This document discusses market segmentation and the process of matching product offerings to specific market segments. It covers the stages of market segmentation decision process including identifying segmentation bases, developing profiles for each segment, forecasting market potentials, and selecting target markets. Market segmentation allows companies to develop specialized products and marketing programs for each segment. The document also discusses single-offer and multi-offer strategies and uses examples like Levi's jeans to illustrate how companies' strategies have evolved from single to multi-offer over time.

1. Chapter 4
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2. Chapter 4
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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3. Chapter 4
• 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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4. Chapter 4
• 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 segment
THE CORE of the firm’s 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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5. Chapter 4
• To make sure you have the best
Market Matching Strategy - you have
to take the following factors into
consideration
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6. Chapter 4
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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7. Chapter 4
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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8. Chapter 4
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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9. Chapter 4
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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10. Chapter 4
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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11. Chapter 4
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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12. Chapter 4 Figure 4.1 Market Segmentation Decision Process
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13. Chapter 4 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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14. Chapter 4 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 Page 64
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15. Chapter 4 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.
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Forecast - “what if” - an expectation of future action.
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16. Chapter 4 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. P&G outselling Colgate, therefore Colgate strategy
changes so it doesn’t compete directly)
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17. Chapter 4 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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18. Chapter 4
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 Page 67
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19. Chapter 4
Figure 4.2 The Divide-the-Box Procedure
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20. Chapter 4 Figure 4.3 Market for Airline Passenger Travel
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21. Chapter 4 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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22. Chapter 4
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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23. Chapter 4
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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24. Chapter 4
Product Positioning
• Developing a marketing program in
such a way that the product is
perceived to be very different from
competitors products
eg. Wendy’s square hamburgers
eg. Taco Bell
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25. Chapter 4
Applying The Concepts
Page 70 - 71
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26. Chapter 4
Figure 4.6 Positioning Map of Cola Market
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