
See Exhibit 3-12, page 83
