Develop Marketing Strategies

© NSW Technical and Further Education Commission Date | Version 0.0
Develop and implement marketing strategies
Topic Three: Marketing Strategy/Positioning/Segmentation
SITXMPR005

Learning outcomes
• Identify and analyse specific opportunities based on internal and external
market analysis
• Developing marketing strategies that are consistent with direction, values
and business plan of the organisation
• Ensure marketing strategies meet legal and ethical constraints
• Develop strategies in consultation with key stakeholders

Marketing strategy: What is it?
Definition:
A plan of action for identifying and analysing a target market and
developing a marketing mix to meet the needs of that market
(Elliott: 2006)

How does this fit into the overall strategic
planning process?
The strategic planning process gives us a long term view on what the business
wants to achieve.
However….
Strategic Marketing gives us more of an action plan on how to create a marketing
mix that will meet our Marketing Objectives. This is more functional planning and
relies on lower level management to implement key actions.

Marketing strategies should be consistent with
direction, values and business plans
Strategic marketing planning is a managerial process of ensuring a long-term
strategic fit between an organisation’s objectives, skills and resources and its
changing market, in keeping with the direction, values and business plans of the
organisation.
The aim of strategic marketing planning is to shape and reshape a company’s
business and products so that they continuously yield target profits and growth, and
look at how we talk to our customers. Airlines are always continuing to look at and
amend their strategic marketing planning look at the changes that Virgin Australia
have done over the past two years and how their strategic marketing has changed
with their product offering.

Market analysis
The company needs to ask itself… “where are we now?”
First, it needs to look at internal factors:
• Organisational objectives
• Organisational resources
• Current marketing mix
• Current market position
The main factors that need to be examined are human and financial resources:
• What skills do your staff have?
• What experience and knowledge do they have?
• What training needs do they have?
• Does your organisation have the skills base to deliver this training internally?

Setting marketing objectives
Goals for an organisation are normally set within the mission or vision. Similarly with
Marketing Objectives, these need to be clear and provide direction. Remember that
goals should always be SMART:
Specific
Measurable
Achievable
Realistic
Timely

Example
If you were to launch a new food product into the market, what would be some
marketing objectives you would set for 6 months post launch.
Suggestion could be if you were launching the Wet and Wild theme park in Sydney
or a re-launch of a recently refurbished hotel in Sydney, what would be some of the
marketing objectives you would set for 6 months post launch.

Example answers
• Reach 40% Awareness for the food product in the first year post launch Reach
80% of awareness in the first year to your target market
• Achieve $100,000 worth of sales in the first 6 months. Achieve 20,00 visitors to
your attraction in the first 6 months.
• Achieve 10% consumer loyalty to this product. Achieve 20% return visitation over
the first year.
• From these objectives you can see that there are some sales focused, marketing
focused and also another (loyalty) that shows the intention for consumers to
repeat purchase. All of them are SMART!

Next steps:
We need to establish our target market, our segment and our positioning.
This will then lead us into the development or our Marketing Plan.

1 Market segmentationMarket
Market
segment
Market
segmentation
People or organisations with
needs or wants and the ability and
willingness to buy.
A subgroup of people or organisations
sharing one or more characteristics that
cause them to have similar product needs.
The process of dividing a market into
meaningful, relatively similar and
identifiable segments or groups.
Definitions:

The importance of market segmentation
• Nearly all markets include people with different product needs and preferences.
Think of a what a family would like when travelling overseas compared to a single
person.
• It helps to define the needs and wants of your consumers more precisely as
similar segments have similar needs and wants.
• Decision-makers can define objectives and allocate resources more accurately
as consumers are not scattered but grouped.
• More precise objectives = better evaluation of performance.

Why use market segmentation

Bases for segmentation
Geography
Demographics
Psychographics
Benefits sought
Usage rate
The above are different ways in which we can segment. We will investigate each of
these and examples in the following slides

Geographic segmentation
Segmenting markets by region of the country or world, market size, market density
or climate.
Examples:
Region of the country or world
Market size
Market density
Climate

Benefits of regional segmentation
• New ways to generate sales in sluggish and competitive markets think of the
Western Suburbs of Sydney and how the opening Wet and Wild Sydney has
effected tourism in that area
• Scanner data allows assessment of best-selling brands in region
• Regional brands appeal to local preferences
• React more quickly to competition.

Demographic segmentation
Segmenting markets by age, gender, income, ethnic background and family life
cycle.
Family Life Cycle:
A series of stages determined by a combination of:
 Age
 Marital status and
 Children

Psychographic segmentation
Market segmentation on the basis of personality, motives, lifestyles and
geodemographics.
Lifestyle examples:
How time is spent
Beliefs
Socioeconomic characteristics
Geodemographic examples:
Segmenting potential customers into neighborhood lifestyle categories.
Combines geographic, demographic and lifestyle segmentation

Benefit segmentation
The process of grouping customers into market segments according to the benefits
they seek from the product. Think of the benefits of flying business class in a plane
compared to economy.

Usage-rate segmentation
Dividing a market by the amount of product bought or consumed.

Target market
A group of people or organisations for which an organisation designs, implements
and maintains a marketing mix intended to meet the needs of that group, resulting in
mutually satisfying exchanges.
It is easier to market a product to a target market rather than the mass market. It is
too costly to market to everyone and would be a waste of resources. Therefore,
marketers find that group of consumers with common attributes and consumption
patterns to market their product to. This also creates an easier dialogue for
marketers to communicate with consumers if they share common features.

Positioning
Developing a specific marketing mix to influence potential customers’ overall
perception of a brand, product line or organisation in general.
Position is referred to as: The place a product, brand or group of products occupies
in consumers’ minds relative to competing offerings.

There are a number of different ways you can
position your product
Positioning in relation to competition - look at various airlines
Positioning based on price compare- Jetstar to Tiger Airways
Positioning based on associated benefits
Positioning based on quality of service- Ritz Carlton Hotels to Four Seasons Hotels
ACTIVITY: Can you name some brands that fit into each of these segments?

Answers…
• Positioning in relation to competition: Skiers would pay a bit more for lift
tickets at certain areas to reduce the time they wait in queues
• Positioning based on price: Research shows that people are not interested in
inflight food so ticket prices reduced and this was given as an option.
• Positioning based on associated benefits: Waterfront or beach bungalow
accommodation
• Positioning based on quality of service: star ratings for accommodation

Positioning: Example
A company representing luxury products will only confuse (as probably alienate)
their customers if they introduce a cheaper range – this undermines the perception
of exclusivity. Another example is Jetstar versus Qantas – while Jetstar is owned by
Qantas, it has been identified that there are 2 distinct markets Qantas would like to
cater for. In hotels, compare the thoughts of consumers between Sofitel and Formula
1 hotels who are owned by Accor

Product differentiation
A positioning strategy that some firms use to distinguish their products from those of
competitors.
Sometimes this is referred to as the Unique Selling Point (USP)

Perceptual mapping
A means of displaying or graphing, in two or more dimensions, the location of
products, brands or groups of products in customers’ minds.

Perceptual mapping – Levi’s
High price
Low price
Classic
Designer
Old product
New product
Vintage
Red Line
Silver Tab
Slates
Dockers
Premium
Dockers
Classics
501
Red Tab
Basics
Red Tab
Dry Goods
L2
Red Tab
Elesco

Positioning bases
These are other attributes that can be used on a positioning map to analyse different
companies and products. Remember to choose attributes that are relevant and will
give insight.
• Attribute
• Price and quality
• Use or application
• Product user
• Product class
• Competitor

Why use a positioning map?
Many larger companies use positioning maps to identify key strategies:
• Gaps in the market that can be identified to create new products for
• Identify where you can place line extension to limit cannibalisation
• Understand why some products are not working/selling
• Attributes that you communicate to consumers about your product are not clear
• You are trying to communicate to consumers that there are too many attributes that this
product is trying to be

Marketing strategies
There are a number of commonly used marketing strategies. They may refer to the
type(s) of target market a company has elected to pursue or they may refer to the
elements of the marketing mix and/or brand positioning. Sometimes contingency
planning is also included in the strategic planning.
The following slides will go in to the different strategies that companies can use.

Market aggregation
 Mass marketing using a single marketing mix to reach as many customers as
possible i.e. trying to be all things to all people (generalists). For example, Qantas
Holidays targets the broad community and appeals to a wide range of consumers.
It is a fairly generic product, perceived as good quality, value for money, safe, etc
and is patronised by couples, families, and older people over a broad segment of
the population. Whilst they do provide some luxury product, they do not in any way
appeal to the adventure or off-the-beaten-track type markets.
 Compared to the Travel Corporation who have the brands of Contiki, Trafalgar,
AAT Kings and Busabout appealing to a variety of different markets.

Single segment target market strategy
 The goal of this strategy is to out-compete all other tourism businesses for a
specific segment i.e. Contiki Tours is geared towards active, social 18-35 year olds
and provides a product specifically tailored to this market. They successfully out-
compete all other product aimed at this target market. They have selected one
specific target market and developed one marketing mix to reach this single
segment.

Concentrated marketing strategy
 This strategy is similar to the single target market strategy except a few additional
target markets are pursued. P & O originally targeted only couples (of all ages) for
their Pacific cruises. They later expanded this to include young singles (friendly
fours etc) and a big emphasis of families with children and seniors market
 Another example might be a conference dealing with taxation and small business
might also target accountants, academics and owner/operators.

Full coverage marketing strategy
Is when two or more different groups of potential customers are identified as target
market segments. A separate marketing mix (4 P’s) is designed to reach each
segment. A company will frequently develop a different variety of the basic product
for each segment and/or tailor separate promotional programmes for each segment.
For example, a local festival may see its target markets as all demographic groups in
various life stages (e.g. families with children). Additionally it may see the need to
cater for specific ethnic groups. To attract these groups, its programme will include
elements capable of meeting the needs of each of them. Additionally it will access
each of the target groups by different (but sometimes overlapping) promotional
efforts.
Pricing may also differ between groups with, for example, discounted prices for
families and retired couples. Trafalgar Tours offers a ‘Cost Saver’ product and also a
21-38 year old product. The products are very similar, but the products are marketed
in different ways to the targeted groups. Within the Contiki brand this also can be
seen with the offering of hotel tours, cabin and camping tours.

Creating a unique image
There are several ways of creating a unique image in the customers’ mind.
 Positioning on business attributes e.g. on-line facilities
 Positioning on benefits, problem solution or needs e.g. This conference is the only one at
which you will be able to hear from all Commonwealth Government departments involved in
implementing the new XYZ legislation.
 Position for a specific user category e.g. a puppet festival that seeks to target only families, an
agricultural exhibition that targets farmers, snowboarding holidays.
 Positioning against another business e.g. a convention which compares its programme to
another in an effort to prove that it offers better value for money/time spent.
 Positioning by product class dissociation. This strategy involves a tourism business trying to
make it appear significantly different from all competitors e.g. a trade fair may focus on the fact
that it has far more buyers than any other similar event. Club Med offers all inclusive packages
(accommodation, all meals and most activities) – their villages are unique.

Ensure marketing strategies meet legal and
ethical constraints
Business might have to follow or take into account the below:
• Restraint on the language and images that you use when communicating
internally and externally
• Licensing requirements for some businesses, especially those that have to follow
head office requirements
• Safety and risk factors – e.g recently a client died on a cruise ship that became
victim of a drug scene on board ship. This results in loss of business for the
cruise ship and bad publicity.

References
Marketing, Core Concepts and Applications 2nd Asia Pacific Edition; Elliot, Rundle-
Thiele, Waller, Paladino; Wiley, 2008

Develop Marketing Strategies

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