CHAPTER THREE
Focusing Marketing
Strategy with
Segmentation and
Positioning
For use only with
Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
Focusing Marketing Strategy with Segmentation
and Positioning
Target
Market
Focusing Marketing Strategy with Segmentation
and Positioning (Exhibit 3-1)
Segmentation
•Defining markets
•Dimensions to use
•Identifying segments
•Identifying segments to target
•Segmentation approaches
Positioning
•Understanding customer’s view
•Positioning techniques
•Evaluating segment preferences
•Differentiating the marketing mix
•Relationship between
positioning & targeting
Naming Product Markets and Generic Markets
Customer
Needs
Product Type
Product-Market
Definition
Geographic
Area
Customer Type
No Product Type in Generic Market Definition
Search for Opportunities Can Begin by
Understanding Markets (Exhibit 3-3)
Selecting
target
marketing
approach
Narrowing down to
specific product-market
All
customer
needs
Some
generic
market
One
broad
productmarket
Segmenting
into possible
target markets
Single
target
market
approach
Homogeneous
(narrow)
productmarkets
Multiple
target
market
approach
Combined
target
market
approach
Target Marketers Aim at Specific Targets
(Exhibit 3-6)
In a product-market area
A segmenter
Using single target
market approach –
can aim at one
submarket with one
marketing mix
Using multiple target
market approach – can
aim at two or more
submarkets with different
marketing mixes
A combiner
Using combined target
market approach –
can aim at two or more
submarkets with the
same marketing mix
Segmenting vs. Combining
Profit Is the
Balancing
Point
Combiners
Try to Satisfy
Satisfy
“Pretty
“Pretty Well”
Well”
Too Much
Combining Is
Risky
Key
Issues
Segment or
Combine?
Segmenting
May Produce
Bigger Sales
Segmenters
Try to Satisfy
“Very Well”
Behavioral dimensions for segmenting consumer
markets
Information
required
Type of
problemsolving
Needs
Benefits
sought
Behavioral
Segmenting
Dimensions
Kind of
shopping
Brand
Brand
familiarity
familiarity
Thoughts
Rate of use
Purchase
relationship
Demographic dimensions for segmenting consumer
markets
Income
Sex or age
Demographic
Segmentation
Dimensions
Family size or family
life cycle stage
Occupation or
education
Ethnicity or social
class
Segmenting business markets
Kind of
relationship
Purchasing
methods
Type of buying
situation
Type of customer
Segmenting
Dimensions
for
Business
Markets
Demographics
How customers
will use the
product
What Dimensions Are Used to Segment Markets?
Qualifying
Dimensions
Determining
Dimensions
• Relevant to
including a
customer type in
a product-market
• Affect the
customer’s
purchase of a
product or brand
• Help identify
“core benefits”
OR
• Can be further
segmented
Segmenting Product Markets
Select (name) the broad
product-market
Identify potential
potential
customer
customer Needs
needs
Form homogeneous
homogeneous
Form
submarkets
submarkets
Best
Practice
Approach
for
Segmenting
Product-Markets
Identify
determining dimensions
dimensions
determining
Name possible
possible
Name
product-markets
product-market
Evaluate product-market
segments
segment
behaviors
Estimate size of each
product-market segments