MKT305 Focusing Marketing Strategy with Segmentatio n and Positioning Chapter 4 Chapter 4 John Weiss Learning Objectives By the end of this course chapter you will Know what market segmentation is and how to segment product markets into submarkets Know three approaches to market oriented strategy planning Understand the primary dimensions that may be useful for segmenting markets Compare product differentiation with product positioning is and why this is useful Demand Markets Demand is driving by Needs Wants and can be Full demand Negative demand Latent demand Irregular demand Falling demand A Market is a group of Individuals or Organizations who have The Desire to buy The Ability to buy The Willingness to buy Basic Market Types Generic Market customers have broadly similar needs Ex Entertainment Product Market defines opportunities by Product Type Customer User Needs Customer Type Geographic Area Market Segmentation Defines the Possible Target Markets Broad product market or generic market name goes here The bicycle riders product market Submarket 1 Exercisers Submarket 2 Off road adventurers Submarket 3 Commuters Submarket 4 Socializers Submarket 5 Environmentalists A Good Market The Segment Criteria Homogeneous similar within Heterogeneous different between Substantial Operational Think Both Market Potential AND Sales Potential Market Potential Sales of the product to ALL possible customers Sales Potential Sales to this market from our firm Market Potential is often Understated poor market awareness for new products Sales Potential is often Overstated unrealistic expectations of the firm Segmenters and Combiners Aim at Specific Target Markets A segmenter develops a different marketing mix for each segment Single target market approach The strategy Multiple target market approach Strategy two Strategy three Strategy one A combiner aims at two or more submarkets with the same marketing mix The Strategy Possible Segmenting Dimensions Variables Behavioral psychographics lifestyle purchase situation brand familiarity and many more Geographic customer location Demographic Easily measured dimensions such as age income family life cycle and many more Qualifying and determinin g dimensions Qualifying dimensions are those relevant to including a customer type 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 Thought Starter in the Textbook As noted in the text when the Chicago South Loop Hotel offered free parking to encourage customers to choose its hotel over others it was relying on dimension to attract customers A Determining B Product C Segment D Qualifying Ethical Concerns in Selecting Segmentation Dimensions CRM is a Focus for Many Markete rs Today Customer Relationship Management CRM is used to Fine tune marketing with information gathered about a firm s customers Relies on data base stores for segmentation efforts Analytic software tools are at the core of CRM The goal is to deliver a different marketing mix to different segments as needed Differentiation vs Positioning Differentiation means making changes to the marketing mix to meet the needs of a target market Product Price Place Promotion Positioning refers to how a customer thinks about a brand Positioning statements Perceptual maps