Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

CHAPTER 4
FOCUSING MARKETING STRATEGY WITH SEGMENTATION
AND POSITIONING

When you finish this chapter, you should be able to:

1. Define and describe generic markets and product-markets.

2. Know what market segmentation is and how to segment product-

markets into submarkets.

3. Know three approaches to market-oriented strategy planning.

4. Know dimensions that may be useful for segmenting markets.

5. Recognize how some computer-aided methods are used in

segmenting.

6. Know what positioning is and why it is useful.

7. Understand the important new terms (shown below).

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

market combined target market

generic market approach

product-market combiners

market segmentation segmenters

segmenting qualifying dimensions

market segment determining dimensions

single target market approach clustering techniques

multiple target market customer relationship management

approach (CRM)

positioning

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

Outline of Chapter 4: FOCUSING MARKETING STRATEGY WITH

SEGMENTATION AND POSITIONING

SEARCH FOR OPPORTUNITIES CAN BEGIN BY

UNDERSTANDING MARKETS

• Strategy planning is a narrowing-down process

(Exhibit 4-1) "Focusing Marketing Strategy with

Segmentation and Positioning”

• What is a company's market?

MARKET--a group of potential customers with similar needs who

are willing to exchange something of value with sellers offering
various goods and/or services--that is, ways of satisfying those
needs.

• Don't just focus on the product

• From generic markets to product-markets

GENERIC MARKET--a market with broadly similar needs--and

sellers offering various--often diverse--ways of satisfying those
needs.

PRODUCT-MARKET--a market with very similar needs--and

sellers offering various close substitute ways of satisfying those
needs.

• Broaden market definitions to find opportunities

NAMING PRODUCT-MARKETS AND GENERIC MARKETS

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

• Product type should meet customer needs

• Product-market boundaries provide focus

• No product type in generic market names

(Exhibit 4-2) "Relationship between Generic and Product-

Market Definitions"

MARKET SEGMENTATION DEFINES POSSIBLE TARGET

MARKETS

"How Readings Relate to Market Segmentation"

• Market segmentation is a two-step process

MARKET SEGMENTATION--a two-step process of: (1) naming

broad product-markets and (2) segmenting these broad product-
markets in order to select target markets and develop suitable
marketing mixes.

• Naming broad product-markets is disaggregating

(Exhibit 4-3) "Narrowing Down to Target Markets"

• Market grid is a visual aid to market segmentation

(Exhibit 4-4) "A Market Grid Diagram with Submarkets"

• Segmenting is an aggregating process

SEGMENTING--an aggregating process that clusters people with

similar needs into a "market segment."

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

MARKET SEGMENT--a (relatively) homogeneous group of

customers who will respond to a marketing mix in a similar way.

(Exhibit 4-5) "Every Individual Has His or Her Own Unique

Position in a Market--Those with Similar Positions Can Be
Aggregated into Potential Target Markets: “A. Product-
market showing three segments," and "B. Product-market
showing six segments"

• How far should the aggregating go?

• Criteria for segmenting a broad product-market

"Criteria for Segmenting"

• Target marketers aim at specific targets

SINGLE TARGET MARKET APPROACH--segmenting the

market and picking one of the homogeneous segments as the firm's
target market.

MULTIPLE TARGET MARKET APPROACH--segmenting the

market and choosing two or more segments, then treating each as a
separate target market needing a different marketing mix.

COMBINED TARGET MARKET APPROACH--combining two

or more submarkets segments into one larger target market as a
basis for one strategy.

• Combiners try to satisfy "pretty well"

"Three Ways to Develop Market-Oriented Strategies"

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

COMBINERS--try to increase the size of their target markets by

combining two or more segments.

(Exhibit 4-6) "Segmenters and Combiners Aim at Specific

Target Markets"

• Segmenters try to satisfy "very well"

SEGMENTERS--aim at one or more homogeneous segments and

try to develop a different marketing mix for each segment.

"There May Be Different Demand Curves in Different Market

Segments"

• Segmenting may produce bigger sales

• Should you segment or combine?

• Profit is the balancing point

WHAT DIMENSIONS ARE USED TO SEGMENT MARKETS?

• Segmenting dimensions guide marketing mix planning

• Many segmenting dimensions may be considered

"Examples of Possible Segmenting Dimensions for Consumer

Markets"

"Examples of Possible Segmenting Dimensions for Business

Markets"

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

• What are the qualifying and determining dimensions?

QUALIFYING DIMENSIONS--the dimensions that are relevant to

including a customer type in a product-market.

DETERMINING DIMENSIONS--the dimensions that actually

affect the customer's purchase of a specific product or brand in a
product-market.

(Exhibit 4-7) "Relation of Potential Target Market

Dimensions to Marketing Strategy Decision Areas"

(Exhibit 4-8) "Possible Segmenting Dimensions and Typical

Breakdowns for Consumer Markets"

• Determining dimensions may be very specific

"Segmenting Dimensions"

(Exhibit 4-9) "Possible Segmenting Dimensions for

Business/Organizational Markets"

• Qualifying dimensions are important too

(Exhibit 4-10) "Finding the Relevant Segmenting

Dimensions"

• Different dimensions needed for different submarkets

• International marketing requires even more segmenting

• Smart segmenters win in international markets

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

• Ethical issues in selecting segmenting dimensions

MORE SOPHISTICATED TECHNIQUES MAY HELP IN

SEGMENTING

• Clustering usually requires a computer

CLUSTERING TECHNIQUES--approaches used to try to find

similar patterns within sets of data.

"Toothpaste Market Segment Description"

• Customer database can focus the effort

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)--a

method where the seller fine-tunes the marketing effort with
information from a detailed customer database.

"Customer Relationship Management (CRM)"

• Targeting a segment of one

DIFFERENTIATION AND POSITIONING TAKE THE CUSTOMER

POINT OF VIEW

• Differentiate the marketing mix--to serve customers better

• Positioning is based on customers' views

POSITIONING--an approach that refers to how customers think

about proposed and/or present brands in a market.
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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

(Exhibit 4-11) "'Product Space' Representing Consumers'

Perceptions for Different Brands of Bar Soap"

"Positioning and Differentiation"

• Each segment may have its own preferences

-Combining versus segmenting

• Positioning as part of broader analysis

• Sometimes repositioning is needed

• Positioning statement provides direction for marketing strategy

NOTES ON THE INTERACTIVE EXERCISE

Overview of Interactive Exercise on Product-Market Definitions

The purpose of this exercise is to help students see the product-market definitions behind
advertised products.. Print ads are provided for three different products; students are challenged
to identify the correct components of the product-market definition for each one.

Concept Review

A market is a group of potential customers with similar needs who are willing to exchange
something of value with sellers offering various goods and/or services. As pointed out in the text,
marketers should not just focus on products that they sell in defining the market. They need to be
able to distinguish different levels of the market. Doing so will help to identify opportunities and
potential threats.

A generic market is a market with broadly similar needs and sellers offering various ways of
satisfying those needs. Defining the market broadly can help the marketer to uncover some
potential new opportunities. The marketer can then narrow down to specific product-markets.

A product-market is a market with very similar needs and sellers offering various close substitute
ways of satisfying those needs. A complete product-market definition includes four parts:
• Product type--the type of good and/or service offered.
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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

• Customer need--refers to the need(s) of the customer (user) that are being met by the
product.
• Customer type--identifies who specifically is using the product.
• Geographic area--identifies where the market is located.

Using the Exercise

Initial Screen
1. This screen introduces the product-market definition exercise.
A. The professor can begin the exercise by clicking on one of the ads.
B. The exercise will automatically transition to the next screen.

Next Screen
2. The first ad chosen is shown in larger size. An enlargement icon appears in the bottom of
the screen so that the ad can be made bigger.
A. The professor reads the key elements of the ad copy to the class.
B. The professor then clicks the advance button at the bottom of the screen to
advance to the next screen.

Next Screen
3. On the left-hand side, there are boxes containing the four main elements of the product-
market definition. On the right-hand side, there are four possibilities for each of the elements
of the product-market definition.

A. For each element of the product-market definition, the professor asks the class
which possibility on the right-hand side best fits the advertised product. The
professor then clicks on the box containing the choice, and holding down the left-
hand mouse button, drags the box over to the corresponding element of the
product-market definition. When the choice is correctly positioned on top of the
element of the product-market definition, the professor releases the mouse button.
B. If the choice is incorrect, a “negative” sound will be heard and the choice will
return to the right-hand side of the screen. If the choice is correct, a “positive”
sound will be heard. For details related to right and wrong answers, refer to the
ANSWERS AND EXPLANATION section below.
C. The selection process is repeated until all elements of the product-market
definition have been identified.
D. At this point, it would be fruitful for the professor to reinforce the difference
between a product-market definition and a generic market definition (the generic
market definition has no product type).
E. It would also be helpful if the professor asked the students to brainstorm examples
of opportunities that might be available if the marketer developed: (1) a narrower
product-market definition; or (2) a broader generic market definition.
F. This is also a good point for reinforcement of the types of market opportunities
that are discussed in Chapter 2: market penetration; market development; product
development; or diversification. The students can brainstorm how these types of
opportunities are linked to the market definitions used.

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

G. Clicking the “NEXT” button will transition to the next screen, where the
professor can select the next advertised product to discuss.
H. The professor repeats the selection process described in step 2 until each of the
three advertised products has been explored.

Final Screen
4. The final screen matches each advertised product to the elements of its product-market
definition. The professor clicks the “X” icon in the upper right corner of the screen to end
the exercise.

Answers and Explanations

PRODUCT 1: SMARTPAD
PRODUCT TYPE CORRECT ANSWER: Electronic Notepad
The product’s advertisement clearly illustrates the product type is an electronic notepad.
Although the product is a companion to a personal digital assistant (PDA), it is not a PDA
itself, in that it is not a stand-alone product. Further, it does not perform the functions of a
calculator or provide Internet access. A PDA might be able to do these things, but not the
SmartPad.

CUSTOMER TYPE CORRECT ANSWER: Working Professional Adults

These are the consumers who are most likely to be the targets for the SmartPad. One could
make the argument that elementary school children, senior citizens, or “blue collar workers”
could be consumers or users of the SmartPad. However, the main target audience is working
professional adults.

CUSTOMER NEED CORRECT ANSWER: Electronic Notetaking

This product provides a solution to a common problem plaguing PDA users: how to take
notes and enter text or sketches in an efficient way. It does not, by itself, meet the needs of
consumers for remote Internet access, multimedia production, or digital photography.

GEOGRAPHIC AREA CORRECT ANSWER: Industrialized Nations

Although the SmartPad would probably have some users in agricultural areas or less-
developed countries, its main market would be in industrialized nations, because more PDA
users would be found there. What about fast-growing countries? As discussed in Chapter 5,
many fast-growing countries are less-developed nations, and so they would not fit the
product-market definition as suitably as industrialized nations.

PRODUCT 2: RESCUE
PRODUCT TYPE CORRECT ANSWER: Fuel Additive
The product’s label clearly states that the product is a fuel additive. It has nothing to do with
the windshield washer, the tires, or the engine lubrication.

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

CUSTOMER TYPE CORRECT ANSWER: Automobile Owners

Middle school children are not the primary consumers of this product, because they do not
drive or make decisions about automotive products of this type. They could be indirect
beneficiaries if they were passengers in a car in which the product was used, but they are not
the main target audience. Professional truck drivers typically use diesel fuel, not gasoline, so
the product would not be marketed to them. Auto racing teams would have no use for the
product. Everyday automobile owners are the intended audience.

CUSTOMER NEED CORRECT ANSWER: Safety

This product’s advertisement indicates that this product provides safety against running out
of fuel. It does not enhance engine performance, provide better fuel economy, or reduce
exhaust emissions.

GEOGRAPHIC AREA CORRECT ANSWER: Industrialized Nations

Like the previous example, this product would probably have some users in agricultural
areas, less-developed countries, or fast-growing countries. Its main market would be in
industrialized nations, because more car owners would be found there, along with more
sophisticated road and highway infrastructure.

PRODUCT 3: FLASH PLAYER

PRODUCT TYPE CORRECT ANSWER: Internet Plug-In
The product is a plug-in device usually downloaded for free from its producer’s Internet site.
It is not an Internet browser or music download service, although it may work in conjunction
with them. It is not a word processor.

CUSTOMER TYPE CORRECT ANSWER: Internet Users

Because the product could be useful to anyone who accesses the Internet, a broad customer
type definition is needed here. Senior citizens, “blue collar” workers, and single parents also
use the Internet, but any one of those groups alone is not large enough to capture the breadth
of the customer type.

CUSTOMER NEED CORRECT ANSWER: Web-Based Media Playback

The main need satisfied by this product for most users is that the product makes Web
browsers more functional. The Flash Player is not a production tool for multimedia or
computer-aided design, and it does not provide e-mail capability.

GEOGRAPHIC AREA CORRECT ANSWER: World

The Flash Player is a plug-in that would be useful to Internet users the world over, not simply
in one country.

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

LISTING OF YOUTUBE POWERPOINTS

The following YouTube PowerPoints might be interesting additions to your coverage of this
chapter:

13 Case Study: Anthon Berg's "The Generous Store"

18 Ad: Mountain Dew
19 Viral Video: Cartier
30 Guest Speaker: Steve Jobs
32 Ad: Toyota Venza
42 Ad: Lamptan
44 Sales Promotion: Nissan Patrol in UAE
45 Viral Video: Coca Cola
48 Ad: Honda Odyssey
49 Viral Video: Toyota Swagger Wagon
50 Ad: Diesel Sneakers
58 Sales Promotion: Toys R Us App
62 Ad: Friskies
65 Viral Video: Old Spice
66 Viral Video: State Farm
68 Ad: Tropicana
72 Guest Speaker: Thirawit Leetavorn
74 Ad: Coca-Cola
77 Viral Video: Coca Cola
79 Viral Video: Charlotte Pipe
81 Viral Video: Method
87 Ad: Chevy Volt

IDEAS ON USING COLOR ADS WITH CHAPTER 4

Color Ad 1
(Sportlife) Bigger gum.
The larger size pieces of Sportlife gum provide a point of differentiation from its
competition.

Color Ad 5
(HomeAgain) Please help protect me with HomeAgain. HomeAgain has reunited over 400,000
pets with their families.
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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

Pet owners can be segmented by how they perceive their pet relative to their families.
Those owners who view their pet as a member of the family are likely to take extra precautions
to ensure that a lost one can be quickly recovered.

Color Ad 11
(3M Mobile Privacy Film) User discretion advised. Because you never know who’s watching.
3M originally developed privacy films for laptops. Then it saw an opportunity in another
product-market – cell phones.

Color Ad 13
(Continental Airlines) Why settle for “good as new” when you can have new? Proud to fly the
newest jet fleet.
Air travel is one of the most competitive product-markets in the world so differentiation
is very important.

Color Ad 15
(EcoHangers) Makes other media look like waste.
EcoHangers offer a medium that can be highly targeted to a particular geography, gender,
retailer, or ethnicity.

Color Ad 20
(Clorox Disinfecting Wipes) Add this to your school supplies. Donate Clorox Disinfecting
Wipes to your child's school and help keep classrooms healthier.
Initially the Clorox brand name became well known as laundry bleach, but now the brand
is used with other products related to the broader product-market for general cleaning needs. In
this case, its Disinfecting Wipes are not only used in family households, but by many types of
businesses and government organizations (like schools).

Color Ad 23
(Massey Ferguson) A better baler. A better value. No matter how you cut it.
Massey Ferguson recognizes that its target market, small and mid-sized farmers, might
have to finance the purchase of a new baler – and would appreciate the five year 0% financing it
offers.

Color Ad 26
(Valpak) Sometimes the best way to think outside the envelope is to put your clients inside one.
Valpak segments customers geographically.

Color Ad 29
(Tampa Cargo) Shows tractor-trailer flying through air.
The high costs of providing air freight services has led some companies in this business
to target specific markets. Tampa Cargo targets companies who are shipping air freight between
the United States and South America.

Color Ad 33

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

(Kenneth Cole Productions) We all walk in different shoes. Theo Kogan. Singer, actor,
entrepreneur, and feminist.
Kenneth Cole wants to position its shoes in target customers’ minds as different.

Color Ad 36
(Volkswagen Touareg) Highest ground clearance of its class.
Volkswagen may want to segment the market by geography. Customers located in snowy
climates can relate to the value of higher ground clearance.

Color Ad 37
(Noodles & Company Chain of Restaurants) You know you’re out of balance when you think a
balanced meal is an energy bar and a latte.
Noodles & Company developed a series of advertisements with the tagline, “You know
you’re out of balance when—.” The ads position Noodles & Company’s fare as healthier and
better balanced than the food at other restaurants.

Color Ad 43
(Olympus Optical Zoom Binoculars) Shows man with hedgehog.
What do you think would be the qualifying and determining dimensions for someone
buying this product?

Color Ad 45
(Jack in the Box) You slept through half of chemistry instead of all of it. Reward yourself with
sirloin! Sirloin Steak 'n' Cheddar Ciabatta.
High school and college students are often a target market for quick-serve restaurants like
Jack in the Box.

Color Ad 50
(United Economy Plus) Anyone for more legroom?
Many consumers see all airlines as offering the same benefits. So United wants to tell
customers that its legroom differentiates its service from that of other airlines.

Color Ad 67
(Fellowes Shredders) Of all the ways to fix shredder jams, only one makes sense. Introducing
100% Jam Proof Shredders.
Fellowes uses its tagline and logo to reinforce its desired positioning as “The World’s
Toughest Shredders.”

Color Ad 78
(Zipcar) You’d get there faster in a Zipcar.
Zipcar wants to position its brand in the consumer’s mind as both a fun and a practical
alternative.

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

PERSPECTIVES ON TEACHING CHAPTER 4--FOCUSING MARKETING

STRATEGY WITH SEGMENTATION AND POSITIONING

Starting with last edition, we have moved the discussion of segmentation and positioning (now
Chapter 4) so that it follows the discussion of the external market environment (now Chapter 3).
Of course, if you prefer our previous approach, we’ve written the chapters so that you can have
students read Chapter 4 before Chapter 3. However, with this new organization, the discussion of
segmentation in Chapter 4 lays out the broad logic for how to identify and analyze target
customers and that leads directly into the following chapters that go into more detail concerning
customers and their buying behavior.

Once the general framework for marketing strategy planning has been introduced (in Exhibit 2-
9), students have a clear understanding of the role of segmentation and positioning in helping to
bring focus to marketing strategy planning. Analyzing and identifying potential target market
opportunities is one of the most important--and also one of the most challenging--marketing jobs.
In the same vein, one of the teaching challenges in this area is to ensure that students understand
that this involves a "balancing act." On the one hand, marketing managers should start with a
view of the needs of potential customers in a broad product-market--so that they don't fall into
the trap of thinking about opportunities only in terms of the physical product that the company
currently produces (i.e., the type of "marketing myopia" that Ted Levitt so skillfully described
and illustrated in his classic Harvard Business Review article). On the other hand, it is not
adequate to just develop a vision of the broad, generic market in which the firm wishes to
compete. Rather, once the broad product-market or generic market has been identified and
analyzed, it is important to narrow down to more specific target market opportunities that the
firm can tackle--and tackle in such a way as to develop a competitive advantage. A basic
objective of this chapter is to introduce students to these ideas and, importantly, give them
workable guidelines and frameworks so that they can do it themselves. Thus, the chapter does
not simply describe the idea of market segmentation; it develops the concept in sufficient depth
so that the student will be able to apply the idea in subsequent chapters and later for some
company.

Before beginning discussion of the material in this chapter, it is useful to point out to students
that it is the first in a series of chapters--up to and including Chapter 7--that deal with the "target
market" aspect of marketing strategy planning. After that, the focus shifts to the 4Ps decision
areas that a marketing manager works with in meeting the needs of the target market. You may
even want to point out to students the "chicken and egg" question that arises here from a teaching
perspective. Subsequent chapters provide substantially more information about dimensions of
customers that can be used to facilitate market segmentation thinking. For example, Chapter 4
introduces the idea of segmenting customers based on needs and other segmenting dimensions,
and then Chapters 5-6 (on the behavior of final consumers and business and organizational
customers) develop in more detail the different types of needs and segmenting dimensions that
may be relevant. In the same vein, Chapter 4 introduces the idea that the size of a target market
and the extent to which different product market segments can be combined into a single target
market are important factors in accessing an opportunity. Then, Chapters 5-6 develop the
specifics of these ideas in more detail. Thus, it is useful to emphasize to students that subsequent
classes and chapters will put more flesh on the skeleton that they learn about in this chapter.
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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

In the same vein, the discussions of positioning and differentiation later in the chapter emphasize
the link between target market selection and what the firm does to satisfy that target market and
provide a competitive advantage for itself.

The new chapter opener case focuses on LEGO. One reason that LEGO is a good example to
introduce segmentation and positioning is that most students know the company’s name and that
it has been successful in developing products that target specific groups. A useful way to wrap
up a class discussion of segmentation and positioning is to ask students to look at the list of key
terms for the chapter and explain how each concept relates to the LEGO case.

The new highlighted teaching case for this chapter focuses on Target. This is the first extended
treatment of “big data”—with a look at how Target stores use big data to predict what customers
will want to buy.

A new Internet exercise profiles different segments in the mobile phone market and a new Ethics
Question addresses issues around consumer privacy and gaming apps.

See the Hallmark example in section “Search for Opportunities Can Begin by Understanding
Markets.” Instead of limiting itself to the “greeting card” market, Hallmark aims at a much
broader “personal-expression” market.

See the Canon/GoPro example in section “Naming Product-Markets and Generic Markets.” The
boundaries of a market apply not just to geographic areas served but also to decisions about
customer needs and product and customer types.

Another important example discusses Herman Miller and its targeting of top executives (an
upscale segment). See section “Market Segmentation Defines Possible Target Markets” for the
HM, Tide, and Kaepa examples. Part of the logic for introducing the HM example at this point is
to prompt students to think more explicitly about the fact that these ideas apply in business
markets as well as consumer markets. The Aeron chair became so popular, it was a status symbol
for high-tech managers. In addition, note that the Herman Miller website is excellent and reflects
the careful segmentation thinking that goes into developing and marketing its product lines in
general.

The Tide example reminds students that even within the Tide brand, there are different formulas
for different targets.

The Kaepa example is really good at showing how a firm can use target marketing to develop a
competitive advantage, even when other firms are strong or well established with less specific
targets. A good question to ask is whether firms like Nike and Adidas could have pursued this
opportunity. Students will see that it is possible to pursue different target markets at the same
time with different marketing mixes, but that it doesn't just happen automatically. Some
marketing manager has to consciously plan the strategy.

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Chapter 04 - Focusing Marketing Strategy with Segmentation and Positioning

See the Ford in Vietnam example in section “What Dimensions Are Used to Segment Markets?”
It is a good example to use in a discussion of qualifying and determining dimensions.

See Mountain Dew’s positioning statement toward the end of section “Differentiation and
Positioning Take the Customer Point of View.” Again, Mountain Dew is a popular product with
college students so it’s easier to grab their attention.

In recent years, there has been quite a lot of debate in the popular marketing press and also
among academics about the possibility, or desirability, of "global" marketing strategies. This
topic can provide some useful class discussion. In particular, you may want to remind students
that the frameworks offered in Chapter 4 with respect to market segmentation are directly
relevant for thinking about that issue. Some firms can effectively "aggregate" different segments
(including segments in different parts of the world) into a common target market because their
needs and likely responses to a marketing mix are similar. Perhaps only the details of how the
strategy is implemented (for example, the language of an ad, or the types of intermediaries
involved in the channel of distribution) may differ. On the other hand, in most cases there will
need to be more significant modification of the strategy for different international markets. A
number of firms that uncritically jumped into "global" strategies have learned this lesson the hard
way--after experiencing really poor results. Students who have studied the concepts in Essentials
of Marketing should not find this point surprising, but it is nevertheless worth reemphasizing.
Whether a firm's target customers are domestic or foreign, different types of opportunities may
require quite different marketing mixes. Hopefully, the marketing manager can develop an
overall marketing program that builds on and is consistent with the strengths of individual
strategies. However, sloppy thinking applied to planning for international markets can lead to
some very costly mistakes.

In the last couple of editions we have modified the discussion of database marketing to introduce
the new key term, customer relationship management (CRM), which is now being generically
applied to this type of approach. The text does not go into a lot of detail about CRM at this point,
although many topics relevant to CRM are developed throughout. However, instructors should
be warned about the “sizzle” and attention that CRM is getting in the popular press. What is
possible is often not yet being achieved. Part of the reason is that many IT consulting firms are
selling their “canned” solutions for CRM, but often the canned solutions fall far short of what a
firm needs. So, the promise of CRM and the reality of how it is implemented are just now
coming together. Marketers (not just IT people) will need to be directly involved in determining
what information is to be stored, how it is to be organized and used, and what decisions are made
with it. This is a topic that is discussed in more detail in Chapter 7. See a good CRM example in
section, “More Sophisticated Techniques May Help in Segmenting.”

Multimedia Lecture Support Package to Accompany Essentials of Marketing

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