Marketing Strategy and Competitive Positioning pdf ebook

Different definitions for different purposes. Day (1992) makes the point that we may 
need different market definitions for different types of marketing decision: tactical deci-
sions such as budgeting and salesforce allocation are likely to require narrow and easily 
understood market definitions (existing customers, similar products, existing channels), 
while strategic decisions require broader market definitions (including new market 
opportunities, changes in technology and substitute products, and potentially new types 
of competitive entrant).
9.1.1 Defining markets based on customers or competitors 
Day (1992) suggests that markets can be defined in two ways: on the basis of customers, or 
on the basis of competitors: 
● 
Customer-defined markets. This approach takes us beyond products that are ‘substitutes 
in kind’ (that is, the same technology), to ‘substitutes in use’ (that is, all the products and 
services that may meet the same customer needs and problems). This is what disruptors 
focus on – for example, Airbnb competing with AccorHotels.
● 
Competitor-defined markets. This approach focuses on all the competitors that could 
possibly serve the needs of a group of customers, and reflects technological similarity, 
relative production costs and distribution methods – for example, AccorHotels compet-
ing with Hilton Hotels.
In general, competitor-based definition will be important for allocating marketing 
resources and managing the marketing programme – responding to price cuts, salesforce 
coverage and so on. On the other hand, customer-defined approaches are likely to be more 
insightful in understanding the dynamics of the market, the attractiveness of alternative 
markets and in developing strong competitive positions. 

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CHAPTER 9 SELECTING MARKET TARGETS
One practical approach to evaluating the characteristics of markets is the product–
customer matrix.
9.1.2 Product–customer matrix
Figure 9.2 suggests that the underlying structure of a market can be understood as a simple 
grouping of customers and products/services. The challenge is to examine a market using 
this matrix to identify no more than five or six groups of products and services and five or 
six groups of customers, that constitute the market. If this is impossible then this is probably 
not a single market but several, and the exercise should be subdivided.
The important perspective that can be built using this approach is one that recognises:
●