Beckman PowerPoint Presentation

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Chpt 4 Market Segmentation Process
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Vinyl Records

• Wax is back ! !
• Some bands release on wax first
• DJs use wax in clubs to spin a unique sound
• bands want their music played in the clubs so
  people will buy the CDs
• example of a market segment being re-created by
  the market

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• Chpt 3 discussed ROLE of mkt segmentation in
  developing a marketing strategy, and explained
  what are the bases
• In Chpt 4 we look at the PROCESS of market
  segmentation
• We will look at the reasons for, and process of
  matching product offerings to specific mkt
  segments

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• Mkt segmentation can take many forms
• you can have one whole market
• you can have many small segments with a different
  marketing plan for each segmentTHE CORE of the
  firms strategy is to make sure the products they
  want to sell (the product offerings) is what the
  people want to buy, in each market segment

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• To make sure you have the best Market Matching
  Strategy - you have to take the following factors
  into consideration

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Market Matching Strategy?
1. Company Resources 2. Differentiability 3. Stage
in Product Life Cycle 4. Competitors
Strategies 5. Size of Segment
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Single-Offer Strategy
The attempt to satisfy a large or a small market
with one product and a single marketing program.
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Single-Offer Strategy
Usually this strategy is done by a company that
does not have the money to be able to support the
production and sales of many different types of
products. Eg. VW bug
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Single-Offer Strategy
Danger - It is very easy for a competitor company
to copy your single product, and sell it at a
lower price, and take away all your customers.
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Multi-Offer Strategy
Sometimes called Differentiated Marketing
The attempt to satisfy several segments of the
market very well with specialized products and
unique marketing programs aimed at each segment.
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Multi-Offer Strategy
Levis - in the beginning - a single-offer
strategy. As jeans became more popular, different
styles shapes and also different types of
clothing, (shirts, jackets etc.) jeans - slim,
bootcut, hiphugger, bells, flare, painter pants
etc.
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Figure 4.1 Market Segmentation Decision Process
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Market Segmentation Decision Process - STAGES
Stage I Identify Market Segmentation Bases
The process starts when a company looks at the
potential customers and identifies those
customers as having particular characteristics -
these characteristics will allow the marketing
company to classify them into market
segments. The segments should be selected so
that you can group together customers who have
similar needs.
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Market Segmentation Decision Process - STAGES
Stage II Develop Relevant Profiles for each
Segment
Once the segments have been identified - should
develop a profile of the relevant customer needs
and behaviors in each segment. What does your
customer look like (profile) !! What do they like
!! What do they do !! - you need this description
to be very precise in order to make your
marketing match the needs of the customer
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Market Segmentation Decision Process - STAGES
Stage III Forecast Market Potentials
You create a Forecast of the market potential
within each segment. This is the go, no-go
stage. When you are at this stage you gather the
information on sales potential to determine
whether you can go further ahead and justify
further analysis. Forecast - what if - an
expectation of future action.
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Market Segmentation Decision Process - STAGES
Stage I V Forecast Probably Market Share
Once the market potential has been estimated, you
have to determine how much of that market you can
obtain (what market share can you
capture. Then you develop specific marketing
strategy for the segments you are trying to
develop. (text eg. PG outselling Colgate,
therefore Colgate strategy changes so it doesnt
compete directly)
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Market Segmentation Decision Process - STAGES
Stage V Select Specific Market Segments
Finally, you take all this information, and
identify specific target markets. ie. University
students who have part-time jobs, and do not have
credit cards
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Target Market Decision Analysis

• The purpose of doing this is to allow management
  (the bosses) to effectively employ marketing
  efforts
• clearly delineated target markets
• specifically identified groups of potential
  customers

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Figure 4.2 The Divide-the-Box Procedure
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Figure 4.3 Market for Airline Passenger Travel
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Figure 4.3 Market for Airline Passenger Travel
A tool (method) for outlining the scope (size
and range) of the market. Allows you to look at
all possible market segments - AND then pick
which ones you want to focus on. Once you make
this grid, you can then evaluate the aspects
(wants, needs and motivations) of each market
segment.
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Using Target Market Decision Analysis in
Assessing a Product Mix

• Product Mix
• the assortment of product lines available
• target market decision analysis can be used to
  determine the product mix being offered

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Using Target Market Decision Analysis in
Assessing a Product Mix

• Example - shoes
• 3 types of cross trainers
• 4 types of basketball shoes
• 2 types of jogging shoes
• 3 types of soccer cleats
• etc.

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Product Positioning

• Developing a marketing program in such a way that
  the product is perceived to be very different
  from competitors productseg. Wendys square
  hamburgers
• eg. Taco Bell

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Applying The Concepts
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Figure 4.6 Positioning Map of Cola Market