For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill 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 Focusing Marketing Strategy with Segmentation and Positioning (Exhibit 3-1)

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Generic & Product Markets Generic Market – a market with broadly similar needs and sellers offering various, often diverse ways of satisfying those needs (pg 62). Product Market – a market with very similar needs and sellers offering close substitute ways of satisfying those needs (pg 62).

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit Generic and Product-Market Definitions Generic Market Definitions Generic Market Definitions Product- Market Definitions Product- Market Definitions Customer (user) needs Customer (user) needs Customer types Customer types Geographic area Geographic area Product type (good and/or service) Product type (good and/or service) +++

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Criteria for Segmenting Customers within a segment should be homogeneous similar responses to marketing mix similar segmenting dimensions Customers in different segments are heterogeneous different responses to marketing mix different segmenting dimensions Segment is substantial segment is big enough to be profitable Segmenting dimensions are operational useful for identifying customers helpful in deciding on marketing mix

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 3-3 Combined target market approach Single target market approach Multiple target market approach All customer needs Some generic needs One broad product market Homogeneous (narrow) product markets Narrowing down to specific product-market Segmenting into possible target markets Selecting target marketing approach 3-6 Narrowing Target Markets

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Submarket 1 (Exercisers) Submarket 2 (Off-road adventurers) Submarket 3 (Transportation riders) Submarket 4 (Socializers) Submarket 5 (Environmentalists) Broad product-market (or generic market) name goes here (The bicycle-riders product-market) Exhibit Market Segmentation

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

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Using single target market approach— can aim at one submarket with one marketing mix The Strategy A segmenter Exhibit Market-Oriented Approaches

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Using multiple target market approach— can aim at two or more submarkets with different marketing mixes Strategy Three Strategy Two Strategy One A segmenter Market-Oriented Approaches Exhibit

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Strateg y Using combined target market approach—can aim at two or more submarkets with the same marketing mix A combiner Exhibit Market-Oriented Approaches

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill All Potential Dimensions Qualifying Dimensions Determining Dimensions (Product Type) Determining Dimensions (Product Type) Determining Dimensions (Brand Specific) Determining Dimensions (Brand Specific) Relevant Purchase Behavior Relevant Customer Type Specific Purchase Influence Attraction to Brand Focus: Exhibit Segmentation Dimensions

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill “Product Space” Representing Consumers’ Perception for Different Brands of Bar Soap NondeodorantDeodorant High moisturizing Low moisturizing Zest Lever 2000 Safeguard Dial Lifebuoy Lava Lux Dove Tone Positioning of Different Bar Soaps Exhibit