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Chap 007 P
Chap 007 P
Chapter 7
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McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
After studying this chapter you
should be able to:
• Define and explain market segmentation,
target markets, and product differentiation and
positioning.
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After studying this chapter you
should be able to:
• Describe the issues involved in product
and brand positioning.
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Market Segmentation
• Market
Segmentation: • Intermarket
– Divides a market into Segments:
subsets of – Well-defined, similar
prospective clusters of customers
customers who across national
behave in the same boundaries.
way, have similar
wants, or have similar
characteristics that
relate to purchase.
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Target Markets
Targeting:
Selecting which segments in a market
are appropriate to focus on and
designing the means of reaching them.
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Product Differentiation
• Product
Differentiation:
– Exists when a firm’s
offerings differ or are
perceived to differ from
those of competing
firms on any attribute,
including price.
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From Mass Marketing to Mass
Customization
• Mass Customization:
– Complex manufactured
products made to order.
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Criteria for Effective
Segmentation
Five Criteria:
1. Measurability
2. Accessibility
3. Substantialness
4. Durability
5. Differential Responsiveness
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Stages in Developing Market
Segmentation Strategies
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Bases for Segmentation
• Demographics
• Geographics
• Psychographics &
Lifestyles
• Benefit Segmentation
• Economic
Segmentation
• International
Segmentation
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Combining Bases of Market
Segmentation
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Segmentation Strategies
Undifferentiated Strategy
Differentiated Strategy
Concentrated Strategy
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Countersegmentation Strategy
• Countersegmentation:
– An alternative strategy to traditional segmentation
approaches.
• Combines market segments
• Consumers accept lower price over variety
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Factors Influencing
Segmentation Strategy
• Size and type of the market
• Competitive factors
• Product-related factors:
1. Stage in the product life cycle.
2. Degree to which the product may be varied
or modified.
• Firm’s size and financial position
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Estimating Segment Potentials
1. Set time period of interest.
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Estimating Segment Potentials
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Developing Forecasts
• Qualitative
• Quantitative
Procedures:
Methods:
– Survey of Buyers’
Intentions – Trend Analysis
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Firm and Market Potentials and
Forecasts
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Targeting Market Segments
• To select target segments, the firm
must consider:
– The segment’s potential sales volume and
profits.
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Positioning
Positioning:
Designing a marketing program, including
the product mix, that is consistent with how
the company wants its products or
services to be perceived.
Repositioning:
When a firm wants to shift consumer
opinions about an existing brand.
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Perceptual Maps
• Perceptual Maps:
– Spatial representations of consumer
perceptions of products or brands, are often
used to evaluate brand positions in a market.
• Dr Pepper
• Orange Crush
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Micromarketing
Micromarketing:
Combines census and
Demographic data to identify
clusters of households
that share similar
consumption patterns.
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Micromarketing
• Enhances the effectiveness of marketing efforts
by:
– Identifying potential markets for direct selling through
mail and telemarketing campaigns.
– Advertising to Children
– Harmful Products
– Privacy Issues
– Product Proliferation
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