Transcript Document

Chapter 5
Marketing strategies
– target marketing,
product/brand
positioning and
marketing mix
Like many clichés, this one turns out to be true –
successful marketing does begin with effective
segmentation. The trick is simply using an
approach to segmentation that works both
analytically, and also practically, with your
customers and across your organization.
J. Barron and J. Hollingshead, ‘Making segmentation work’,
Marketing Management, vol. 11, issue 1,
January–February, 2002, p. 28.
Objectives
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By the end of this chapter, you should be
able to:
analyse a market to determine market
segments
determine which segments to pursue
analyse product/brand positions
determine product/brand positioning
strategies
determine overall marketing mix
strategies.
The strategic marketing
planning process
Situation
analysis
Problems &
opportunities
Marketing
objectives
Marketing
strategies
Budget
Implementation
Evaluation &
control
Marketing strategies
Three sets of interrelated
considerations:
1 Target market selection
2 Determination of
product/brand positioning
strategies
3 Development of marketing
mix strategies
An iterative process
Marketing strategies
Marketing objectives
Corporate objectives
• Financial objectives
Marketing objectives
• Performance
objectives
Higher-level strategies
• Business position
• Product-market strategies
Marketing mix strategies
• Target markets
• Consumer positioning
• Product strategies
• Pricing strategies
• Distribution strategies
• IMC strategies + additional
3Ps for service providers
• People, process management
and physical asset strategies
The marketing strategy
development process
Three sets of interrelated considerations
1 Target market selection
2 Determination of product/brand
positioning strategies
3 Development of marketing mix strategies
Target market selection
Target market selection is based on
market segmentation – the partitioning of
a market into segments of existing and
potential customers who have similar
characteristics and similar needs.
Alternative marketing mix
strategies
Differentiated
A number of market segments are
targeted with a customised
marketing mix strategy for each
segment.
Concentrated
A strategy for niche marketers
focusing on one market segment.
Micromarketing
Mass customisation – individuals
are targeted on a one-to-one
basis.
Undifferentiated
One marketing mix strategy
services the entire market.
Segmentation approaches –
consumer markets (1)
The 4Ws:
Who (they are)
What (they buy)
Where (they buy)
Why (they buy)
Segmentation approaches –
consumer markets (2)
The 4Ws:
Who
• Demographic
• Socioeconomic
• Stage of life
What and Where
• Lifestyle
• Psychographic
Why
Segmentation approaches –
consumer markets (3)
The 4Ws:
Who
What and Where
Why
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product category
brand
product category user
rate of new product
adoption
loyalty
price point
type of distribution outlet
geographic
geodemographic
Segmentation approaches –
consumer markets (4)
The 4Ws:
Who
What and Where
Why
• Benefit segmentation
Segmentation approaches –
business-to-business (B2B)
• Geographic
• Customer type – industry type/stature,
technology used, industry life-cycle stage,
product usage, company size or applications
• Benefit
• Other – such as personal characteristics;
buyer awareness of product category,
readiness to adopt new products, the extent to
which they are risk takers, or exposure to
particular media
Methods for segmentation (1)
Normative segmentation
A priori segmentation
Post hoc segmentation
Data mining
An econometric
approach that attempts
to determine buyer
similarities by analysing
elasticity coefficients,
marginal revenues and
response function
coefficients.
Methods for segmentation (2)
Normative segmentation
A priori segmentation
Post hoc segmentation
Data mining
Drawing on secondary
sources, the market is
segmented by
appropriate variables,
such as age, gender,
socio-economic status
or benefit sought.
Methods for segmentation (3)
Normative segmentation
A priori segmentation
Post hoc segmentation
Data mining
A market segmentation
study is conducted in order
to determine the attitudes,
perceptions, benefits sought
and product usage
information of a
representative sample of the
market. Individual
importance ratings are
clustered into person groups
by maximising in-group
similarities and betweengroup differences.
Methods for segmentation (4)
Normative segmentation
A priori segmentation
Post hoc segmentation
Data mining
Customer data is
analysed in order to
determine patterns and
relationships that can
form a meaningful basis
for segmenting the
organisation’s customer
base.
Determination of product/brand
positioning strategies (1)
Target market
selection
Determination of
product/brand
positioning strategies
Development of
marketing mix
strategies
The product
offering(s)
How to position
the product
offering(s)
Determination of product/brand
positioning strategies (2)
The product
offering(s)
How to position
the product
offering(s)
1 What product offerings
(existing and new) will
be required to service
the needs of each of
the targeted segments
(product line depth and
breadth decisions)?
2 Branding decisions –
individual or umbrella
branding?
Determination of product/brand
positioning strategies (3)
The product
offering(s)
How to position
the product
offering(s)
Brand positioning strategy –
four steps:
1 Determine the current
position of the brand and
its competitors.
2 Determine the ideal point
for the product category.
3 Determine whether to
continue or modify the
current positioning
strategy.
4 Develop a brandpositioning strategy based
on the core values of the
brand.
Determination of product/brand
positioning strategies (4)
The product
offering(s)
How to position
the product
offering(s)
Key positioning concepts
• Brand meaning – an
individual's subjective
perception and affective
reaction to stimuli such as
the product itself or
advertising.
• Brand association –
anything linked in memory
to a brand. This can be
either brand image or
brand position.
Determination of product/brand
positioning strategies (5)
The product
offering(s)
• Brand image – a set of
associations that are
meaningful to an
individual. The frame of
reference may be a
product attribute, a
product benefit or a
perceptual characteristic.
How to position
the product
offering(s)
• Brand position – a set of
associations arranged in a
way that the frame of
reference is the
competition.
Development of marketing mix
strategies
Target market
selection
Determination of
product/brand
positioning strategies
Development of
marketing mix
strategies
• Marketing mix decisions
flow on from market
segmentation and brand
positioning decisions.
• In a strategic marketing
plan these decisions are
fairly broad-based, ‘big
picture’ strategies,
involving 4P or 7P strategic
direction over a three to
five year time frame.
Market segmentation and
positioning
decision-making aids (1)
Perceptual maps
Pictures or maps of consumer
perceptions of a market or
product category:
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Mercedes
• BMW
Jaguar
• Alfa
• Lexus
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Conjoint analysis
Volvo
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Audi
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Saab
Honda
A research technique that shows
individuals make overall
judgements about brands or
products by considering together
two or more attributes.
Market segmentation and
positioning
decision-making aids (2)
Perceptual maps
Conjoint analysis
Two techniques:
Attribute rating method –
respondents are required to rate a
selection of potential brand
attributes. The data is analysed
either by factor analysis or multiple
discriminate analysis to produce a
perceptual map.
Overall similarity method –
respondents are required to assess
the degree of similarity or
dissimilarity between matched pairs
of competitive brands. The data is
analysed using multidimensional
scaling technology to map the
distance between brands.
Market segmentation and
positioning
decision-making aids (3)
Perceptual maps
Conjoint analysis
(CA)
A number of attributes are identified
and then sorted into bundles of two
or more, so that respondents can
conjointly rank or rate their
preferences, ranging from 'least
liked' to 'most liked'.
CA provides a basis for segmenting a
market into groups of people with
similar needs who are seeking
similar benefits for various products.
It is also a tool for developing brand
positioning strategies.
Suggestions for writing this
section
• Devote two to three pages to describing and
justifying the marketing mix strategies for each
market segment that is to be targeted.
• That is, define the target market (segmentation
descriptors), state the products/brands that are
to be targeted to this segment, the
product/brand positioning strategy, the product,
price, distribution and IMC strategies.
• Do this for each of the market segments to be
targeted.
• Then summarise these strategies in table form
and insert this table at the beginning of the
section (see next slide).
Summary of recommended
marketing mix strategies
Target market 1
Target market 2
Target market 3
Product/brand
positioning
Product/brand
positioning
Product/brand
positioning
Marketing mix:
Product
Price
Distribution
IMC
+ additional 3Ps for
service providers
Marketing mix:
Product
Price
Distribution
IMC
+ additional 3Ps for
service providers
Marketing mix:
Product
Price
Distribution
IMC
+ additional 3Ps for
service providers
And don’t forget …
In developing marketing mix strategies, you should
draw on those areas identified in the situation
analysis and the problems and opportunities
statement that required attention.
Examples:
• Improve distribution coverage – achieve X%
distribution by the year 2004 and Y% by 2005.
• Achieve X% level of customer service satisfaction
by the year 2004 and Y% by 2005.