1. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-1

2. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-2 IDENTIFYING MARKET SEGMENTS AND TARGETS C HAPTER

3. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Explain what market segmentation is, when to use it. 2.Identify the five steps involved in segmenting and targeting markets. 3.Recognize the different factors used to segment consumer and organizational markets.

4. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-4 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 4.Know how to develop a market-product grid to identify a target market and recommend resulting actions. 5.Explain how marketing managers position products in the marketplace. 6.Describe three approaches to developing a sales forecast for a company.

5. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin WHY SEGMENT MARKETS? Slide 9-7 What Market Segmentation Means  Market Segments Market Segments  Product Differentiation Product Differentiation  Segmentation: Linking Needs to Actions

6. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-10 FIGURE 9-2 FIGURE 9-2 Market-product grid showing how different Reebok shoes reach segments of customers with different needs

7. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Anheuser-Busch Budweiser Family –Budweiser (1876) –Bud Light (1982) –Bud (Light) Ice (1994) –Budweiser Select (2004)

8. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Anheuser-Busch Michelob Family –Michelob (1896) –Michelob Light (1978) –Michelob Amber Bock (1995) –Michelob Honey Lager (1997) –Michelob Ultra (2002) –Michelob Ultra Amber (2005)

9. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Anheuser-Busch Busch Family –Busch (1955) –Busch Light (1989) –Busch Ice (1995) Natural Family –Natural Light (1977) –Natural Ice (1995) –Natty Up (2005)

10. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Anheuser-Busch Non-Alc –O’Doul’s (1989) –O’Doul’s Amber (1998) –Busch NA (1994) Specialty –Bare Knuckle Stout (2003) –Anheuser World Lager (2003) –Tilt, Tequiza, ZiegenBock, malt liquors, energy drinks, Bacardi, etc.

11. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Nissan USA Maxima Altima Sentra Versa Z Quest Armada Pathfinder Murano Titan Frontier Xterra (Infiniti)

12. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-24 FIGURE 9-4 FIGURE 9-4 Segmentation variables and breakdowns for U.S. consumer markets

13. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-30 FIGURE 9-7 FIGURE 9-7 Segmentation variables and breakdowns for U.S. organizational markets

14. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-43 MARKETING NEWSNET Apple’s Segmentation Strategy— Camp Runamok No Longer

15. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Group Activity Retail Stores that Sell Electronics A store that caters to businesses and organizations A store that caters to home theater enthusiasts A store that caters to mobile audio (auto) enthusiasts A store that caters to college students and young people

16. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Group Activity Retail Stores that Sell Electronics 1.Come up with a name for each business. 2.Come up with an advertising slogan for the business. 3.Short list of products/services available at each of the businesses.

17. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-90 Market Segments Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process.

18. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-91 Product Differentiation Product differentiation is a strategy that involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products.

19. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-92 Market-Product Grid A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm.

20. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-93 Synergy Synergy is the increased customer value achieved through performing organizational functions more efficiently.

21. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-94 Usage Rate Usage rate is the quantity consumed or patronage (store visits) during a specific period of time.

22. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-95 80/20 Rule The 80/20 rule is a concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers.

23. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-96 Product Positioning Product positioning refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive products.

24. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-97 Product Repositioning Product repositioning involves changing the place an offering occupies in a consumer’s mind relative to competitive products.

25. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-98 Perceptual Map A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands relative to its own and then take marketing actions.

26. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-99 Market Potential Market potential is the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firm. Also called industry potential.

27. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-100 Industry Potential Industry potential is the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firm. Also called market potential.

28. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-101 Sales Forecast A sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Also called company forecast.

29. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-102 Company Forecast A company forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Also called sales forecast.

30. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-103 Direct Forecast A direct forecast involves estimating the value to be forecast without any intervening steps.

31. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-104 Lost-Horse Forecast A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future.

32. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-105 Survey of Buyers’ Intentions Forecast A survey of buyers’ intentions forecast involves asking prospective customers if they are likely to buy the product during some future time period.

33. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-106 Salesforce Survey Forecast A salesforce survey forecast involves asking the firm’s salespeople to estimate sales during a coming period.

34. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-107 Trend Extrapolation Trend extrapolation involves extending a pattern observed in past data into the future.

35. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 9-108 Linear Trend Extrapolation Linear trend extrapolation involves using a straight line to extend a pattern observed in past data into the future.