1. No category

Strategic Marketing
1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control
Chapter 3
Strategic
Market
Segmentation
Strategic market segmentation (1)
* Levels and types of market
segmentation
3-3
Levels and types of market segmentation
Strategic
Segmentation
Vision
Strategic intent
Product benefits
Managerial
Segmentation
Resource allocation
Alignment
Planning
Operational
Segmentation
Marketing programs
- Advertising
- Sales
- Distribution
3-4
Best Buy segmentation strategy
*
*
*
*
*
*
*
Jill’s - “soccer moms”
Barry’s - wealthy professionals
Buzz’s - “tech enthusiasts”
Ray’s - the family man
Mr Storefront - the small business customer
Carrie’s - young, single females
Helen and Charlie’s - older couples whose
children have left home
3-5
From Mass Markets to Micro Markets
CONSUMERS
ASPIRATIONS
TV CHOICE
MAGAZINES
ADS
BRANDS
OLD
NEW
Passively receive
whatever TV
networks
broadcast
To keep up with
the crowd
Three networks
plus maybe a
PBS station
Age of the big
glossies: Time,
Life, Newsweek
Everyone hums
the Alka-Seltzer
jingle
Rise of the big,
ubiquitous brands
from Coca-Cola
to Tide
Empowered media users
control and shape content
thanks to TiVo, iPod and
Internet
To standout from the
crowd
Hundreds of channels
plus video on demand
Age of the special interest
magazine for every age
and affinity group
Talking to a group of
one, ads go ever
narrower
Niche brands, product
extensions and mass
customization mean many
product variations
Source: Anthony Bianco, “The Vanishing Mass Market”, Business Week, July 12 2004, 58-62
3-6
Strategic market segmentation (2)
* Market-driven strategy and
segmentation
* Market segmentation, value opportunities
and new market space
* Market targeting and strategic positioning
3-7
Segmentation and Market-Driven
Strategy
SEGMENTS
VALUE
OPPORTUNITIES
CAPABILITIES/
SEGMENT
MATCH
TARGET(S)
POSITIONING
STRATEGY
3-8
Strategic market segmentation (3)
* Market-driven strategy and
segmentation
* Market segmentation, value opportunities
and new market space
* Market targeting and strategic positioning
* Activities and decisions in market
segmentation
3-9
Market Segmentation Activities and
Decisions
Market to be
Segmented
Strategic
Analysis
of Segments
Finer
Segmentation
Strategies
Decide How
to Segment
Form
Segments
3-10
Strategic market segmentation (4)
* Market-driven strategy and
segmentation
* Market segmentation, value opportunities
and new market space
* Market targeting and strategic positioning
* Activities and decisions in market
segmentation
* Defining the market to be segmented
3-11
Product Variant Segmentation
Product Type Segmentation
Generic Segmentation
3-12
Strategic market segmentation (5)
* Identifying market segments
* Segmentation variables
* Characteristics of people and organizations
*
*
*
*
Consumer markets
Organizational markets
Product use situation segmentation
Buyers’ needs and preferences
* Consumer needs
* Attitudes
* Perceptions
* Purchase behavior
3-13
Segmentation Variables
Purchase
Behavior
Characteristics
of People/
Organizations
Buyers’ Needs/
Preferences
Use
Situation
3-14
Illustrative Segmentation Variables
Consumer
Markets
Age, gender, income,
family size, lifecycle
stage, geographic
location,
lifestyle
Industrial/
Organizational Markets
Type of industry, size,
geographic location,
corporate culture, stage of
development, producer/
intermediary
Use situation
Occasion, importance of
purchase, prior
experience with product,
user status
Application, purchasing
Procedure (new task,
modified rebuy, straight
rebuy
Buyers’ needs/
preferences
Brand loyalty status, brand
preference, benefits sought,
quality, proneness to make
a deal
Performance requirements,
brand preferences, desired
features, service
requirements
Purchase
behavior
Size of purchase,
frequency of purchase
Volume, frequency
of purchase
Characteristics
of people/
organizations
3-15
Strategic market segmentation (6)
* Forming market segments
* Requirements for segmentation
*
*
*
*
*
Response differences
Identifiable segments
Actionable segments
Cost/benefits
Stability
* Approaches to segment identification
* Customer group identification
* Forming groups based on response differences
3-16
Miller Brewing’s beer brand targets
* Miller genuine draft - “mainstream
sophisticates”
* Milwaukee’s Best Light - “hardworking
men”
* Pilsner Urquell - “beer afficionados”
* Miller Icehouse - for “drinking buddies”
3-17
Requirements for Segmentation
Identifiable
segments
Response
differences
Segmentation
Requirements
Stability
over time
Actionable
segments
Favorable
cost/benefit
3-18
Approaches to Segment
Identification
IDENTIFIERS
OF CUSTOMER
GROUPS

Characteristics
of People and
Organizations
CUSTOMER
RESPONSE
PROFILE

Use Situation

Buyers Needs
and Preferences

Purchase
Behavior and
Loyalty
3-19
Segment Dimensions for Hotel Lodging Services
3-20
Illustrative Example: Gasoline Buyers
Road
Warriors
True
Blues
Generation
F3 (Fuel,
Food & Fast)
Homebodies
Price
Shoppers
Higher-income, middle-aged men, drive 2550000 miles a year… buy premium with a
credit card … purchase sandwiches and drinks
from the convenience store… will sometimes
use carwash
Men and women with moderate to
high incomes, loyal to a brand and
sometimes a particular station …
frequently buy premium, pay in cash
Upwardly mobile men and women half under 25 years of age constantly on the go … drive a lot
snack heavily from the convenience store
Usually housewives who shuttle
children around during the day and
use whatever gas station is based on
town or on route of travel
Not loyal to brand or station and
rarely buy premium … frequently on
tight budgets.
16% of
buyers
16% of
buyers
27% of
buyers
21% of
buyers
20% of
buyers
3-21
Illustrative Consumer Perception
Map
Expensive
GROUP
II
• Brand E
• Brand A
• Brand B
Low
Quality
• Brand D
GROUP
V
GROUP
I
GROUP
III
High
Quality
• Brand C
GROUP
IV
Inexpensive
3-22
Strategic market segmentation (7)
* Finer segmentation strategies
* Logic
* Customized offerings
* Diverse customer base
* Close customer relationships
* Finer segmentation strategies
* Micro-segmentation
* Mass customization
* Variety-seeking strategy
3-23
Strategic market segmentation (8)
* Selecting the segmentation strategy
* Deciding how to segment
* Strategic analysis of market segments
*
*
*
*
*
Customer analysis
Competitor analysis
Positioning analysis
Estimating segment attractiveness
Segmentation “fit” and implementation
3-24
Strategic Analysis of Market Segments
Customer
Analysis
Financial and
Market
Attractiveness
Competitor
Analysis
Positioning
Analysis
3-25
Segmentation “Fit” for Implementation
Segment Attractiveness
and Internal Compatibility
Internal Compatibility
High
High
Market Segment
Attractiveness
Low
Low
Attractive segments
that match with
company
capabilities
Attractive segments
but with poor match
with company
capabilities
Unattractive segments
but with match to
company
capabilities
Unattractive segments
that do not match with
company capabilities
3-26