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    1. 1. Marketing Strategy Segmentation, Targeting and Positioning
    2. 2. The Tools of Marketing the “Offering” Mission SBUs STP Business Strategy <ul><li>Marketing Strategy </li></ul><ul><li>Who to Serve </li></ul><ul><li>How to Serve </li></ul>Marketing Tactics and Programs Pricing Policy <ul><li>List prices </li></ul><ul><li>Discounts and promotions </li></ul><ul><li>Credit terms </li></ul><ul><li>Etc. </li></ul>Product Policy <ul><li>Length and depth of line </li></ul><ul><li>Quality </li></ul><ul><li>Associated services </li></ul><ul><li>Packaging/labeling </li></ul><ul><li>Design </li></ul><ul><li>Etc. </li></ul>Place/Distribution Policy <ul><li>Intensity </li></ul><ul><li>Terms </li></ul><ul><li>Service </li></ul><ul><li>Etc. </li></ul>Promotional Policy Communication Mix Elements
    3. 3. Business Strategy <ul><li>A Business has customer groups (i.e. markets), customer needs, core offering </li></ul><ul><li>Three generic business strategies (Porter): 1. Overall cost leadership </li></ul><ul><ul><ul><ul><li>2. Differentiation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>3. Focus </li></ul></ul></ul></ul>
    4. 4. Business Growth Strategies Diversification Product Development New Products Market Development Market Penetration Existing Products New Markets Existing Markets
    5. 5. Marketing Strategy (STP) <ul><li>Segmentation of customer groups (markets) </li></ul><ul><li>Selection of specific Target Markets </li></ul><ul><li>Positioning of core offering to each target market </li></ul>
    6. 6. The Environments <ul><li>FACTORS SHAPING PRIMARY DEMAND </li></ul><ul><li>Cultural, Social and Demographic Environment </li></ul><ul><ul><li>Major effect is on people’s and organization’s willingness to buy certain kinds of products and services </li></ul></ul><ul><li>Economic and Technological Environments </li></ul><ul><ul><li>Impacts on people’s and organization’s ability to buy </li></ul></ul><ul><li>Political and Legal Environments </li></ul><ul><ul><li>Impacts on the nature of practices used to drive primary and selective demand </li></ul></ul><ul><ul><li>May also shape primary demand for goods and services needed to comply with regulations </li></ul></ul>
    7. 7. The Environments <ul><li>FACTORS SHAPING SELECTIVE DEMAND </li></ul><ul><li>Competitive Environment </li></ul><ul><ul><li>Impacts on whether we can meet buyer needs better than anyone else </li></ul></ul><ul><ul><li>Includes substitutes </li></ul></ul><ul><ul><li>Major effect is on people’s and organization’s choice of brands other than yours </li></ul></ul><ul><li>Customer Environment </li></ul><ul><ul><li>Major effect is on people’s and organization’s choice of brands </li></ul></ul><ul><li>Current Marketing Situation (i.e. the internal environment) </li></ul><ul><ul><li>Major effect is on people’s and organization’s choice of your brand over others </li></ul></ul>
    8. 8. Competitive Assessment <ul><li>Marketing Strategy </li></ul><ul><li>Target Market(s) </li></ul><ul><li>Business Strategy </li></ul><ul><li>Generic Strategy </li></ul><ul><li>Market Share </li></ul><ul><li>Key Success Factors </li></ul><ul><li>Share of Mind </li></ul><ul><li>Competitive Advantage (Positioning) </li></ul><ul><li>Marketing Mix Elements </li></ul><ul><li>Core Offering(s) </li></ul><ul><li>Product/Service Quality </li></ul><ul><li>Pricing </li></ul><ul><li>Communication Media </li></ul><ul><li>Personal Selling Methods </li></ul><ul><li>Distribution Methods </li></ul><ul><li>Location </li></ul><ul><li>Post-sales service </li></ul>For Each Competitor, Assess the following:
    9. 9. Segmentation Scheme Level 1 - Base Level 2 - Base <ul><li>Typical Bases: </li></ul><ul><li>Demographic </li></ul><ul><li>Geographic </li></ul><ul><li>Behavioral </li></ul><ul><li>Psychographic </li></ul>Core Offering Segment A Segment B Segment C Segment C.1 Segment C.2 Segment C.3 Segment C.3.i Segment C.3.ii
    10. 10. A Sample
    11. 11. The Segmentation Grid Consumer Profiling <ul><li>Contents: </li></ul><ul><li>Who buys… </li></ul><ul><ul><li>What </li></ul></ul><ul><ul><li>Where </li></ul></ul><ul><ul><li>When </li></ul></ul><ul><ul><li>Why </li></ul></ul><ul><ul><li>How </li></ul></ul>
    12. 12. Assessment of Current Marketing Situation <ul><li>Current marketing strategy assessment </li></ul><ul><ul><li>Segmentation strategy </li></ul></ul><ul><ul><li>Target Markets </li></ul></ul><ul><ul><li>Positioning & Branding </li></ul></ul><ul><ul><li>Marketing Mix Elements </li></ul></ul><ul><li>Sources of competitive advantage </li></ul><ul><li>Constraints </li></ul><ul><ul><li>Budget </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Human factors </li></ul></ul><ul><ul><li>Channels </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Management, etc. </li></ul></ul>
    13. 13. SMART Objectives <ul><li>S pecific </li></ul><ul><li>M easurable </li></ul><ul><li>A chievable </li></ul><ul><li>R ealistic </li></ul><ul><li>T imeline </li></ul>The Marketing Plan A Hierarchy of Objectives Overall Plan Objectives Individual Segment Objectives Positioning Objectives <ul><li>Tactical Objectives: </li></ul><ul><ul><li>Product Objectives </li></ul></ul><ul><ul><li>Pricing Objectives </li></ul></ul><ul><ul><li>Place Objectives </li></ul></ul><ul><ul><li>Promotion Objectives </li></ul></ul>
    14. 14. Integrating Analysis with Planning ASSESS MARKET-COMPANY FIT Define Quality and Identify Segments You Can Serve (Targeting) ASSESS PRODUCT-COMPANY FIT Evaluate Relative Quality and Identify Competitors You Can Beat (Targeting & Positioning) CUSTOMER ANALYSIS Who BUYS What, Where, When, How and Why Determine Basis of Segmentation COMPETITOR ANALYSIS Who OFFERS What, Where, When, How and Why Determine Basis of Differentiation COMPANY ANALYSIS Given your objectives and resources … what can you do, for whom, where and when?
    15. 15. Alternatives Segmentation Strategy Mass Market Segment A Segment A Segment B Segment B Segment B Segment C Segment C Segment C Niche A2 Niche A1 Niche A3 Niche A2 Niche A1 Niche A3 Multi- Segment Strategy Single Segment Strategy Segment Niche Strategy Mass Customization Strategy Segment C Segment B
    16. 16. Targeting Decision Matrix Fit with Trends – elements affecting Primary Demand ** ** ** Weight Total Constraints? Profitable? Fit with Mission? Company Resources Competitive Advantage Fit with growth and profit objectives? Attractive? Target Segment C Target Segment B Target Segment A Criteria (Fit)
    17. 17. Positioning <ul><li>The “definition”, “place”, or “identity” of a product in the minds of consumers, relative to competitive offerings. </li></ul><ul><li>Assumes </li></ul><ul><ul><li>Differentiation </li></ul></ul><ul><li>A positioning statement </li></ul><ul><ul><li>To defined target segment </li></ul></ul><ul><ul><li>X is the brand of defined category </li></ul></ul><ul><ul><li>That unique selling proposition </li></ul></ul>
    18. 18. Positioning Competitively: Alternative Positioning Strategies <ul><li>Product attributes </li></ul><ul><li>Benefits offered </li></ul><ul><li>Usage occasions </li></ul><ul><li>Classes of users </li></ul><ul><li>Directly on competitor </li></ul><ul><li>Around competitor </li></ul><ul><li>Against product class </li></ul>
    19. 19. Positioning: The Unifying Theme for Marketing Efforts <ul><li>Positioning Reflects Key Elements of Strategy </li></ul><ul><li>How we think the customer views the product </li></ul><ul><li>How we want the customer to think about us </li></ul><ul><li>Who the customer sees as a substitute for us </li></ul><ul><li>What we feel we can do better than the competition </li></ul><ul><li>Positioning Shapes Customer Expectations </li></ul><ul><li>A “promise” to potential customers </li></ul><ul><li>The reason they give us trial; the standard we must meet </li></ul><ul><li>All Marketing Elements Must Reinforce the Positioning </li></ul><ul><li>Positioning embodies the principle of market FOCUS </li></ul><ul><li>Focus requires a concentration on a specific type </li></ul><ul><li>of customer </li></ul><ul><li>Inconsistencies between marketing tools leads to a </li></ul><ul><li>loss of efficiency and effectiveness </li></ul>What the Customer Gets What the Customer Wants Associated services Packaging Features Brand identity Image Level of quality Warranty Credit Delivery Installation Pre-sales services Back-office services
    20. 20. Creating a Value Proposition (Positioning) <ul><li>Part 1: What We Do </li></ul><ul><ul><li>For the target market </li></ul></ul><ul><ul><li>Who want the “consumption problem” </li></ul></ul><ul><ul><ul><ul><ul><li> (what “need” do you serve?) </li></ul></ul></ul></ul></ul><ul><ul><li>Our product is our portion of the “solution” </li></ul></ul><ul><ul><ul><ul><ul><li> (when do they think about your class of product in connection with that need?) </li></ul></ul></ul></ul></ul><ul><ul><li>That features key benefit provided </li></ul></ul><ul><ul><ul><ul><ul><li> (what’s the one or two things you want them to remember about you?) </li></ul></ul></ul></ul></ul><ul><ul><li>As measured by how the customer infers quality </li></ul></ul><ul><li>Part 2: Why We Will Win </li></ul><ul><ul><li>Unlike our main competitors </li></ul></ul><ul><ul><li>Our product provides key point(s) of difference </li></ul></ul><ul><ul><li>As supported by what makes our difference possible </li></ul></ul><ul><ul><ul><ul><ul><li> (why they should believe us…TODAY) </li></ul></ul></ul></ul></ul><ul><ul><li>And protected by why the competition cannot easily overcome it </li></ul></ul><ul><ul><ul><ul><ul><li>(why they should believe us…TOMORROW) </li></ul></ul></ul></ul></ul>
    21. 21. The role of the marketing mix Product Price Place Promotion Physical Evidence Process People Partnering Target Customers Positioning Marketing Strategy Decisions Tactical Implementation Customer Effects
    22. 22. Some Decision Areas Organized by the Four Ps Product <ul><li>Objectives </li></ul><ul><li>Physical Goods </li></ul><ul><li>Service </li></ul><ul><li>Features </li></ul><ul><li>Quality Level </li></ul><ul><li>Accessories </li></ul><ul><li>Installation </li></ul><ul><li>Instructions </li></ul><ul><li>Warranty </li></ul><ul><li>Product Lines </li></ul><ul><li>Packaging </li></ul><ul><li>Branding </li></ul>Place <ul><li>Objectives </li></ul><ul><li>Channel Type </li></ul><ul><li>Market Exposure </li></ul><ul><li>Kinds of Middleman </li></ul><ul><li>Kinds and Locations of Stores </li></ul><ul><li>How to Handle Transporting and Storing </li></ul><ul><li>Service Levels </li></ul><ul><li>Recruiting Middlemen </li></ul><ul><li>Managing Channels </li></ul>Promotion <ul><li>Objectives </li></ul><ul><li>Blend </li></ul><ul><li>Salespeople </li></ul><ul><li>- Kind </li></ul><ul><li>- Number </li></ul><ul><li>- Selection </li></ul><ul><li>- Training </li></ul><ul><li>- Motivation </li></ul><ul><li>Advertising </li></ul><ul><li>- Targets </li></ul><ul><li>- Kinds of Ads </li></ul><ul><li>- Media Type </li></ul><ul><li>- Copy Thrust </li></ul><ul><li>- Who Prepares? </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Publicity </li></ul>Price <ul><li>Objectives </li></ul><ul><li>Flexibility </li></ul><ul><li>Level over Product Life Cycle </li></ul><ul><li>Geographic Terms </li></ul><ul><li>Discounts </li></ul><ul><li>Allowances </li></ul>
    23. 23. Some Decision Areas Organized by the other Ps Phys. Evidence <ul><li>Objectives </li></ul><ul><li>Facility Design </li></ul><ul><li>Equipment </li></ul><ul><li>Signage </li></ul><ul><li>Employee Dress </li></ul><ul><li>Other tangibles </li></ul><ul><li>- Reports </li></ul><ul><li>- Bus. Cards </li></ul><ul><li>- Statements </li></ul><ul><li>- Guarantees </li></ul>Process <ul><li>Objectives </li></ul><ul><li>Flow of activities </li></ul><ul><li>Customer involvement </li></ul><ul><li>Number of steps </li></ul><ul><li>Queuing </li></ul><ul><li>Payment methods </li></ul>People <ul><li>Objectives </li></ul><ul><li>HR activities </li></ul><ul><li>Customer training </li></ul><ul><li>Customer education </li></ul>Partnering <ul><li>Objectives </li></ul><ul><li>Loyalty programs </li></ul><ul><li>Incentive programs </li></ul><ul><li>Alliances </li></ul><ul><li>Networking </li></ul>
    24. 24. Marketing Mix People * Process* Physical Evidence* Objectives and tactics Partnering Objectives for channels/place Tactics Place Objectives for promotion Promotion tactics to fit with positioning Promotion Objectives for pricing Pricing tactics to fit with positioning Price Objectives for Product Mix Items Product Tactics to augment offering to fit with positioning Product To Target Market A, X is the differentiated brand of category that offers….. Positioning Statement Target Segment B Target Segment A
    25. 25. Implementation Store managers to review inventory weekly to determine if further price changes are needed November 2003 $300 for new price tags Store Managers Reduce price of Widget inventory to eliminate excess stock Review regular customer surveys to check satisfaction with waiting area October 2003 $15,000 for new furniture and other chattels Office Manager Re-arrange waiting area, purchase couches, Track telephone calls and website visits pre- and post-advertisement September, 2003 $10,000 Marketing Manager Place full page advertisement in CIO magazine Control/Evaluation Time Money People Implementation Task
    26. 26. Budget <ul><li>Projections of sales </li></ul><ul><li>Include and note implementation costs </li></ul><ul><li>Sensitivity analysis </li></ul>
    27. 27. Controls Overall Plan Objectives Individual Segment Objectives The Marketing Plan A Hierarchy of Objectives Metrics Method of Evaluation Timing and frequency of Evaluation Reaction Plans Contingencies
    28. 28. The Report <ul><li>Introduction (Background) </li></ul><ul><li>Case Problem(s), Issue(s) </li></ul><ul><li>Objectives/Decision Criteria </li></ul><ul><li>Analysis </li></ul><ul><ul><li>Current marketing situation </li></ul></ul><ul><ul><li>Identification and analysis of alternatives </li></ul></ul><ul><li>Marketing Strategy/ Recommendations </li></ul><ul><li>Implementation Plan (Marketing Mix) </li></ul>
    29. 29. Sources <ul><li>Dr. S. Armstrong, Wharton </li></ul><ul><li>Dr. M. Cunningham, Queen’s </li></ul><ul><li>Mr. K. Wong, Queen’s </li></ul><ul><li>Dr. S. Taylor, Queen’s </li></ul><ul><li>Kotler and Keller (2007), A Framework for Marketing Management – 3 rd Edition , Pearson/Prentice Hall </li></ul><ul><li>Zeithaml, Bitner, and Gremler (2005), Services Marketing – 4 th Edition , McGraw-Hill </li></ul><ul><li>The 2201 Team – S. Myrden, D. Stapleton, T. Jones </li></ul>