Transcript Chapter04

of
MARKETING
The Market
Segmentation
Process
Chapter
Chapter
4
The Market Segmentation Process
Chapter
4
Objectives
1. Explain the factors underlying market segmentation
strategy choices.
2. Outline the stages in the market segmentation process.
3. Explain the concept of positioning within market
segments.
4. Show how target market decision analysis can be used
in market segmentation.
5. Show how target market decision analysis can be used
to assess the assortment of products offered to the
market.
4-1
The Market Segmentation Process
Chapter
Alternative Market Matching
Strategy
1.
2.
3.
4.
5.
4-2
Company resources
Differentiability of products
Stage in product life cycle
Competitors’ strategies
Size of segment
4
The Market Segmentation Process
Chapter
4
Figure 4.1
Segmentation Strategies
4-3
MARKET
STRATEGY
SMALL OR FOCUSED
MARKET
LARGE
MARKET
Multi-offer
High value niche
Differentiated
(Many products)
e.g.,Custom home
builders
e.g., Ford Motor Co.
Single-offer
(One product)
Concentrated
e.g., Jolt Cola
Mass marketing
(Undifferentiated)
e.g., Magic® Baking
Powder
The Market Segmentation Process
Chapter
4
Single-Offer Strategy
• The attempt to satisfy a large or a
small market with one product and
single marketing program.
4-4
The Market Segmentation Process
Chapter
4
Multi-Offer Strategy
• The attempt to satisfy several
segments of the market very well with
specialized products and unique
marketing programs aimed at each
segment.
4-5
The Market Segmentation Process
Table 4.1
Chapter
4
Market Matching Strategies (1 of 2)
PRODUCT OFFERINGS
Ford Motor Company
Early 2000s
Multi-Offer
Strategy
1955
Single-Offer
Strategy
Early 2000
Multi-Offer
Strategy
General-Purpose Cars
Small
Model T
Medium
Model T
Large
Focus
Taurus
Crown Victoria
Beetle
Golf
Jetta
Passat
Sporty Cars
Low-Priced
ZX2 Escort
Market
Segment
1908
Single-Offer
Strategy
Audio/Volkswagen/Porsche
Medium-Priced
Cougar
Mustang
High-priced
Jaguar XK8
Aston Martin DB7
4-6a
new Beetle
GTI
Cabrio
Audi TT
Porsche Boxster
Porsche 911
The Market Segmentation Process
Table 4.1
4
Market Matching Strategies (2 of 2)
Ford Motor Company
Market
Segment
1908
Single-Offer
Strategy
Luxury Cars
Medium-priced
Early 2000s
Multi-Offer
Strategy
Lincoln Continental
Lincoln Town Car
Jaguar S-Type
High-priced
Vans
Windstar
Econoline
Trucks
Small
Medium
Sport Utility Vehicles
(SUVs)
4-6b
Chapter
Model T (Truck)
Ford Ranger
Ford “F” series
Explorer
Expedition
Excursion
Lincoln Navigator
Audio/Volkswagen/Porsche
1955
Single-Offer
Strategy
Early 2000s
Multi-Offer
Strategy
Audi A4
Audi A6
Audi A8
EuroVan
The Market Segmentation Process
Figure 4.1
Chapter
Market Segmentation Decision Process
Stage 1
Identify bases for segmenting markets.
Stage 2
Develop relevant market segment profiles.
Stage 3
Forecast total market potential for each segment.
Stage 4
Analyze competitive forces
within each segment.
4
Determine marketing program
to serve each segment.
Forecast own market share for each segment.
Estimate cost benefit for each segment.
Stage 5
Do benefits achieve company goals and justify development of each segment?
Select target market segment(s).
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The Market Segmentation Process
Chapter
4
Target Market
• A market segment that a company
chooses to serve.
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The Market Segmentation Process
Chapter
4
Target Market Decision Analysis
• The evolution of potential market
segments.
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The Market Segmentation Process
Chapter
4
Figure 4.3
The Divide-the-Box Procedure
The Entire Market
The Market Divided into Segments
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The Market Segmentation Process
Chapter
4
Figure 4.4
Hypothetical Divide-the-Box Example for Radio
The Entire Market for Radio
The Market Segment for Radio by Age & Benefit
Age
Benefit
Information
Entertainment
Companionship
4-11
Teens
Young
Adult
Middle
Adults
Senior
The Market Segmentation Process
Chapter
4
Figure 4.5
Hypothetical Middle Adult Segment for Radio
Middle Adults
4-12
Early
Retiree
Professional
Information
X
X
Entertainment
X
Companionship
X
Hourly
Employee
Business
Owner
X
X
The Market Segmentation Process
Figure 4.6
Chapter
4
Hypothetical Middle Adult Segment for
Information Radio
Middle Adults
Early
Retiree
Breaking news
X
Business
Owner
X
Political
commentary
X
X
X
X
Financial market
commentary
X
Advice
Call-in
X
X
X
Gossip
X
Weather
4-13
Professional
Hourly
Employee
X
X
The Market Segmentation Process
Chapter
4
Product Mix
• The assortment of product lines and
individual offerings available from a
company.
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The Market Segmentation Process
Figure 4.7
Chapter
Using Target Market Decision Analysis to
Evaluate a Product Mix
Product
Offering
Romantic
Psychographic Category
Belongers
Achievers
Etc.
Phone M
Phone A
Phone C
Character
Phone R
Phone Y
Contemporary
Source: “Properly applied Psychographics Add Marketing Luster,” Marketing News (November 12, 1982), p. 10.
Reprinted with permission by the American Marketing Association.
4-15
4
The Market Segmentation Process
Figure 4.8
Chapter
4
Hypothetical Positioning Map: CBC
versus Commercial Radio
Entertaining
Commercial
Talk Radio
*As it Happens
Commercial
Talk Radio
*This Morning
CBC local*
After Hours*
Informational
Music
*CBC News
Disc Drive*
Take 5*
*Ideas
Challenging
4-16
The Market Segmentation Process
Chapter
4
Positioning
• Shaping the product and developing a
marketing program in such a way that
the product is perceived to be (and
actually is) different from competitors’
products.
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The Market Segmentation Process
Chapter
4
Figure 4.9
Positioning Map of Cola Market
Well-Known Brand/Quality
• Coca-Cola/Pepsi
• Cott Cola
• President’s Choice
Lower
Price
Higher
Price
• Z Cola
• Private-label store brands
Unknown Brand/Quality
4-18
of
MARKETING
Chapter
Chapter
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