Procter & Gamble Chapter 7

Chapter 7

Segmentation, Targeting, and Positioning:

Building the Right Relationships with the Right Customers

Individual Assignment 

1. Read the opening vignette to the chapter. Think about the answers to the following questions:
1. What is Procter & Gamble’s strategy?
2. Is their strategy really product differentiation (as opposed to market segmentation)?
3. What does their strategy do to meet competitive threats?
4. Are there weaknesses in the P&G strategy? If so, what are they?

Share your findings with the class.

Think-Pair-Share

1. Consider the following questions, formulate an answer, pair with the student on your right, share your thoughts with one another, and respond to questions from the instructor.
1. What is market segmentation?
2. How is market segmentation different from product differentiation?
3. How is target marketing linked to market segmentation?
4. What are the four levels of market segmentation? Which offers the greatest potential for doing business over the Internet?
5. How does a national company attempt to do local marketing? Individual marketing?
6. Briefly discuss behavioral and psychographic segmentation.
7. Is gender segmentation discriminatory? Explain.
8. What are the chief means for segmenting business markets?
9. What is intermarket segmentation?
10. What are the five characteristics of successful segmentation?
11. What is the best way to evaluate a target market?
12. What are the four alternative market-coverage strategies? Which is superior? How can you tell?
13. What is product positioning?
14. How is competitive advantage obtained?
15. How does a company choose the right competitive advantage to promote?

Outside Example

The concept of positioning is extremely important in marketing. Your customers define your position—according to the text, it “is the place the product occupies in the consumer’s mind relative to competing products.” Thus, a company can influence its product positioning, but it can’t really control it.

There are many discount stores in the United States today. A couple of decades ago, discount stores were where the poor and working class families shopped. Today, virtually everyone brags about the bargain they got at Wal-Mart or Target. But are these two stores really all that similar? Think about how you feel about the two stores and what you think of when you picture them.

Typically, Wal-Mart is considered to be the place where large families on tight budgets shop. Target, on the other hand, is a place for those with much higher incomes. It even has a nickname, pronounced “Tar-zhay,” so that those who shop there feel more like they are shopping at an elite, upper class store.

1. Look at the ads for the two stores. Who do you think each is targeting? How are they segmenting their markets?
2. Go to the two stores’ Web sites (http://www.target.com/ and http://www.walmart.com/). What is the look and feel of each? Does this help you understand how they might define their target segments? What about their product selection listed on each? Does that help define their target segments?
3. Draw a perceptual positioning map for discount stores. Include Wal-Mart, Target and several others that are available in your area. What axis would you use to describe these stores’ important buying dimensions?
4. How has each store chosen to communicate its chosen position?