Segmentataion In Marketing

Target Marketing Opportunity Analysis:Segmentation and Positioning

To Accompany Basic Marketing, 14th Editionby William D. Perreault, Jr. and E. Jerome McCarthy

Your host:

David J. UrbanProfessor of Marketing

VirginiaCommonwealthUniversity

CustomersNeeds and other

SegmentingDimensions

CompanyMission, Objectives,

& Resources

CompetitorsCurrent &

Prospective

S.W.O.T.

Targeting &Segmentation

Positioning &Differentiation

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Marketing Strategy Planning Process

External Market EnvironmentExternal Market EnvironmentTechnology Political & Legal Social & Cultural Economic

The External Environment Affects Marketing Opportunities

Dimensions of the External

Environment

Economic

The External Environment Affects Marketing Opportunities

Dimensions of the External

Environment

Economic

Technology

The External Environment Affects Marketing Opportunities

The External Environment Affects Marketing Opportunities

Dimensions of the External

Environment

Economic

TechnologyPolitical and Legal

The External Environment Affects Marketing Opportunities

The External Environment Affects Marketing Opportunities

Dimensions of the External

Environment

EconomicCultural and social

TechnologyPolitical and Legal

Cultural/Social Influences

Considering International Opportunities

Smaller

World

Considering International Opportunities

Better

Trends/

Early S

tart

Smaller

World Com

petitive

Advantage

Considering International Opportunities

Better

Trends/

Early S

tart

Smaller

World Com

petitive

Advantage

Analysis

Needed

International Opportunities

Four Basic Types of Opportunities

MarketPenetration

Present Products

New Products

Present Customers

New Customers

Note: hybrid combinations are common

MarketPenetration

Present Products

New Products

Present Customers

New Customers

•Note: hybrid combinations are common

MarketDevelopment

Four Basic Types of Opportunities

MarketPenetration

Present Products

New Products

Present Customers

New Customers

•Note: hybrid combinations are common

MarketDevelopment

ProductDevelopment

Four Basic Types of Opportunities

MarketPenetration

Present Products

New Products

Present Customers

New Customers

•Note: hybrid combinations are common

MarketDevelopment

ProductDevelopment

Diversification

Four Basic Types of Opportunities

Distinguishing Opportunities

BreakthroughOpportunity

Distinguishing Opportunities

BreakthroughOpportunity

CompetitiveAdvantage

vs.

Broad generic market

Narrowing down to Focus on a Target Market

Target Segment(s)

Broad product market

Specific market segment(s)

Examples of Generic Markets, Relevant Customer Needs, and Specific Product-Markets

Generic markets… and potential needs

Relevant product-types for some broad product-

markets

Some specificbrands within

narrowersubmarkets

Cameras, computer scanners or printers, duplicating machines, magnetic resonance imaging

Firms worldwide that want to capture images… Accuracy, convenience, flexibility, self-expression, speed, artistic capabilities

Cameras: Nikon 35mm, Sony, Mavica, Polaroid Instant, RCA video, Kodak 70mm movie cameras

Individualized Marketing

Segmentation Dimensions for Consumer Markets

Needs & otherbehavioral

Segmentation Dimensions for Consumer Markets

Needs & otherbehavioral

Geographic

Demographic

Demographic Segmentation and Promotion

Segmentation Dimensions for Business/Organizational Markets

Kind ofRelationship

Buying Situation

Type ofCustomer

Demographics

PurchasingMethod

Product Use

PossibleSegmentationDimensions

HomogeneousWithin

Evaluating Market Segments

Criteria forGood

Segments

HeterogeneousBetween

Evaluating Market Segments

Criteria forGood

Segments

HomogeneousWithin

Substantial

Evaluating Market Segments

Criteria forGood

Segments

HomogeneousWithin

HeterogeneousBetween

Operational

Evaluating Market Segments

Criteria forGood

Segments

HomogeneousWithin

HeterogeneousBetween

Substantial

Developing Market-Oriented Strategies in Broad Product-Markets

Combined Target Market Approach

Multiple Target Market Approach

Single Target Market Approach

This approach segments the marketand picks one of the homogeneoussegments as the firm's target market.

The segmenter here aims at onesubmarket with one marketing mix.

TheStrategy

Developing Market-Oriented Strategies in Broad Product-Markets

Combined Target Market Approach

Multiple Target Market Approach

Single Target Market Approach

This approach segments the marketand chooses two or moresegments as the firm's target market.

The segmenter here aims at two or more submarkets with a different marketing mix for each.

Strategy1

Strategy 2

Strategy3

Developing Market-Oriented Strategies in Broad Product-Markets

Combined Target Market Approach

Multiple Target Market Approach

Single Target Market Approach

This approach combines two or More submarkets into a larger target market as a basis for one strategy.

The combiner here aims at twosubmarkets with one marketing mix.

TheStrategy

Segmenting Product Markets

ProcessforSegmentingProduct-Markets

Name Broad Product-Market

List Customer Needs

Name Broad Product-Market

List Customer Needs

ProcessforSegmentingProduct-Markets

Narrow Product-Markets

IdentifyDetermining Dimensions

Segmenting Product Markets

Name Broad Product-Market

List Customer Needs

Narrow Product-Markets

IdentifyDetermining Dimensions

ProcessforSegmentingProduct-Markets

Name PossibleMarket segments

Evaluate Segments

Segmenting Product Markets

Name Broad Product-Market

List Customer Needs

Narrow Product-Markets

IdentifyDetermining Dimensions

Name PossibleMarket segments

Evaluate Segments

ProcessforSegmentingProduct-Markets

Estimate Size

Segmenting Product Markets

The Competitive Environment

Key areas toconsider

Competitoranalysis

Key areas toconsider

Competitoranalysis

Competitiverivals

The Competitive Environment

Key areas toconsider

Competitoranalysis

Competitiverivals

Competitivebarriers

The Competitive Environment

Product Space Positioning for Bar Soaps

High moisturizing

Low moisturizing

Nondeodorant Deodorant

High moisturizing

Low moisturizing

Nondeodorant Deodorant

Safeguard

Lever 2000

Zest

CoastLux

Dove

Tone

LavaLifebuoy

Dial

Product Space Positioning for Bar Soaps

High moisturizing

Low moisturizing

Nondeodorant Deodorant

1

2

3

4

5

7

6

8

Safeguard

Lever 2000

Zest

CoastLux

Dove

Tone

LavaLifebuoy

Dial

Product Space Positioning for Bar Soaps

Evaluating OpportunitiesB

usin

ess

Stre

ngth

Industry AttractivenessH

igh

Med

ium

Low

High Medium Low

Evaluating OpportunitiesB

usin

ess

Stre

ngth

Industry AttractivenessH

igh

Med

ium

Low

High Medium Low

No Growth

Borderline

Growth

CompanyMission, Objectives,

& Resources

CompetitorsCurrent &

Prospective

S.W.O.T.

Targeting &Segmentation

Positioning &Differentiation

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Marketing Strategy Planning Process

External Market EnvironmentExternal Market EnvironmentTechnology Political & Legal Social & Cultural Economic

CustomersNeeds and other

SegmentingDimensions