Chapter 3:

Focusing
Marketing Strategy with
Segmentation and
Positioning

For use only with Perreault and McCarthy texts.

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Chapter 3 Objectives
When you finish this chapter, you should
1. Understand why marketing
strategy planning involves a
process of narrowing down
from broad opportunities to a
specific target market and
marketing mix.
2. Know about the different
kinds of marketing
opportunities.
3. Understand why opportunities
in international markets
should be considered.
4. Know about defining generic
markets and product-markets.
3-2

5. Know what marketing

segmentation is and how to
segment product-markets
into submarkets.
6. Know three approaches
to market-oriented strategy
planning.
7. Know dimensions that
may be useful for
segmenting markets.
8. Know what positioning
is and why it is useful.
10. Understand the
important new terms.
For use only with Perreault and McCarthy texts.
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Marketing Strategy Planning Process

Narrowing down to focused strategy with screening criteria
Customers

Company

S.
W.
O.
T.

Segmentation
& Targeting

Product

Place

Target
Market
Differentiation
& Positioning

Price

Promo

Competitors

External Market Environment

Exhibit 3-1
3-3

For use only with Perreault and McCarthy texts.

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Irwin/McGraw-Hill

Types of Opportunities
Four Basic Types of Opportunities
Present Products

New Products

Present Markets

Market
Penetration

Product
Development

New Markets

Market
Development

Diversification

Exhibit 3-2
3-4

For use only with Perreault and McCarthy texts.

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Irwin/McGraw-Hill

ler
al
Sm
r
Ea
ly
St
t
ar

3-5

ive
ti t e
pe g
m n ta
Co va
Ad

W
or
ld

Considering International Opportunities

n
e
r
T
r
e
t
t
Be

?
s
d

For use only with Perreault and McCarthy texts.

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Irwin/McGraw-Hill

Narrowing Target Markets

Selecting
target
marketing
approach

Narrowing down to
specific product-market
All
customer
needs

Some
generic
needs

One
broad
product
market

Segmenting
into possible
target markets
Homogeneous
(narrow)
product
markets

Single
target
market
approach
Multiple
target
market
approach
Combined
target
market
approach

Exhibit 3-3
3-6

For use only with Perreault and McCarthy texts.

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Generic and Product-Market Definitions

Generic
Market
Definitions

Customer
(user) needs

Exhibit 3-4
3-7

Customer
types

Geographic
area

Product type
(good and/or service)

ProductMarket
Definitions
For use only with Perreault and McCarthy texts.
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Market Segmentation
Broad product-market (or generic market) name goes here
(The bicycle-riders product-market)
Submarket 1
(Exercisers)

Submarket 2
(Off-road
adventurers)

Submarket 3
(Transportation riders)

Submarket 4
(Socializers)

Submarket 5
(Environmentalists)

Exhibit 3-5
3-8

For use only with Perreault and McCarthy texts.

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Market Segmentation
B. Product-market showing
six segments
Status dimension

Status dimension

A. Product-market showing
three segments

Dependability dimension

Dependability dimension

Exhibit 3-6
3-9

For use only with Perreault and McCarthy texts.

The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Market-Oriented Approaches
A segmenter
The
Strategy

Using single target

market approach
can aim at one
submarket with one
marketing mix

Exhibit 3-7
3-10

For use only with Perreault and McCarthy texts.

The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Market-Oriented Approaches
A segmenter
Strategy
One
Strategy
Three

Using multiple target

market approach
can aim at two or
more submarkets
with different
marketing mixes

Strategy
Two
Exhibit 3-7
3-11

For use only with Perreault and McCarthy texts.

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Irwin/McGraw-Hill

Market-Oriented Approaches
A combiner

The
Strategy

Using combined
target market
approachcan aim
at two or more
submarkets with the
same marketing mix

Exhibit 3-7
3-12

For use only with Perreault and McCarthy texts.

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Segmentation Dimensions
All
All Potential
Potential Dimensions
Dimensions

Qualifying
Qualifying Dimensions
Dimensions

Focus:

Relevant Purchase Behavior

Focus:

Relevant Customer Type

Determining
Determining Dimensions
Dimensions
(Product
(Product Type)
Type)

Focus:

Determining
Determining Dimensions
Dimensions
(Brand
(Brand Specific)
Specific)

Focus :

Specific Purchase Influence

Attraction to Brand

Exhibit 3-12
3-13

For use only with Perreault and McCarthy texts.

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Positioning of Different Bar Soaps

High
moisturizing
Tone
4

Zest

Lever 2000

Dove

Safeguard
Lux

Nondeodorant

Deodorant

Product Space

Lava

Representing Consumers Perception for

6
Different Brands of Bar Soap
Low
Exhibit 3-13
moisturizing
3-14

Dial
Lifebuoy

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Key Terms
Breakthrough Opportunities
Competitive Advantage
Differentiation
S.W.O.T. Analysis
Market Penetration
Market Development
Product Development
Diversification
Market
Generic Market
Product-Market
Market Segmentation

3-15

Segmenting
Market Segment
Single Target Approach
Multiple Target Approach
Combined Target Approach
Combiners
Segmenters
Qualifying Dimensions
Determining Dimensions
Clustering Techniques
Positioning

For use only with Perreault and McCarthy texts.

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