Lecture Basic Marketing: A global-managerial approach: Chapter 3 - William D. Perreault, E. Jerome McCarthy

Chapter 3:
  

Focusing
Marketing Strategy with
Segmentation and
Positioning

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Chapter 3 Objectives
When you finish this chapter, you should
1.  Understand why marketing 
strategy planning involves a 
process of narrowing down 
from broad opportunities to a 
specific target market and 
marketing mix. 
2.  Know about the different 
kinds of marketing 
opportunities.
3.  Understand why opportunities 
in international markets 
should be considered.
4.  Know about defining generic 
markets and product­markets.
3­2

5.  Know what marketing 
segmentation is and how to 
segment product­markets 
into submarkets.
6.  Know three approaches 
to market­oriented strategy
planning.
7.  Know dimensions that 
may be useful for 
segmenting markets.
 8.  Know what positioning 
is— and why it is useful.
10. Understand the 
important new terms.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


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 3­1
3­3

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Types of Opportunities
Four Basic Types of Opportunities
Present Products

Present Markets

New Markets

New Products

Market
Penetration

Product
Development

Market
Development

Diversification

Exhibit 3­2
3­4

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


 W
ler
Sm
al

Ea
rl
y 
St
ar
t
3­5

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

or
ld

Considering International Opportunities

n
e
r
 T
r
te
t
Be

?
s
d

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


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 3­3
3­6

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Generic and Product-Market Definitions

Generic
Market
Definitions

Customer
(user) needs

Exhibit 3­4
3­7

+

Customer
types

+

Geographic
area

+

Product type
(good and/or service)

ProductMarket
Definitions
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

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 3­5
3­8

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Market Segmentation

B. Product-market showing
six segments
Status dimension

Status dimension

A. Product-market showing
three segments

Dependability dimension

Dependability dimension

Exhibit 3­6
3­9

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Market-Oriented Approaches
A segmenter
The
Strategy

Using single target 
market approach— 
can aim at one 
submarket with one 

marketing mix

Exhibit 3­7
3­10

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


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 3­7
3­11

For use only with Perreault and McCarthy texts.

© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Market-Oriented Approaches
A combiner

The
Strategy

Using combined 
target market 
approach—can aim 
at two or more 
submarkets with the 
same marketing mix

Exhibit 3­7
3­12

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Segmentation Dimensions
All
All Potential
Potential Dimensions
Dimensions

Qualifying
Qualifying Dimensions
Dimensions

Focus:

Relevant Purchase Behavior
Focus:

Relevant Customer Type

Determining
Determining Dimensions
Dimensions
(Product
(Product Type)
Type)

Focus:

Determining
Determining Dimensions
Dimensions
(Brand
(Brand Specific)
Specific)

Focus :

Specific Purchase Influence

Attraction to Brand

Exhibit 3­12
3­13

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill


Positioning of Different Bar Soaps
High
moisturizing
• Tone
4

• Zest

7

• Lever 2000

• Dove

2

5

• Safeguard
• Lux

Nondeodorant

8

Deodorant

3

1

“Product Space”

• Lava

Representing Consumers’ Perception for
6
Different Brands of Bar Soap
Low
Exhibit 3­13
moisturizing
3­14

• Dial
• Lifebuoy

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999

Irwin/McGraw-Hill


Key Terms
Breakthrough Opportunities
Competitive Advantage
Differentiation
S.W.O.T. Analysis
Market Penetration
Market Development
Product Development
Diversification
Market
Generic Market
Product­Market
Market Segmentation

3­15

Segmenting
Market Segment
Single Target Approach
Multiple Target Approach
Combined Target Approach
   Combiners
   Segmenters
Qualifying Dimensions
Determining Dimensions
Clustering Techniques
Positioning

For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill