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  • 1. 6-1
  • 2. Chapter 6 Market Segmentation, Targeting, and Positioning6-2McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 3. Chapter Goals • Related concepts: market segmentation, target marketing, and positioning • Process of market segmentation, its benefits and conditions for use • Target-market strategies • Steps in developing a positioning strategy • Methods of forecasting demand of market segments6-3McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 4. Markets MARKET SEGMENTS MARKET SEGMENTS Groups of customers with different wants, Groups of customers with different wants, buying preferences or product-use behavior buying preferences or product-use behavior TARGET MARKET TARGET MARKET A market segment for which A market segment for which the seller designs a marketing mix the seller designs a marketing mix MARKET SEGMENTATION MARKET SEGMENTATION The process of identifying and describing The process of identifying and describing potential target markets potential target markets6-4
  • 5. Market Segmentation Process of dividing the total market Process of dividing the total market for a good or service into several smaller for a good or service into several smaller internally homogeneous groups internally homogeneous groups Members of each group are Members of each group are similar with respect to the factors similar with respect to the factors that influence demand that influence demand6-5
  • 6. Process of Market Segmentation Identify wants within a market Identify wants within a market Identify characteristics Identify characteristics Determine size and satisfaction Determine size and satisfaction6-6
  • 7. Market Segmentation Conditions Measurable Measurable Segment is Segment is and and Accessible Accessible Obtainable Data Obtainable Data Large enough Large enough to be to be Profitable Profitable MICROMARKETING MICROMARKETING Treat each single customer Treat each single customer as a separate segment as a separate segment6-7
  • 8. Market Segmentation - First Cut Customer’s reason for buying Customer’s reason for buying CONSUMER CONSUMER Purchase for personal use Purchase for personal use BUSINESS BUSINESS Purchase to use in organizations, Purchase to use in organizations, to resell, or to make other products to resell, or to make other products6-8
  • 9. Segmentation Bases for Consumer Markets6-9
  • 10. Segmenting Business Markets6-10
  • 11. Target-Market Strategy Market-aggregation Market-aggregation Strategy Strategy “mass-market” “mass-market” “undifferentiated-market” “undifferentiated-market” Single Single and and Marketing Marketing Strategy Strategy Product differentiation Product differentiation “shotgun” “shotgun” Strategy Strategy6-11
  • 12. Target-Market Strategy Single-Segment Single-Segment Strategy Strategy “concentration ” “concentration ” One One Marketing Marketing Mix Mix NICHE NICHE MARKETERS MARKETERS6-12
  • 13. Target-Market Strategy Multiple-Segment Strategy Multiple Marketing Mixes6-13
  • 14. Selecting a Target Market Guidelines Compatible Compatible with company’s goals with company’s goals Match Match market opportunity market opportunity with resources with resources Profit that Profit that justifies investment justifies investment Competitors Competitors are few and/or weak are few and/or weak6-14
  • 15. Positioning Firm creating and maintaining Firm creating and maintaining in the minds of a target market a particular in the minds of a target market a particular image relative to competing products image relative to competing products THREE STEPS Select position concept Design the feature that conveys position Coordinate the marketing mix to convey position6-15
  • 16. Perceptual Map6-16
  • 17. Forecasting Market Demand MARKET SHARE Proportion of total sales of a product during a stated period in a specific market that is captured by a single firm brand x brand y our company brand z MARKET FACTOR 1) exists in the market 2)is measurable 3)is related to the demand for a product in a known way6-17
  • 18. Forecasting Market Demand MARKET POTENTIAL MARKET POTENTIAL Total product sales Total product sales of a product of a product during a period during a period in a market in a market under ideal conditions under ideal conditions6-18
  • 19. Forecasting Market Demand SALES POTENTIAL SALES POTENTIAL Portion of market potential Portion of market potential that a specific company that a specific company could expect could expect under ideal conditions under ideal conditions6-19
  • 20. Forecasting Market Demand SALES FORECAST SALES FORECAST Estimate of sales Estimate of sales For one company For one company a stated period a stated period during a period during a period in a specific market in a specific market assuming assuming a defined marketing plan a defined marketing plan6-20
  • 21. Methods of Sales Forecasting Market-Factor Market-Factor Survey of Survey of Analysis Analysis Buyer Intentions Buyer Intentions Test Past Sales Past Sales Test Marketing and and Marketing Trend Analysis Trend Analysis Sales-Force Sales-Force Executive Executive Composite Composite Judgment Judgment6-21
  • 22. Key Terms and Concepts • Market segments • Personality • Target market • Lifestyle • Market segmentation • Values • Micromarketing • Behavioral segmentation • Geographic • Market-aggregation segmentation strategy • Demographic • Product differentiation segmentation • Single-segment strategy • Psychographic • Niche marketers segmentation • Niche markets6-22McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 23. Key Terms and Concepts • Multiple-segment • Sales forecast strategy • Market-factor analysis • Position • Direct-derivation method • Positioning • Correlation analysis • Repositioning • Multiple correlation • Demand forecasting • Survey of buyer • Market share intentions • Market factor • Test marketing • Market potential • Past sales analysis • Sales potential • Trend analysis6-23McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 24. Key Terms and Concepts • Sales-force composite • Executive judgment • Delphi method6-24McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.