Class Notes (836,990)
Canada (510,026)
Commerce (1,910)

Chapter 9.docx

7 Pages
Unlock Document

Peter Johnson

Chapter 9: Market Segmentation, Targeting, and Positioning Figure 9-2: Market-product grid showing the types of bed pillow segments & relative sizes  Target group: people using sleeping aids; more specifically, people who have problems sleeping  Analysis states: Make pillow more comfortably (understand how people sleep and whether they have different sleeping patterns) o Heart of successful marketing – segmented down  Why segment?? – Because people are different; different people have different needs which require different products due to their needs  Try to cluster potential buyers according to common needs & their responses to marketing programs o Note: You may have ground with common needs but not necessarily the same media or purchasing habits o Thus, not just enough to cluster/segment according to common needs; but also needs to be applied to marketing program  Two basic strategies: Price or product differentiation Why Segment Markets?  Markets segments: groups that result from process of market segmentation; ideally have common needs and respond similarly to a marketing action  Product differentiation: strategy with two different but related meanings. o Broadest meaning involves firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products. o Narrower meaning involves a firm’s selling two or more products with different features targeted to different market segments.  Segmentation: Linking Needs to Actions  Using Market-Product Grids o Market-Product Grids: framework to relate segment of a market to products offered or potential marketing actions by the firm 1 Figure 9-1: Market Segmentation links market needs to an org’s marketing program  Identify Market Needs  Process of segmenting and targeting markets  Execute marketing program  Generate awareness, generate trial, and generate re-trial (aim it to build superiority and long- term brand loyalty) When to Segment Markets  One Product and Multiple Market Segments o Example: Johnson & Johnson – repositioned baby products towards adults (cater to diff. segments)  Multiple Products and Multiple Market Segments o Example: Automobiles do this  Segments of One: Mass Customization [difficult to do] o Offer customized products to large scale markets o Extension of the Build-to-Order concept that Dell uses  Alternative segmentation: one product for one company?  Multiple products and different marketing program – needs are too diverse to just cater with one product Figure 9-3: 5 Key Steps in segmenting and targeting markets link market needs of customers to org’s marketing program Before going through these steps, ask:  Is the profit potential significant enough for the cost the company will undertake? (Cost-benefit analysis)  Is it possible to effectively segment? Are their similar segments that exist with similar buyer needs? 2  Is it possible to reach these segments through marketing? [If you can’t, company cannot proceed] Step 1: Group Potential Buyers into Segments  Criteria to Use in Forming the Segments o Potential for increased profit and ROI o Similarity of needs of potential buyers within a segment o Difference of needs of buyers among segments o Feasibility of a marketing action to reach a segment o Simplicity and cost of assigning potential buyers to segments Figure 9-4: Segmentation variables & Breakdowns for Canadian Consumer Markets  Geographic, Demographic, Psychographic & Behavioral  One of the most important variables is usage [falls under behavioral dimensions]  Behavioral – benefits sought and usage rate is very important 3 Figure 9-5: Dimensions used to Segment Canadian Organizational Markets Step 2: Group Products to be sold into Groups Step 3: Develop a Market-Product Grid & Estimate Size of Markets Figure 9-6: Selecting a target market for fast-food restaurant next to an
More Less

Related notes for COMMERCE 2MA3

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.