1. © 2012 Pearson Education, Inc. publishing Prentice Hall. Chapter 4 Strategy Formation

2. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-1 - Strategy Formation 2

3. © 2012 Pearson Education, Inc. publishing Prentice Hall. Identifying Competitive Advantages  A company has a competitive advantage if it possesses resources or capabilities that are:  Valuable in the market  Rare  Not imitable or substitutable  Transferable to other markets or products 3

4. © 2012 Pearson Education, Inc. publishing Prentice Hall. Segmenting the Market  The primary reason to differentiate customers into segments is to capture the strategic advantage of meeting differing needs with tailored mixes  The objective and the key to successful segmentation is to find differing needs that match the firm’s competitive advantages and thus can be served at a profit better than by the competition 4

5. © 2012 Pearson Education, Inc. publishing Prentice Hall. Segmenting the Market  There are two types of variables to be distinguished in the segmentation process for (B2C) and (B2B) markets:  Segmentation bases  Segment descriptors 5

6. © 2012 Pearson Education, Inc. publishing Prentice Hall. Table 4-1 - Needs, Wants, Benefits, and Demand 6

7. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-2 - Example of Segmentation Bases and Descriptors 7

8. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-3 - Segmentation Scope 8

9. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-4 - Differentiated Marketing Approaches 9

10. © 2012 Pearson Education, Inc. publishing Prentice Hall. Segmentation Dynamics  Segment preferences change—a segment’s ideal product can shift over time, sometimes quite rapidly  Segments can split or merge 10

11. © 2012 Pearson Education, Inc. publishing Prentice Hall. Targeting  Matching the firm’s competitive advantages with attractive market opportunities  Targeting is the crucial junction in formulating strategy and translating strategy into tactics, matching external opportunities with internal strengths  Targeting is where the strategy is specified and becomes concrete 11

12. © 2012 Pearson Education, Inc. publishing Prentice Hall. Targeting  Frameworks that help identify attractive markets to target with valuable offerings, the  Two most powerful of which are:  SWOT analysis  The application of strength/ attractiveness matrices to segments 12

13. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-5 - SWOT Analysis 13

14. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure 4-6 - Strengths/Attractiveness and Segmentation 14

15. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall