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Advance Marketing
- 1. MARKETING Strategies Segmentation – Targeting - Positioning
- 2. Objectives 01 Identify Common Marketing Strategies 02 Identify the various approaches to market segmentation 04 Identify Target Marketing Approaches 05 Identify Sources of Differentiation 06 Avoid Potential Positioning Errors 03 Explain the criteria for Effective Market Segmentation
- 4. WHAT IS STRATEGY? Etymology: “STRATEGOS” Greek word meaning ART OF THE GENERAL STRATEGY are ways that put us in an ADVANTAGEOUS POSITION.
- 5. EXAMPLE : BASKETBALL Game To SCORE as many as possible To PREVENT the other team from Scoring GOAL STRATEGY TACTICS END RESULT WHAT? HOW? TO WIN THE GAME 1 - Use the BEST SHOOTER to SCORE 2 – Put the BIG, TALL PLAYERS to guard the opponents
- 6. What is STRATEGY? A Good Strategy clearly answers the 4 key questions: Where do we compete? What unique value do we bring? What resources/capabilities do we utilize? How do we sustain that unique value? 01 02 03 04
- 7. MARKETING STRATEGY Definition 01 03 02 04 “Marketing Strategy indicates the specific markets towards which activities are to be targeted and the types of competitive advantage to be exploited.” Dibb & Simskin “Marketing Strategy is the marketing logic by which the business unit expects to achieve its marketing objectives.” Kotler “A set of decisions taken by management on how the business will allocate its resources and achieve sustainable competitive advantage in its chosen markets” Doyle “Marketing Strategy is an integrated set of choices about how we will create and capture value, over long periods of time.” MIT
- 8. Marketing Is the process by which the organization aligns itself with the market it has decided to serve. Strategy ~ Paul Fifield
- 10. Generic Strategies • Michael Porter • Basic Types of competitive advantage – low cost & differentiation
- 11. Generic Strategies Generic Competitive Strategy • Cost Leadership • Differentiation • Focus/Niche
- 12. Cost Leadership Strategy Strategy works best: • Buyers are large and have significant bargaining power • price competition among rival sellers is a dominant competitive force • the industry’s product is a standard item readily available from a variety of sellers
- 13. Differentiation Strategy Strategy works best: • There are many ways to differentiate the product • Not many rivals are following a similar type of differentiation
- 14. Focus/Niche Strategy Strategy works best: • costly or difficult for rivals to serve the specialized needs of the target market niche; • no other rivals are concentrating on the same target segment; • firm’s resources do not permit it to go after a wider portion of the market;
- 16. Market Penetration Strategy Involve investing in existing customers to gain additional usage of existing products PRODUCT – MARKET COMBINATION Product Development Strategy Recognize the opportunity to invest in new products that will increase usage from the current customer base
- 17. Market Develop Strategy Allow for expansion of the firm’s product line into untapped markets, often internationally PRODUCT – MARKET COMBINATION Diversification Seize on opportunities to serve new markets with new products
- 18. S T P MarketingMODEL Segmentation Targeting Positioning
- 19. S~T~P Dividing a Market into meaningful smaller market or submarkets based on common characteristics MARKET SEGMENTATION TARGET MARKETING POSITIONING Evaluating the market segments, then making decisions about which among them is most worthy of investment for development Communicating one or more sources of value to customers in ways that connect needs and wants to what the product has to offer
- 20. SEGMENTATION
- 21. WHAT IS SEGMENTATION? Segmentation Seeks to find one or more factors about members of a heterogeneous market that allow for dividing the market into smaller, more homogenous subgroups for the purpose of developing strategies to best meet the segment’s distinct needs and wants
- 22. Market Segmentation Procedure Conducts exploratory interviews and focus groups to gain insight into customer motivations, attitudes, and behavior Survey Stage Analysis Stage Profiling Stage Applies factor analysis o the data to remove correlated variables Each cluster is profiled in terms of its distinguishing attitudes, behavior … and is given a name based on its dominant characteristics
- 24. Consumer Market Segmentation Approach GEOGRAPHIC Segmentation Divides consumer groups based on physical location • By region • By density of population • By size and growth of population • By climate
- 25. Consumer Market Segmentation Approach DEMOGRAPHIC Segmentation Divides consumer groups based on a variety of readily measurable descriptive factors about the group Age Segmentation Gender Generational Group Race and Ethnicity Income Occupation Education Social Class
- 26. Consumer Market Segmentation Approach PSYCHOGRAPHIC Segmentation Relies on consumer variables – Personality, activities, interests, and opinions to segment a market • Lifestyle • Personality • Values
- 27. Consumer Market Segmentation Approach BEHAVIORAL Segmentation Consumer groups are divided into groups on the basis of their knowledge of, attitude towards, use of, or response to a product Occasions Benefits User Status Usage Rate Loyalty Status Buyer-readiness Stage Attitude
- 28. Consumer Market Segmentation Approach GEOCLUSTERING Segmentation Combining several variables in an effort to identify smaller, better defined target groups PRIZM (Potential Rating Index by Zip Markets) Categories: Education and affluence Family Life Cycle Urbanization Race and Ethnicity Mobility
- 29. Business Market Segmentation Approach
- 30. Business Market Segmentation Approach DEMOGRAPHIC Segmentation Industry Company Size Location
- 31. Business Market Segmentation Approach OPERATING VARIABLES Segmentation Technology User Status Customer Capabilities
- 32. Business Market Segmentation Approach PURCHASING APPROACHES Segmentation Purchasing function organization Power Structure Nature of existing relationship General Purchasing Purchase Criteria
- 33. Business Market Segmentation Approach SITUATIONAL FACTOR Segmentation Urgency Specific Application Size of the Order
- 34. Business Market Segmentation Approach PERSONAL CHARACTERISTICS Segmentation Buyer-Seller Similarity Attitude towards Risk Loyalty
- 35. The size, purchasing power, and characteristics of the segments can be measured Effective SEGMENTATION MEASURABLE The segments are LARGE and PROFITABLE enough to serve SUBSTANTIAL
- 36. The segments can be effectively reached and served Effective SEGMENTATION ACCESSIBLE The segments are conceptually distinguishable and respond differently to different marketing mixes DIFFERENTIABLE
- 37. Effective programs can be formulated for attracting and serving the segments Effective SEGMENTATION ACTIONABLE
- 38. TARGETING
- 39. TARGET MARKETING Target Market is a set of buyers who share common needs or characteristics that the company decides to serve Target Marketing is the process of evaluating market segments and deciding which among them shows the most promise for development
- 40. Analyze market segments 3Develop profits of each potential target market STEPS IN Select a target marketing approach TARGET MARKETING TARGET MARKETING
- 41. The goal is to determine the relative attractiveness of the various segments using an Return of Investment (ROI) approach Analyze MARKET SEGMENTS Quickest, highest-level, and longest-sustaining anticipated ROI will have the highest level of attractiveness to segment
- 42. 01 Size and Growth Potential Analyze MARKET SEGMENTS Several Factors to consider when analyzing SEGMENT ATTRACTIVENESS 02 Competitive forces related to the segment 03 Overall strategic fit of the segment to the company’s goal and value-adding capabilities
- 43. Once the market segments have been analyzed, develop profiles of each segment under consideration for investment as a target market. Develop PROFILES of each potential TARGET
- 44. 01 Geographic PROFILES may include but not limited to: 02 Demographic 03 Psychographic Develop PROFILES of each potential TARGET 04 Behavioral Perspective
- 45. 01 Primary target markets Analysis results in segments that fall within four (4) basic level priority for development 02 Secondary target markets 03 Tertiary target markets Develop PROFILES of each potential TARGET 04 Target markers to abandon for future development
- 46. Continuum of Target Marketing Approaches sometimes referred as unsegmented mass market. This is an approach that is grounded in Porter’s competitive strategy of low cost may use a relatively undifferentiated tarte marketing strategy based primarily on the resulting price advantage; UNDIFFERENTIATED Target Marketing VERY BROAD VERY NARROW Undifferentiated target marketing
- 47. Continuum of Target Marketing Approaches developing different value offering for different targeted market DIFFERENTIATED Target Marketing VERY BROAD VERY NARROW Undifferentiated target marketing Differentiated target marketing
- 48. Continuum of Target Marketing Approaches refers as focus strategy or niche strategy, this approach involves targeting a large portion of small market CONCENTRATED Target Marketing VERY BROAD VERY NARROW Undifferentiated target marketing Differentiated target marketing Concentrated target marketing
- 49. Continuum of Target Marketing Approaches advocates that the energy and resources should be directed into establis hing a learning relationship with each customer and the connect that kno wledge with the firm’s production and services capabilities to fulfill that c ustomer’s needs in as custom a manner as possible. CUSTOMIZED (one-to-one) Target Marketing VERY BROAD VERY NARROW Undifferentiated target marketing Differentiated target marketing Concentrated target marketing Customized target marketing
- 50. POSITIONING
- 51. POSITIONING An act of designing the company’s offering and image to occupy the distinctive place in the target market’s mind This involves implanting the brand’s unique benefits and differentiation in the customer’s mind
- 52. POSITIONING The end result of positioning is the successful creation of a market-focused value proposition, a cogent reason why the target market should buy the product Positioning Maps that plot perceptions of brands are commonly used
- 53. Perceptual MAPS A visual tool for positioning that displays paired attributes in order to compare consumer perceptions of each competitor’s delivery against those attributes;
- 54. Sources of DIFFERENTIATION Effective differentiation is absolutely central to successful positioning strategy Most Often Used SOURCES of Differentiation Innovative Leadership Product leadership Image leadership Price leadership Convenience leadership Service leadership Personnel leadership
- 56. Thank you!