2. Examples of Different Types of Opportunities
• Market Penetration
– Arm & Hammer promotes new uses of its baking soda
• Market Development
– Marriott Hotels target families for weekend to rent rooms
filled by business travelers during the week
• Product Development
– Microsoft develops a new version of its Windows
operating system to appeal to the people who bought an
earlier version but now want more features
• Diversification
– Reliance entering in to Telecom
4. Market segmentation is the division of a market into
distinct groups of buyers who have distinct needs,
characteristics, or behavior and who might require
separate products or marketing mixes
Market segment is a group of consumers who
respond in a similar way to a given set of marketing
efforts
Market targeting is the process of evaluating each market
segment’s attractiveness and selecting one or more
segments to enter
5. Market positioning is the arranging for a product to
occupy a clear, distinctive, and desirable place relative
to competing products in the minds of the target
consumer
Marketing mix is the set of controllable tactical
marketing tools—product, price, place, and
promotion—that the firm blends to produce the
response it wants in the target market
10. Stages in Developing Market Segmentation Strategies
Develop a market segmentation strategy
Define overall
product market
in which
company
operates
Identify
distinguishing
characteristics
of segments or
bases for
segmentation
Describe
segments
Evaluate
approaches for
potential &
likely success
Select target
market
Determine
desired
positioning and
then develop
marketing mix
to achieve
desired position
1 2 3 4 5 6
13. Demographic Dimensions
• Important operational dimensions for
understanding market segments and
developing marketing mixes
– Much good data is available
• Important for determining size of consumer
target markets
– Is the market substantial?
• Seeing demographic trends helps identify
opportunities
– Shifts in age distribution
– Geographic growth/decline
14. Income Distribution
• Growth in real income has slowed down
• Higher income groups still have much of the
spending power
• DISPOSABLE INCOME
– Income that is left after taxes
• DISCRETIONARY INCOME
– What is left of disposable income after paying
for "necessities"
15. Characteristics and Attitudes of Middle and Lower Classes
• Middle classes
– Plan and save for the future
– Analyze alternatives
– Understand how the
world works
– Feel they have opportunities
– Willing to take risks
– Confident about decision
making
– Want long-run quality
or value
• Lower classes
– Live for the present
– Have simplistic ideas about
how things work
– Feel controlled by the world
– Want help with decision
making
– Want short-run satisfaction
Editor's Notes
Note to InstructorConsumers stand in the center. The goal is to create value for customers and build profitable customer relationships. Next comes marketing strategy—the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). It identifies the total market, then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying the customers in these segments. Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control—product, price, place, and promotion (the four Ps). To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.
Note to InstructorThis link goes to the nike.com site. Explore with the students the different segments including gender Nike Women, psychographics (sports centric including football), and age. Discussion Questions (can include the topic of positioning which is on the following slide).Specific questions for the students:How does Nike segment their market?What appears to be their most important segments?How does Nike position their products in the marketplace?
Note to InstructorIt is interesting to ask how to make the 4Ps more customer centric? This leads to a redefining of the 4Ps to the 4Cs as follows:Product—Customer solutionPrice—Customer costPlace—ConveniencePromotion—Communication
Q/A (p.150)Discuss a single standardized global strategy vs. Customized marketing strategyStandardized global strategy – can cause a firm to miss important target markets or to position products inappropriatelyCustomized marketing strategy – only to individual countries may result in a firm’s losing either potential economies of scale or opportunities for exploiting product ideas on a wider scale.
