Fred R. David Prentice Hall Ch 8-1 Marketing variables affect success or failure of strategy implementation Market SegmentationMarket Segmentation Production PositioningProduction Positioning Marketing Issues

Fred R. David Prentice Hall Ch 8-2 Strategy Analysis & Choice Marketing Decisions requiring polices – –Use exclusive dealerships or multiple channels of distribution –Use heavy, light, or no TV advertising –Limit (or not) the share of business done with a single customer Implementing Strategies: Marketing Issues

Fred R. David Prentice Hall Ch 8-3 Strategy Analysis & Choice Marketing Decisions requiring polices – –Be a price leader or price follower –Offer a complete or limited warranty –Reward salespeople based on straight commission or combination salary/commission Implementing Strategies: Marketing Issues

Fred R. David Prentice Hall Ch 8-4 Subdividing of a market into distinct subsets of customers according to needs and buying habitsSubdividing of a market into distinct subsets of customers according to needs and buying habits Market Segmentation

Fred R. David Prentice Hall Ch 8-5 Widely used in implementing strategiesWidely used in implementing strategies Small and specialized firmsSmall and specialized firms Market Segmentation

Fred R. David Prentice Hall Ch 8-6 Market Segmentation Important Variable: 1. Market and product development, market penetration, and diversification require increased sales through new markets or products Market Segmentation

Fred R. David Prentice Hall Ch 8-7 Market Segmentation Important Variable: 2. Firm can operate with limited resources. Enables a small firm by maximizing per- unit profits and per-segment sales. Market Segmentation

Fred R. David Prentice Hall Ch 8-8 Market Segmentation Important Variable: 3. Segmentation decisions directly affect marketing mix variables: - Product, place, promotion, and price Market Segmentation

Fred R. David Prentice Hall Ch 8-9 Marketing Mix – Component Factors Service level Warranty Transportation carriers Product line Inventory levels/locations Packaging PublicitySales territoriesBrand name Payment termsSales promotionOutlet locationStyle Discounts & allowances Personal selling Distribution coverage Features LevelAdvertisingDistribution channelsQuality PricePromotionPlaceProduct

Fred R. David Prentice Hall Ch 8-10 Bases for Segmenting Markets -- – Geographic – Demographic – Psychographic – Behavioral Market Segmentation

Fred R. David Prentice Hall Ch 8-11 Geographic Basis: – Region – County Size – City or SMSA size – Density – Climate Market Segmentation

Fred R. David Prentice Hall Ch 8-12 Demographic Basis: – Age – Family Size – Family Life Cycle – Income Occupation – Education – Religion – Race Nationality Market Segmentation

Fred R. David Prentice Hall Ch 8-13 Psychographic Basis: – Social Class – Lifestyle – Personality Market Segmentation

Fred R. David Prentice Hall Ch 8-14 Behavioral Basis: – Use occasion – Benefits sought – User status – Usage rate – Loyalty status – Readiness Stage – Attitude toward product Market Segmentation

Fred R. David Prentice Hall Ch 8-15 Developing schematic representations that reflect how products or services compare to competitors’ on dimensions most important to success in the industry Product Positioning

Fred R. David Prentice Hall Ch 8-16 Product Positioning based on: – Customers wants – Customers needs Product Positioning

Fred R. David Prentice Hall Ch 8-17 Product Positioning Steps Product Positioning Steps 2. Diagram Map 1. Select Key Criteria 3.Plot competitors’ products 4. Look for niches 5. Develop Marketing Plan

Fred R. David Prentice Hall Ch 8-18 Product Positioning Map Low Convenience High Customer Loyalty Low Customer Loyalty High Convenience Firm 1 Firm 2 Firm 3 Rental Car Market

Fred R. David Prentice Hall Ch 8-19 Product Positioning Map as Strategy- Implementation Tool— – Look for vacant niche – Avoid suboptimization – Don’t serve 2 segments with same strategy – Don’t position in the middle of the map Product Positioning