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CHAPTER
4
Opportunity Analysis, Market Segmentation, and Market Targeting
The development and implementation of marketing strategy are complicated and challenging tasks. At its pinnacle, marketing strategy involves the selection of markets and the development of programs to reach these markets. This process is carried out in a manner that simultaneously benefits both the markets selected (satisfying the needs or wants of buyers) and the organization (typically in dollar-profit terms). Within this framework, necessary first tasks are opportunity analysis, market segmentation, and market targeting. This chapter describes analytical concepts and tools that marketing managers find useful in performing opportunity analyses, segmenting markets, selecting market targets, and estimating market and sales potential.
■ OPPORTUNITY ANALYSIS
Opportunity analysis consists of three interrelated activities: • Opportunity identification • Opportunity-organization matching • Opportunity evaluation Opportunities arise from identifying new types of buyers, uncovering unsatisfied needs of buyers, or creating new ways or means for satisfying buyer needs. Opportunity analysis focuses on finding markets that an organization can profitably serve. The success of Reebok International, Ltd. illustrates a disciplined approach to opportunity identification. In 1981, Reebok had sales of $1.5 million and was known primarily for its high-quality custom running shoes. Consumer interest in running had plateaued, however, and new opportunities had to be identified for the company to grow. Over the next 28 years, Reebok systematically pursued opportunities based on buyer types, buyer needs, and technological innovation as a means of satisfying the needs of buyers. Reebok identified buyer “performance-oriented” needs with a focus on specific athletic activities (such as tennis, basketball, golf, and track and field) and “nonathletic” needs with an emphasis on comfort, fashion, and style for three types...