1. Marketing Management 2nd Edition
Michael R. Czinkota and Masaaki Kotabe
Chapter 7:
Market Segmentation, Positioning, and Branding

2. Chapter Outline What is a Market? Market Boundaries
Market Share and the Pareto Effect
Market Segmentation
Types of Segmentation
Segment Viability
Positioning
Approaches to Segmentation
Product Differentiation
Branding Policies

3. What is a Market?
All the potential customers sharing particular needs and wants who might be willing to engage in exchange to satisfy their needs or wants.

4. Market Boundaries Examples: Product or service category People who buy
luxury cars
Geography
Westerners prefer
dark roasted coffee
Hospitals have different
needs than corporate
health centers
Physical customer
groupings
Intangibles
Low-end versus
high-end market

5. Market Boundaries (cont.)
Customers
Who are your own
customers?
Users
Who uses the category
of products?
Prospects
Individuals in the market
who are not your
customers.

6. Market Share and the Pareto Effect
A small number of
customers (20%)
may represent a
large percentage of
sales (80%).
Percentage of sales
that a firm’s product
has in a particular
market.

7. Market Segmentation: Mobil’s Gas Segments

8. Market Segmentation: By Consumer Behavior
Consumer characteristics:
Geographic
Demographic
Socio-economic
Lifestyles

9. Market Segmentation: By Consumer Behavior (cont.)
Consumer responses:
Occasions
Benefits
Usage frequency
Attitudes

10. Market Segmentation: Other Types of Segmentation
Benefit segmentation
Segmentation by consumption profile
Segmentation by national boundaries

11. Segment Viability Characteristics of segment viability:
Size: Must be large enough to generate volume for adequate profit.
Identity: Should have unique characteristics that can be identified.
Relevance: Must be relevant to the important characteristics of the product.
Access: Must be able to be reached.

12. Positioning Segmentation: grouping of people by needs or wants.
how a product is
geared to attract
this market segment.

13. Approaches to Segmentation
Single Segment: Focus on a single market segment.
E.g., Mercedes
Multiple Segments: Target two or more segments with one brand.
E.g., The Gap

14. Approaches to Segmentation
Cross segments: Offer same product across different segments.
E.g., Dupont’s Teflon
Full coverage: Offer product to entire market.
E.g., Coca-Cola

15. Approaches to Segmentation
Counter segmentation: Consolidate several segments and launch or reposition a product to cover all segments.
E.g., Nissan and Toyota

16. Product Differentiation
Used to give products unique identities to distinguish them from their competitors.
Example: Branding
Glass
cleaners
Windex

17. Branding Policies for New Products
Company name
E.g., IBM
Family branding
E.g., Mercedes, Black & Decker
Individual branding
McDonald’s, Seven-Up

18. Branding Policies for Existing Products
extension
Use existing brand name for
new or modified products.
E.g., Diet Coke, Cherry Coke
Multibrands
Offer several different brands in
competition with each other.
E.g., Tide, Fab & Cheer

19. Branding Policies for Existing Products
Two different brand team up
to create a new product.
E.g., General Foods & Hershey’s
created “Reese’s Peanut Butter
Puffs” cereal
Co-branding
Private brand: retailer’s own
branded product.
E.g., Sears uses Kenmore
Generic brand: no brand name.
E.g., Potato chips
Private and
generic brands