1. Focusing Marketing Strategy with Segmentation and Positioning
Chapter Four
Focusing Marketing Strategy with Segmentation and Positioning
Chapter 4
Focusing Marketing Strategy with Segmentation and Positioning
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2011 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

2. At the end of this presentation, you should be able to:
This slide refers to material on pp.88.
Know about defining generic markets and product-markets.
Know what market segmentation is and how to segment product-markets into submarkets.
Know three approaches to market-oriented strategy planning.
Know dimensions that may be useful for segmenting markets.
At the end of this presentation, you should be able to:
1. Know about defining generic markets and product-markets.
2. Know what market segmentation is and how to segment product-markets into submarkets.
3. Know three approaches to market-oriented strategy planning.
4. Know dimensions that may be useful for segmenting markets.
Know a seven-step approach to market segmentation that you can do yourself.

3. At the end of this presentation, you should be able to:
This slide refers to material on pp.88.
Know a seven-step approach to market segmentation that you can do yourself.
Know what positioning is and why it is useful.
Understand the important new terms.
At the end of this presentation, you should be able to :
Know what positioning is and why it is useful.
Understand the important new terms.

4. Search for Opportunities can Begin by Understanding Markets
This slide refers to material on pp
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What is a company’s market? a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services
Don’t just focus on the product
The product oriented approach ignores customers; Customers make a market!
Summary Overview
Strategy planning is a narrowing-down process.
Key Issues
What is a company’s market?
Market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs.
Don’t just focus on the product
The product oriented approach ignores customers.
Customers make a market!
Generic markets to product-markets
A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.
A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.
Broaden market definitions to find opportunities
Broader market definitions—including both generic market definitions and product-market definitions—can help firms find opportunities.
Too broad a definition makes the company’s efforts and resources seem insignificant.
Generic markets (broadly similar needs & offer diverse ways to satisfy needs) to product markets (very similar needs & offer various close substitutes)
Broaden market definitions to find opportunities (generic and product market)

5. Taking Advantage of Opportunities
This slide relates to material on pp
Summary Overview
La-Z-Boy has designed more fashionable chairs to tap into new market segments.
Key Issues
Prior to introducing a product, however, a firm such as La-Z-Boy has to have a good understanding of the target market.
It also needs to assess the current state of competition, including how consumers perceive the differences and similarities among alternative brands.
Should the organization then decide to proceed with the development of a marketing mix to serve a particular target market, it must differentiate its offering.
From this ad, it appears that La-Z-Boy also thinks that gender provides a good way to segment its market.
This presentation will cover how marketers can use market segmentation, differentiation, and positioning to take advantage of opportunities in the marketplace.

6. Relationship Between Generic and Product- Market Definitions
This slide relates to material on pp
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Customer user
Needs
(met by the product)
Generic
market
definition
Customer types
(who uses product)
Summary Overview
A complete product-market and generic market definition includes the following parts.
Key Issues
Managers need to think about more than the product they already produce and sell. This can be done by naming product markets and generic markets with a four-part description.
The product type--the type of good and/or service offered. It should meet customer needs.
Customer needs--refers to the needs of the customer (user) that are being met by the product.
Customer types--identify who specifically is using the product.
Geographic area--identifies where the market is located.
In defining product-markets, marketers provide names for each level of definition.
Discussion Question: What are the components of the product-market definition for Skippy peanut butter?
In defining generic markets, there is no product type; the definition consists of the customer needs, customer type, and geographic area.
Product
market
definition
Geographic area
(where market is located)
Product type
(good and/or service)

7. Interactive Exercise: Product-Market Definition
This slide refers to material on pp.92.
The purpose of this exercise is to help students see the product-market definitions behind products that are advertised. Print ads are provided for different products; students are challenged to identify the correct components of the product-market definition for each one.
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Basic Marketing. That same information is available as a Word document in the assets folder for the PowerPoint file. 7

8. What is Product-Market?
This slide refers to material on pp.92.
This ad demonstrates the benefits of an iDVD from Apple. From what you see in the ad, try to define the product-market for this product, in terms of:
product type (video editor, DVD recorder);
customer need (recording, archiving and distributing video);
customer type (young adults);
geographic area (in the world).
Video Operation:
Use the onscreen player controls to operate the video.
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© 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 8

9. Segmentation is a Two-Step Process
This slide relates to material on pp
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Naming broad product-markets
Disaggregating--break apart all possible needs into some generic markets and broad product-markets in which the firm may be able to profitably operate.
and
Summary Overview
Market segmentation is a two-step process. This process fails too often because beginners start with the whole mass market and try to find one or two demographic characteristics to divide up (segment) this market.
The steps in market segmentation are:
Naming broad product-markets, or disaggregating. Marketers must break apart all possible needs into some generic markets and broad product-markets in which the firm may be able to profitably operate.
Segmenting is an aggregating process--clustering people with similar needs into a market segment.
Market segment: a relatively homogeneous group of consumers who will respond to a marketing mix in a similar way.
Segmenting markets to selecting target markets and develop marketing mixes
a relatively homogeneous group of consumers who will respond to a marketing mix in a similar way.

10. Marketers Need Information about Competitors
This slide refers to material on pp.93.
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All customer needs
Narrowing down to specific product-market
Some generic market
Summary Overview
Market segmentation is a two-step process. This process fails too often because marketers do not realize the complexities of consumer behavior and they attempt to categorize a market around too few consumer-related variables of distinction.
Key Issues
All customer needs: Marketers should break apart or disaggregate all customer needs.
Generic market: a market with broadly similar needs and sellers offering various ways of satisfying those needs.
Defining the market broadly can help the marketer to uncover some potential new opportunities. The marketer can then narrow down to specific product-markets.
Product-market: a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.
Segmenting: the next step is an aggregating process – the marketer groups together people with similar needs into a market segment. Here we look for similarities.
Discussion Question: Using Exhibit 4-3 as a guide, think of the generic market for transportation and the broad product-market of customers for motorcycles. Can you segment the broad product market into several submarkets?
After defining the market, marketers can select a particular target market approach.
One broad product-market
Segmenting into possible target markets
Homogeneous (narrow) product-markets
Selecting target marketing approach
Single target market
Multiple target markets
Combined target markets

11. Market Segmentation Defines Possible Target Markets
This slide refers to material on pp
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Submarket 4
(Socializers)
Submarket 1
(Exercisers)
Submarket 2
(Off-road
adventurers)
Submarket 3
(Transportation riders)
Submarket 5
(Environmentalists)
Broad product-market (or generic market) name goes here (The bicycle-riders product-market)
Summary Overview
Market segmentation groups customers with similar needs.
The first step in effective market segmentation involves naming a broad product market of interest to the firm.
Market grid is a visual aid to market segmentation.
Segmenting is an aggregating process
Key Issues
Here we can see five different submarkets for the broad product-market of bicycle riders.
Discussion Question: What are the primary needs for each of these submarkets for bicycles?

12. How Far Should the Aggregating Go?
This slide refers to material on pp
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A. Product-market showing
three segments
B. Product-market showing
six segments
Summary Overview
As shown in this exhibit, one can segment a market into any number of segments, (three segments, exhibit 4-5A and six segments, exhibit 4-5B) but how far should a marketer go in aggregating similar consumers into target markets?
Key Issues
Criteria for segmenting:
Homogeneous (similar) within — the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.
Heterogeneous (different) between — the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.
Substantial — the segment must be big enough to be profitable.
Discussion Question: Some firms, like Dell Computer, are able to market directly to individuals and to customize products and services to their unique needs. What advancements make this mass customization possible?
Operational — the segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables.
Status dimension
Dependability dimension

13. Three Ways to Develop Market-Oriented Strategies
Single Target Market Approach
select one homogeneous segment as the target
Multiple Target Market Approach
select two or more target segments
develop a different marketing mix for each segment
Combined Target Market Approach
combine submarkets into a single target market
develop one marketing mix for the combined target

14. Segmenters and Combiners Aim at Specific Target Markets
This slide refers to material on pp.96.
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Single target
market approach
A segmenter develops a different marketing mix for each segment.
The Strategy
Strategy two
Summary Overview
Market-oriented strategies refine the segmentation process into actionable submarkets.
Key Issues
Single target market approach--the marketer segments the market and picks one of the homogeneous segments as the firm’s target market.
Multiple target market approach--the marketer segments the market, chooses two or more segments, and then treats each segment as a separate target market needing a different marketing mix.
Discussion Question: Suppose you are an entrepreneur who is preparing to start a small business. Would you be more likely to select a single or multiple target market approach? Why?
Combined target market approach--the marketer combines two or more submarkets into one larger target market as a basis for one strategy.
Seeks economies from having one effort serve more than one market.
Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.
They hope to increase sales by getting a much larger share of the business in the market(s) they target.
Multiple target
market approach
Strategy one
Strategy three
The
strategy
A combiner aims at two or more submarkets with the same marketing mix.

15. EXTENSIVE DISTRIBUTION ALL POTENTIAL USERS OF A WRITING INSTRUMENT
UNSEGMENTED MARKET STRATEGY WITH A SINGLE MARKETING MIX COMMUNITY WRITING COMPANY
MARKETING MIX
VIEW OF MARKET
LEAD PENCIL
79 CENTS
TELEVISION
EXTENSIVE DISTRIBUTION
ALL POTENTIAL USERS OF A WRITING INSTRUMENT

16. SEGMENTED MARKETING STRATEGY WITH MULTIPLE MARKETING MIXES
VIEW OF MARKET
FELT-TIP PEN
$1.00
CAMPUS NEWSPARER
VENDING MACHINES
SEGMENT A
(STUDENTS)
49 CENTS
PERSONAL SELLING
DIRECT FROM FACTORY
SEGMENT B
(PROFESSORS)
GOLD INK PEN
$50.00
MAGAZINES
DEPARTMENT STORES
SEGMENT C
(EXECUTIVES)

17. A SEGMENTED MARKETING STRATEGY WITH SINGLE MARKETING MIX
VIEW OF MARKET
SEGMENT A
(PROFESSORS)
FELT-TIP PEN
$1.00
CAMPUS NEWSPARER
VENDING MACHINES
(STUDENTS)
SEGMENT C
(EXECUTIVES)

18. Segmenting vs. Combining
This slide refers to material on pp
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Too Much Combining Is Risky (innovative segmenter may chip away)
Combiners Try to Satisfy “Pretty Well”
(Try to increase market size)
Segmenters Try to Satisfy “Very Well”
(develop marketing mix for each segment)
Key Issues
Summary Overview
There are many factors that affect the choice between being a “segmenter” and a “combiner.”
Key Issues
Combiners try to increase the size of their target markets by combining two or
more segments.
Too much combining is risky, because an innovative segmenter may “chip away” at the various segments of the combined target market.
Discussion Question: What companies that you are familiar with have suffered because segmenters have “chipped away” pieces of their target markets?
Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.
Segmenters try to satisfy customers “very well.”
Segmenting may produce bigger sales, if the segmenter can capture a large share of a smaller market segment.
Many consumers are willing to pay more in order to satisfy their needs more precisely.
Segment or combine? Depends on:
firm’s resources;
competition in the various segments;
similarity of customer needs, attitudes, and buying behavior.
Profit is often the balancing point, because the profit potential often dictates how specialized a marketing mix can be.
Profit Is the Balancing Point (dictates how specialized a marketing mix can be)
Segmenting May Produce Bigger Sales
(consumers are willing to pay more in order to satisfy their needs more precisely)
Segment or Combine?
(based on the firms resources; competition in various segments; similarity of customer needs, attitudes, buying behavior)

19. Checking Your Knowledge
This slide relates to material on pp.96.
A neighborhood restaurant in a diverse market area sought to appeal to a wide range of consumers by offering a menu with a few choices from each of several different styles of cuisine—American, Italian, Chinese, German, Thai, and Indian. Recently, the restaurant has lost sales to newer restaurants that offer many choices from a single style of cuisine. This example illustrates the danger of adopting a _______________ approach.
Single target market
Multiple target market
Combined target market
Structured target market
Mixed-mode market
ANSWER: C
Checking your knowledge (answer explanation):
The neighborhood restaurant has combined two or more submarkets (American, Italian, Chinese, German, Thai, and Indian) into one larger target market as a basis for one strategy. This is the definition of the combined target market approach. Selection ‘C’ is the best option.

20. What Dimensions are used to Segment Markets?
This slide refers to material on pp.99.
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Qualifying
Dimensions
Relevant to including a customer type in a product-market
Help identify “core benefits”
Determining
Dimensions
Affect the customer’s purchase of a product or brand
Can be further segmented OR
Summary Overview
To select the important segmenting dimensions, think about two different types of dimensions: qualifying and determining.
Key Issues
Qualifying dimensions are those relevant to including a customer type in a product-market.
Help identify the “core features” that must be offered to everyone in a product-market.
Determining dimensions are those that actually affect the customer’s purchase of a specific product or brand in a product-market.
Can be further segmented into groups.
Discussion Question: Can you describe a qualifying dimension and a determining dimension that help to define a product-market?

21. QUALIFYING DIMENSIONS FOR A PROSPECTIVE CAR BUYER
MONEY OR CREDIT
DRIVER’S LICENSE
NEED
JOB THAT REQUIRES A CAR
CHILDREN
ETC.

22. DETERMINING DIMENSIONS FOR THE CAR
STYLE
PERFORMANCE
APPEARANCE
SAFETY
ETC.

23. Behavioral dimensions for segmenting consumer markets
This slide relates to material in Exhibit 4-8 and on p. 102.
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Needs (e.g., economic; functional)
Benefits Sought (e.g., gas mileage)
Information required (lot vs. limited)
Type of problem solving (approaches)
Behavioral
Segmenting
Dimensions
Thoughts (e.g., beliefs about a brand)
Kind of shopping (comparison or convenience)
Rate of use (e.g., heavy, medium, light)
Summary Overview
Segmenting dimensions guide marketing mix planning. Market segmentation forces marketing managers to decide which product-market dimensions might be useful for planning marketing strategies. A product-market may be described by behavioral segmentation dimensions.
Key Issues
 Needs – for example, customer needs could be economic, functional, or psychological;
 Benefits sought tend to be situation specific – for example a car buyer could be looking for good gas mileage or the ability to seat seven people.
Thoughts – buyers may be grouped by whether they have favorable or unfavorable attitudes or beliefs about the brand or product category.
 Rate of use – some customers may be heavy, medium, light or even non-users
Purchase relationship – customers could be segmented by whether they have an ongoing relationship, intermittent use, or a bad relationship.
 Brand familiarity – might vary from insisting on a brand to nonrecognition or rejection.
 Kind of shopping – refers to whether buyers do comparison shopping or perhaps buy on a convenience basis.
Buyers might use different problem solving approaches – and could be grouped in this way.
 Or buyers may have different information needs – some customers want a lot of information while others need little.
Discussion Question: What benefits do consumers seek in purchasing and using toothpaste? How do these benefits affect segmentation among consumers of toothpaste?
Brand familiarity (insisting; non-recognition)
Purchase relationship (ongoing; intermittent; bad relationship)

24. Examples of Possible Segmenting Dimensions for Consumer Markets
CUSTOMER RELATED:
Customer needs (automobiles)
Geographic location (tire chains)
Age (insurance policies)
Sex (clothing)
Family size (child care services)
Income (vacation services)
Education (magazines)
SITUATION RELATED:
Benefits offered (toothpaste)
Consumption/use patterns (cameras)
Brand familiarity (health care products)
Buying situation (soft drinks)

25. Geographic dimensions for segmenting consumer markets
This slide relates to material in Exhibit 4-8 on p. 102.
Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Region of world or country (North America vs. Europe)
Region in a country (South vs. North)
Geographic
Segmentation
Dimensions
Summary Overview
Geographic dimensions are often used for segmentation. There may be different languages or laws in different countries – or a business may only be located in a certain geography.
Key Issues
Region of the world or country – for example, North America versus Europe, or New Zealand versus Japan.
 Region in a country – for example in the United States, the Rocky Mountain Region, Southeast, or Northeast may provide a basis for segmentation.
 The size of a city may also be useful for segmentation.
Size of city

26. Demographic Dimensions for Segmenting Consumer Markets
This slide refers to material on pp.100.
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Income
Sex or age
Demographic Segmentation Dimensions
Summary Overview
In addition to behavioral and geographic dimensions, there are also demographic segmentation dimensions.
Key Issues
Income provides one basis – a marketing mix may appeal most to families with a particular income.
Sex and age provide another demographic base of segmentation.
Family size or family life cycle stage. Family life cycle stages include young singles, young married with no children, families with young children, divorced, empty nesters, or seniors.
Occupation and education can also be used for segmentation.
Finally, social class – lower, middle or upper.
And ethnicity – for example: Hispanic, Asian, Native American, white, or multiracial.
Discussion Question: Considering the demographic variables of age and education levels, can you provide examples of products or services that are targeted to college students?
Family size or family life cycle
Occupation or education
Ethnicity or social class

27. Segmenting business markets
This slide relates to material in Exhibit 4-9 on p. 103.
Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Kind of relationship (e.g., weak vs. strong loyalty)
Type of customer (service, Gov’t agency or manufacturer
Segmenting Dimensions for Business Markets
Demographics (geographic locations; size of firm or industry)
Purchasing methods (bids, e-commerce websites)
Summary Overview
There are also many possible segmentation dimensions in the business or organizational market.
Key Issues
Among these dimensions are:
 Kind of relationship between buyer and seller – relationships might range from weak loyalty to strong loyalty to a vendor.
 Type of customer – customers may be segmented by whether they are service producers, a government agency, or a manufacturer.
 Demographics variables include geographic locations, size of the company, or industry.
 How the customer will use the product –will the product being sold be used in an installation, as a component or as a raw material .
 Type of buying situation – some characteristics of the buying situation might include the number of people involved in the purchase or whether the buying process is centralized or decentralized.
 Purchasing methods refer to factors like whether the buyer uses bids, vendor analysis, e-commerce websites, or other methods of buying.
Type of buying situation (centralized or decentralized)
How customers will use the product (installation, component, raw material)

28. Examples of Possible Segmenting Dimensions for Business Markets
Type of organization (computer software)
Closeness of relationship with customer (travel services)
Size (buildings)
North American Industry Classification System (NAICS) codes (machinery)
Geographic location (electronic parts)
Type of product (X-ray film)
Buying situation (automobile components)
Source loyalty (office supplies)
Reciprocity (transporting services)

29. Business-to-Business Segmentation
This slide relates to material on pp. 101.
Summary Overview
This ad from Baldor shows how business-to business marketers incorporate segmenting dimensions in their marketing tactics.
Key Issues
For example, this ad is targeted at a particular type of customer—firms that have large vehicle fleets and a need for industrial electric motors.
The type of buying situation is also relevant.
It most likely represents a modified rebuy purchase—if the fleet buyer is considering alternative sources for replacement parts. 29

30. Checking Your Knowledge
This slide relates to material on pp. 100.
The pastor of a new church decides to start prospecting for new members. He focuses first on people who live within a mile radius of the church, and contacts them via mail and by visiting them door-to-door. He then moves on to people who live from one to two miles away from the church, then two to three miles away, and so on, up to a limit of ten miles away. The pastor appears to be focusing on a __________ segmenting dimension.
Behavioral
Demographic
Benefit
Geographic
Relationship
ANSWER: D
Checking your knowledge (answer explanation):
The pastor is segmenting potential church members based on physical location in proximity to the church. This proximity to the church is a geographic segmenting dimension; therefore, selection ‘D’ is the best option. 30

31. Ethical Issues in Selecting segmenting dimensions
This slide refers to material on pp.102.
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Ethical Issues
International Issues
Exploitation
Creates Unnecessary Wants
Does Harm
Summary Overview
Along with the segmenting dimensions, there are other considerations for marketers in market segmentation.
Key Issues
Ethical issues: some critics argue that target marketing:
exploits consumers;
makes them want things they don’t need;
may even cause physical, emotional, or financial harm.
Discussion Question: What types of companies are criticized the most for exploiting particular target markets?
Success in international marketing requires even more segmenting, because there are so many countries, languages, and unique cultures.
However, segmenting international markets adds just one step to the whole process of segmentation. First, marketers must segment by country or region, and then proceed with the same basic segmentation approaches already discussed.

32. Checking Your Knowledge
This slide relates to material on pp. 101.
A father taking his family of four on vacation was trying to make hotel reservations for a trip to Disney World. He first eliminated all hotels that were in excess of two miles from the main gate to Disney World. Then he focused exclusively on hotels offering suites so that his family would have more space. He eventually selected the Excelsior Hotel because he knew the hotel offered suites and a complementary breakfast. For him, the available of the complementary breakfast was a ______________ segmenting dimension.
Qualifying
Determining
Differentiated
Geographic
demographic
ANSWER: B
Checking your knowledge (answer explanation):
Qualifying dimensions are those relevant to including a customer type in a product-market. In the above question, after the father narrowed his search to within two miles from Disney World, the qualifying dimension was a hotel offering suites. After he selected hotels offering suites, he made his decision based on the availability of the complementary breakfast. The breakfast offering is a determining dimension. It was the one that actually affected the customer’s purchase (reservation) of a specific product (hotel) in a product-market (p. 102). Therefore, selection ‘B’ is the best option.

33. Segmenting Product Markets
1. Select the broad product-market (what market firm wants to be in)
2. Identify potential
customer needs (why people buy product)
Segmenting Product Markets
This slide refers to material on pp
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
3. Form initial homogeneous Submarkets
(typical customer/aggregate similar people)
4. Identify determining dimensions(customer
-related characteristics—e.g., economic needs)
Best
Practice
Approach
for
Segmenting
Product-Markets
5. Name possible product-markets
(based on importance of determining detm.)
Summary Overview
This seven-step process for segmenting markets will help to find the determining dimensions for product types.
Key Issues
Select the broad product market: Decide what broad product-market the firm wants to be in—based on the firm’s objectives or current position.
Identify potential customers’ needs: Write down as many basic needs as possible—reasons why people buy current offerings in this product-market.
Form homogeneous submarkets—that is, narrow product markets:
Start by forming one submarket around a typical type of customer; aggregate similar people into the submarket.
Write down important need dimensions and customer-related characteristics.
Put people who don’t fit into one or more new submarkets.
Identify the determining dimensions for each submarket—the ones that determine the choice of a product or brand.
Name the possible product-markets—based on the relative importance of the determining dimensions.
Evaluate why product-market segments behave as they do.
Make a rough estimate of the size of each product-market segment—using available demographic data to determine which market segments are large enough to be profitable.
Use this process to outline the kinds of marketing mixes that would appeal to various markets—whether we want to serve new customers or better serve current customers.
6. Evaluate product-market
Segments (why behave as they do)
7. Estimate size of each
product-market segments

34. More Sophisticated Techniques May Help in Segmenting
This slide relates to material on pp
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Clustering
(find similar patterns)
Customer Database
(past customer behavior)
Summary Overview
Computer-aided methods afford marketers additional help in segmenting markets. The ability of the computer to record, sort, recombine, and analyze a great many variables relating to consumer behavior at the same time allows marketers to develop much more sophisticated market segments.
Key Issues
Among the techniques are as follows:
 Clustering techniques: try to find similar patterns within sets of data.
 Customer databases:
Past customer behavior is often the source of information.
Database sorting is especially helpful in providing services.
Discussion Question: How do you provide information to marketers that are attempting to meet your needs?
 Customer relationship management (CRM):
Sophisticated modeling techniques can predict the types of products or services an individual customer might want, based on the information stored in the database.
Anticipation of emerging needs helps a marketer to maintain a long-term relationship with customers.
Customer Relationship Management (CRM) (modeling help predict types of products customer might want or need based on information in database)

35. Positioning This slide relates to material on pp. 110.
Summary Overview
Marketers can differentiate the marketing mix in order to meet customer needs better than competitors and build a competitive advantage.
Key Issues
Differentiation:
How the marketer tries to distinguish her or his offering in the marketplace -- how it is set off from the competition.
What really matters is that the consumer perceives the marketer’s product to be different.
Positioning:
How customers think about proposed and/or present brands in a market.
Marketing research techniques are designed to collect information about consumer perceptions and determine differences among competing products in the mind of the consumer.
Firms often use promotion to help “position” how a marketing mix meets target customers’ specific needs.
The Rolex ad showcases the Rolex Oyster Perpetual Sea-Dweller DEEPSEA Men's Watch.
Rolex is one of the most prolific Swiss wristwatch manufacturing companies in the world.
With their sheer elegance and uncompromising attention to detail, Rolex is the largest luxury watch brand worldwide. 35

36. + Positioning This slide relates to material on pp. 85-86.
Summary Overview
Marketers can differentiate the marketing mix in order to meet customer needs better than competitors and build a competitive advantage.
Key Issues
Differentiation:
How the marketer tries to distinguish her or his offer in the marketplace -- how it is set off from the competition.
What really matters is that the consumer perceives the marketer’s product to be different.
Positioning:
How customers think about proposed and/or present brands in a market.
Marketing research techniques are designed to collect information about consumer perceptions and determine how different competing products are in the mind of the consumer.
In this ad, Thomasville sells high-quality furniture, but it faces the same problem faced by many other furniture makers:
It's hard to identify the product with the brand name.
Customers tend not to be very loyal to any particular brand of furniture.
These characteristics of the furniture industry make the positioning challenge difficult.
Discussion Question: Can you think of other brands of furniture? In your opinion, how are they positioned against each other in the market? Does the marketer’s intended positioning match consumer perceptions? +
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

37. “Product Space” Representation of Positioning
This slide refers to material on pp.111.
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
High moisturizing
low moisturizing 2 1 4 5 7 3 8 6
Zest
Lever 2000
Safeguard
Dial
Lifebuoy
Tone
Dove
Lux
Coast
Lava
Sensitive
Summary Overview
This diagram shows the output of a computer program that does positioning analysis.
Key Issues
Two attributes of soap that account for the greatest difference in consumer perceptions:
degree to which the soap is a deodorant soap.
degree to which the soap is a moisturizing soap.
The closer that any two dots are to each other, the more similar those brands are in the minds of consumers.
Each segment may have its own preferences. The circles refer to the size of market attracted to a combination of attributes.
Discussion Question: What is the largest segment in the diagram? What brands serve that segment best?
Positioning may also lead to combining instead of segmenting, if a firm can successfully appeal to several segments with the same product.
Therefore, positioning studies can be part of a broader analysis because they:
identify important attributes of the product offerings in a market;
identify what offerings are likely to appeal to segments;
provide a basis for changing the marketing mix, should a marketer decide to reposition a product.
Nondeodorant
Deodorant

38. Positioning and Advertising
This slide refers to material on pp.110.
Using the classic Three Bears fairy tale, HUMMER is conveying the new H3's place in the Hummer family. The H3 is positioned as an alternative in the midsize segment, vs the H1 and the H2.
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© 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 38

39. TOO MANY UNNECESSARY PRODUCTS ARE OFFERED
NECESSITY IS IN THE EYE OF THE BEHOLDER.
WHO SAYS THIS IS AN UNNECESSARY PRODUCT?
NOT FOR THIS DOG!

40. Study Question 1 Which of the following is the BEST
example of a "generic market?" 
A. the meat market. B. the minivan market. C. the e-commerce market. D. the beer market. E. the "singles" entertaining market.

41. Study Question 2 Which of the following is the BEST
example of a "generic market?" 
A. The adult "personal expression" market
B. The roller blade market
C. The female exercise shoes market
D. The sports drink market
E. The sporting goods market

42. Study Question 3 A product-market is one
A. In which exchanges are based on barter rather than money.
B. Where one seller has a patent for a superior product and other firms try to imitate the leader the best they can.
C. Where all of the customers want the same product but will consider a substitute if their preferred brand is not available.
D. In which competing sellers offer physically or conceptually similar products.
E. In which no intermediaries operate.

43. Study Question 4 Which of the following offers a firm the
greatest potential for profit? 
A. Mass marketing
B. The multiple target market approach
C. The combined target market approach
D. The single target market approach
E. Any of the above—depending on the situation .

44. Study Question 5
A large firm with ample resources wants to minimize the risk of
"inviting“ competitors to "chip away" at its target market(s). It has
segmented its broad product-market and identified several
Homogeneous submarkets—each of which is large enough to offer
attractive sales and profit potential. Which of the following
approaches should the firm use?
A. Multiple target market approach
B. Mass marketing approach
C. Combined target market approach
D. Single target market approach
E. All of the above  .