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Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
Strategic marketing 9edi.chapter6
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Strategic marketing 9edi.chapter6

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  • 1. Strategic Marketing 1. Imperatives for Market-Driven Strategy 2. Markets and Competitive Space 3. Strategic Market Segmentation 4. Strategic Customer Relationship Management 5. Capabilities for Learning about Customers and Markets 6. Market Targeting and Strategic Positioning 7. Strategic Relationships 8. Innovation and New Product Strategy 9. Strategic Brand Management 10. Value Chain Strategy 11. Pricing Strategy 12. Promotion, Advertising and Sales Promotion Strategies 13. Sales Force, Internet, and Direct Marketing Strategies 14. Designing Market-Driven Organizations 15. Marketing Strategy Implementation And Control
  • 2. CHAPTER 6 Market Targeting and Strategic Positioning Market Targeting Strategy Targeting in Different Market Environments Positioning Strategy Developing the Positioning Strategy Determining Positioning EffectivenessMcGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 3. MARKET TARGETING STRATEGYThe Marketing Targeting Decision Identities the People orOrganizations in a Product-Market Toward Which a Firm Directs Its Positioning Strategy Guided by an understanding of: •The product-market •Its buyers •Firm’s capabilities resources •Competition 6-3
  • 4. Market Targeting and Strategic Positioning* Core dimensions of market-driven strategy: deciding which buyer’s to target and how to position the firm’s products* Effective targeting and positioning strategies are essential in gaining and sustaining superior performance 6-4
  • 5. SEGMENTS VALUE OPPORTUNITES CAPABILITIES/ SEGMENT MATCH TARGET(S) POSTIONING FOR EACH TARGET 6-5
  • 6. Identify segments within the product-market TARGETING AND POSTIONING Decide and implement a Decide which positioning segment(s) tostrategy for each targettargeted segment 6-6
  • 7. Market Targeting Alternatives Segments Clearly Defined Target Target Selected MultipleSelective Niche(s) Segments ExtensiveTargeting Product Product Targeting Specialization Variety Differentiated But Segments Not Clearly Defined 6-7
  • 8. Factors Influencing Targeting Decisions* Stage of product – market maturity* Extent of diversity in preferences* Industry structure* Capabilities and resources* Opportunities to gain competitive advantage 6-8
  • 9. TARGETING IN DIFFERENT MARKET ENVIRONMENTS  Emerging  Growing  Mature  Declining  Global 6-9
  • 10. Emerging MarketBuyer Diversity * Segmentation limited due to similarity of buyers’ preferencesIndustry Structure * Typically small new organizations * Limited access to resourcesCapabilities and Resources * Unique benefit (differentiation) strategy rather than low-cost * First-mover advantageTargeting Strategy * Single target or a few broad segments 6-10
  • 11. Growth MarketBuyer Diversity * Segments should existIndustry Structure * Numerous competitorsCapabilities and Resources * Survival requires aggressive actions by firms that seek large market positions * Otherwise select one or a few market segmentsTargeting Strategy * Three possible strategies 1. Extensive market coverage by firms with established businesses in related markets 2. Selective targeting by firms with diversified product portfolios 3. Very focused targeting strategies by small organizations serving one or a few market segments. 6-11
  • 12. Mature MarketsBuyer Diversity * Segmentation essential for competitive advantageIndustry Structure * Intense competition for market share * Emphasis on cost and service, and pressures on profitsCapabilities and Resources  Management’s objectives: cost reduction, selective targeting, product differentiationTargeting Strategy  Deciding which segment to serve  Firms pursuing extensive targeting strategies may decide to exit from certain segments 6-12
  • 13. Global MarketsGlobal Reach and Standardization * Identify market segments that span global markets and serve these needs with global positioning strategiesLocal Adaptation * Consider requirements of domestic buyers * Buyers’ needs and preferences affected by social, political, cultural, economic, and language differencesIndustry Structure * Restructuring, acquisitions, mergers, and strategic alliances altering industries and competitionTargeting Strategy * Targeting a single country, regional (multinational) targeting, or global targeting 6-13
  • 14. GLOBAL Successful British Retailer Tesco Enters the U.S. FEATURE MarketTesco announced plans to open a chain of convenience stores on the U.S. WestCoast in 2007, spending an estimated $453 M. The very successful retailer has fourtypes of stores, including the convenience chain, Tesco Express.This initiative is being launched even though the U.S. retail grocery market isexperiencing intense competition, and some chains are cutting back or selling out.Tesco’s decision to enter the U.S. convenience market is bold and risky. Someauthorities consider the action questionable. However, Tesco has a very impressivesuccess record in Britain. With its Tesco Express, Tesco Metro, Superstore, andExtra hypermarkets, the giant retailer has dulled Wal-Mart’s drive to dominate theretail scene.Tesco has no brand awareness in the U.S. so building brand identity will bechallenging. Yet the retailer has global buying power, powerful informationtechnology, and strong supply chain capabilities. The stores will offer groceries,produce, and private-label ready-to-eat meals. Some observers think Tesco isplanning to compete with Wal-Mart in its home market.Source: Kerry Capell, “Tesco: California Dreaming?” BusinessWeek, February 27, 2006, 38. 6-14
  • 15. POSITIONING STRATEGYDeciding the desired perception/association of an organization/ brand bymarket target buyers…and designing themarketing program to meet (and exceed)buyers’ value requirements. 6-15
  • 16. STRATEGIC POSITIONING INITIATIVES POSITIONING CONCEPT The desired positioning of the product (brand) by targeted buyers MARKET TARGET POSITIONING POSITIONINGEFFECTIVENESS STRATEGY How well The combination of management’s marketing actionspositioning objectives used to communicate are achieved for the the positioning concept market target to targeted buyers 6-16
  • 17. How Positioning Works* Objective * Match the organization’s distinctive capabilities with the customer value requirements for the market target (How do we want to be perceived by targeted buyers?)* Desired result * Gain a relevant, distinct, and enduring position by the targeted buyers that they consider important.* Actions by the organization * Design and implement the positioning strategy (marketing program) for the market target. 6-17
  • 18. INNOVATION Spotting Shifts in Demand inFEATURE designing Hennes & Mauritz (H&M) ApparelIt’s 1:30 p.m. on a Monday in the bustling H&M store on Manhattan’s fifth Avenue,and Alma Saldana, a 28-year-old makeup artist from Houston, is stuffing three tinyvests into her black Y&M shopping bag. That’s on top of blouses, jackets, andpants. Saldana is in a buying frenzy. This is her first visit to H&M, the Stockholm-based fashion retailer, and it’s everything she had hoped for. “Somebody told meyou find great fashion at a very cheap price, and it’s true!” she exclaims.Such enthusiasm has made H&M one of the hottest fashion companies around.Central to its success is its ability to spot shifts in demand and respond withlightning speed. While traditional clothing retailers design their wares at least sixmonths ahead of time, H&M can rush items into stores in as little as three weeks.Most of the work is done ahead, too. But when it sees consumers scooping upsomething like vests, it speeds a slew of new variations into stores within the sameseason, to the delight of shoppers like Saldana. “Speed is important. You need tohave system where you can react in a short lead time with the right products,”says Chief Executive Rolf Eriksen. 6-18
  • 19. How does it work? H&M designers had included a couple of cropped vests intheir autumn/winter collections. In august, shortly after the vests went on sales,they started “flying out of the stores,” say Margareta van den Bosch, H&M’s headof design. H&M’s designers in Stockholm (it has more than 100) spotted thetrend in the company’s worldwide sales reports, published internally everyMonday. About half of them immediately started sketching new styles. Asquickly as designs came off their desks, pattern makers snipped and pinned,pressing employees into service as live models. At the same time, buyersordered fabrics. The designs were zoomed electronically to workers at H&M’sproduction offices in Europe and Asia, which then selected manufacturers thatcould handle the jobs quickly. In less than two months most H&M stores had 5 to10 new vest styles in stock.One of the secrets to H&M’s speed is decisiveness. The people in charge ofeach collection can dream up and produce new fashions on their own authority.Only huge orders require approval from higher ups. “We have a flat organization. We have a shorter way to a decision,” says Sanna Lindberg, president of H&MHennes & Mauritz USA. That makes H&M fashionable in more ways than one. Source: Steve Hamm, “SPEEDDEMONS,” BusinessWeek, March 27, 2006, 70-71. 6-19
  • 20. The Perception or Association thatManagement Wants Buyers to Have Concerning the Brand Symbolic Functional SELECTING THE POSITIONING CONCEPT Experiential 6-20
  • 21. DEVELOPING THE POSITIONING STRATEGYThe Positioning Strategy Places the Marketing Program (mix) Components into a Coordinated Set of Actions Designed to Deliver Superior Customer Value PRODUCT VALUE PROMOTION CHAIN PRICE 6-21
  • 22. Positioning Issues1. The positioning concept applies to a specific brand rather than all the competing brands that compose a product classification2. The concept is used to guide positioning decisions over the life of the brand3. Multiple concepts are likely to confuse buyers and may weaken the effectiveness of positioning actions 6-22
  • 23. The positioning strategy indicates how (and why) the product mix, line,or brand is to be positioned for each market target. This strategyincludes:•The product strategy, indicating how the product(s) will be positioned against the competition in the product-market.•The value chain (distribution) strategy to be used.•The pricing strategy, including the role and positioning of price relative tocompetition.•The advertising and sales promotion strategy and the objectives these promotion components are expected to achieve.•The sales force strategy, direct marketing strategy, and the Internet strategy,indicating how they are used in the positioning strategy. 6-23
  • 24. DETERMINING POSITIONING EFFECTIVENESSThe marketing offer (product,distribution, price, and promotion) isboth distinct and valued in the mindsof the customers in the market target. 6-24
  • 25. Customer and Competitor Research Methods for Determining Positioning Effectiveness Analytical Test MarketingPositioning Models 6-25
  • 26. Customer and Competitor Research * Research Studies * Preference MapsTest Marketing * Generates information about commercial feasibility and marketing program * Provides market (sales forecasts) and effectiveness measuresPositioning Models * Incorporates research data into formal models of decision analysis 6-26
  • 27. Positioning Errors* Under-positioning – customers have only vague ideas about the company and do not perceive anything distinctive about it* Over-positioning – Customers have too narrow an understanding of the company, product, or brand* Confused positioning – Frequent changes and contradictory messages confuse customers* Doubtful positioning – claims made for the product or brand are not regarded as credible 6-27
  • 28. Positioning in Perspective* Positioning is a central part of business strategy* Positioning analysis starts with an understanding of the value proposition for the target segment* Value-driven positioning is the objective* Positioning seeks to differentiate the organization’s offer from the competition* Positioning seeks to create a unique perception in buyers’ minds of the target market segment* Positioning is the unifying dimension of market-driven strategy 6-28
  • 29. Positioning usually means that an overt decisionis being made to concentrate only on certainsegments. Such an approach requirescommitment and discipline because it’s not easyto turn your back on potential buyers. Yet, theeffect of generating a distinct, meaningfulposition is to focus on the target segments andnot to be constrained by the reaction of othersegments. Source: Aaker and Shansby, Business Horizons, May-June 1982, 61. 6-29
  • 30. Illustrative Impacts of Changes in Business Strategy on Targeting and Positioning StrategiesChanges in Business Market Targeting ImpactStrategy Positioning ImpactRapid Growth/ Market scope may not change Substantial changes in resourceRetrenchment although targets may be increased allocation, (e.g. advertising or reduced. expendituresChanging the Product No change is necessary unless Changes in product strategy, methods ofMix increase in product scope creates distribution, and promotional strategies opportunities in new segments. may be necessary.Changing the Market Targeting is likely to change to include Positioning strategy must be developedScope new targets. for each new target.Repositioning Should not have a major effect on Product, distribution, price, and promotion targeting strategy. strategies may be affected.Value Chain Integration Should have no effect on targeting Primary impact on channel, pricing and strategy. promotion strategies. Diversification Targeting strategies must be selected in Positioning strategies must be developed new business areas. (or acquired for the new business areas.Strategic Alliance Targeting strategy may be affected Operating relationships and assignment based on the nature and scope of the or responsibilities must be established. alliance. 6-30
  • 31. Targeting and Positioning Product Strategy Positioning StrategyPromotion DistributionStrategy Strategy Market Target Price Strategy 6-31

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