Transcript MM01 elearning class 3

Marketing Strategy Planning Process
Narrowing down to focused strategy with screening criteria
Customers
Company
S.
W.
O.
T.
Segmentation
& Targeting
Product
Place
Target
Market
Differentiation
& Positioning
Price
Promo
Competitors
External
Exhibit
3-1
3-3
Market Environment
1
What is Market Segmentation?
Market segmentation: The act of dividing a
market into smaller groups of buyers with
distinct needs, characteristics, or behaviors
who might require separate products
and/or marketing mixes.
2
Market Segmentation
B. Product-market showing
six segments
Status dimension
Status dimension
A. Product-market showing
three segments
Dependability dimension
Dependability dimension
Exhibit 3-6
3-9
3
Bases for Segmentation
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Sociocultural Segmentation
Usage-Situation Segmentation
Hybrid Segmentation Approaches
4
Market Segmentation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Region
Southwest, Northeast
City Size
Major metropolitan cities, small cities, towns(Tire1,II,III
Density of area
Urban, suburban, rural
Climate
Temperate, hot, humid, rainy
Demographic Segmentation
Age
Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Sex
Male, female
Marital status
Single, married, divorced, living together, widowed
Income
Under Rs25,000, Rs25,000-Rs34,999, Rs35,000Rs49,999, Rs50,000-Rs74,999, Rs75,000-Rs 99,999,
Rs100,000
overhigh school graduate, some college,
Education
Some high and
school,
college graduate, postgraduate
Occupation
Professional, blue-collar, white-collar, agricultural,
military, own business
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Table 3.2, continued
SEGMENTATION
SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Needs-motivation
Shelter, safety, security, affection, sense of self-worth
Personality
Extroverts, novelty seeker, aggressives, low dogmatics
Perception
Low-risk, moderate-risk, high-risk
Learning-involvement
Low-involvement, high-involvement
Attitudes
Positive attitude, negative attitude
Psychographic
(Lifestyle) Segmentation
Economy-minded, couch potatoes, outdoors enthusiasts,
status seekers
Sociocultural Segmentation
Cultures
Gujrati, Marathi,Punjabi,Bengali,
Religion
Hindu,Muslim,Christan,Sikh
Subcultures (Race/ethnic)
Brahmin, Kshatriya,Baniya
Social class
Lower, middle, upper
Family life cycle
Bachelors, young married, full nesters, empty nesters
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SEGMENTATION BAS
SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Usage rate
Heavy users, medium users, light users, non users
Awareness status
Unaware, aware, interested, enthusiastic
Brand loyalty
None, some, strong
Use-Situation Segmentation
Time
Leisure, work, rush, morning, night
Objective
Personal, gift, snack, fun, achievement
Location
Home, work, friend’s home, in-store
Person
Self, family members, friends, boss, peers
Benefit Segmentation
Convenience, social acceptance, long lasting, economy,
value-for-the-money
Hybrid Segmentation
Demographic/
Psychographics
Geodemographics
SRI VALSTM
Combination of demographic and psychographic profiles
of consumer segments profiles
“Money and Brains,” “Black Enterprise,” “Old Yankee
Rows,” “Downtown Dixie-Style”
Actualizer, fulfilled, believer, achiever, striver,
experiencer, maker, struggler
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Market-Oriented Approaches
A segmenter
The
Strategy
3-10
Using single target
market approach—
can aim at one
submarket with one
marketing mix
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Market-Oriented Approaches
A segmenter
Strategy
One
Strategy
Three
Using multiple target
market approach—
can aim at two or
more submarkets
with different
marketing mixes
Strategy
Two
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Step 2. Market Targeting
Market Coverage Strategies
Company
Marketing
Mix
Market
A. Undifferentiated Marketing
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 1
Segment 2
Segment 3
B. Differentiated Marketing
Company
Marketing
Mix
Segment 1
Segment 2
Segment 3
C. Concentrated Marketing
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Step 2. Market Targeting
Choosing a Market-Coverage Strategy
Company
Resources
Product
Variability
Product’s Stage
in the Product Life Cycle
Market
Variability
Competitors’
Marketing Strategies
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Five Patterns of Target Market
Selection
Single - Segment Specialization
A firm selects one segments in the market and
makes one product for them .Woodland shoes
M1
M2
M3
P1
P2
P3
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Five Patterns of Target Market
Selection
Selective Specialization
A firm selects a number of segments, each
objectively attractive and appropriate.
M1
M2
M3
P1
P2
P3
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Product Specialization
The firm makes a certain product that it sells to
several different market segments.
M1
M2
M3
P1
P2
P3
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Market Specialization
The firm concentrates on serving many needs of a
particular customer group.
M1
M2
M3
P1
P2
P3
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Full Market Coverage
The firm attempts to serve all customer groups with
all the products they might need. Only very large
firms can attempt to do that
M1
M2
M3
P1
P2
P3
P= Product
M= Market
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Positioning Strategy
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Step 3. Choosing a Positioning
Strategy
Step 1. Identifying
Possible Competitive
Advantages
Step 2. Selecting the
Right Competitive
Advantage
Step 3. Communicating
and Delivering the
Chosen Position
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Step 3. Positioning for Competitive
Advantage
Product’s Position - the place the product occupies in
consumers’ minds relative to competing products; i.e.
Volvo positions on “safety”.
Marketers must:
 Plan positions to give products the greatest
advantage
 Develop marketing mixes to create planned
positions
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Step 3. Positioning for Competitive
Advantage: Strategies
Product
Class
Away from
Competitors
Product
Attributes
Benefits
Offered
G
H
C
A
Against a
Competitor
D
E
B
F
Usage
Occasions
Users
20
Developing Competitive
Differentiation
Product
Service
Areas for Competitive
Differentiation
Personnel
Image
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Identifying Possible Competitive Advantages
Product
Differentiation
(e.g., consistency,
durability, reliability,
repairability)
Services
Differentiation
(e.g., speed,
convenience, careful
delivery)
Channel
Differentiation
Image
Differentiation
(e.g., convey benefits
and positioning)
People
Differentiation
(e.g., hiring, training
better people than
competitors)
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Selecting the Right Competitive
Advantages
Important
Profitable
Affordable
Preemptive
Criteria
for
Determining
Which
Differences
to
Promote
Distinctive
Superior
Communicable
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Positioning:
On what does
Volvo position?
What about:
•Saab?
•Lexus?
Click or press spacebar to return.
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Communicating and Delivering the
Chosen Position
Company must take strong steps to deliver and
communicate the desired position to
target consumers.
The marketing mix efforts must support the
positioning strategy.
Must monitor and adapt the position over time
to match changes in consumer needs and
competitors’ strategies.
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Positioning of Different Bar Soaps
High
moisturizing
• Pears
• LUX International
7
4
• Cinthol
• Dove
2
5
Santoor
• Lux
Nondeodorant
8
Deodorant
3
1
“Product Space”
3-14
•Medimix
Representing Consumers’
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Perception for Different Brands of
Bar Soap
Low
moisturizing
• Margo
• Lifebuoy
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Positioning Errors
Underpositioning:
 Failing to really position the company at all.
Overpositioning:
 Giving buyers too narrow a picture of the
company.
Confused Positioning:
 Leaving buyers with a confused image of a
company.
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Rest Stop: Reviewing the Concepts
Define the three steps of target marketing: market
segmentation, market targeting, and market
positioning.
List and discuss the major bases for segmenting
consumer and business markets.
Explain how companies identify attractive market
segments and choose a target marketing
strategy.
Discuss how companies position their products
for maximum competitive advantage in the
marketplace.
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NEW PRODUCT DEVELOPMENT
Explain how companies find and develop newproduct ideas.
List and define the steps in the new-product
development process.
Describe the stages of the product life cycle.
Describe how marketing strategies change
during the product’s life cycle.
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NEW PRODUCT
DEVELOPMENT
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New-Product Development Strategy
Strategies for Obtaining New-Product Ideas
Acquisition of:
New Products:
Companies
Original Products
Patents
Improvements
Licenses
Modifications
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New-Product Failures
Only 10% of new products are still on the market and
profitable after 3 years.
Failure rate for industrial products is as high as 30%.
Why?
 Overestimation of market size
 Design problems
 Incorrectly positioned, priced, or advertised
 Pushed despite poor marketing research findings
 Development costs
 Competition
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Major Stages in New-Product
Development
34
New-Product Development Process
Idea
Generation
Ideas from:
Customers
and users
Marketing
research
Competitors
Other
markets
Company
people
Intermediaries
Screening
Idea
Evaluation
Strengths
and
weaknesses
Fit with
objectives
Market
trends
Rough ROI
estimate
Concept
testing
Customer
reactions
Rough
estimates
of cost,
sales,
profits
Development
R&D
Develop
model or
service
prototype
Test
marketing
mix
Revise plans
as needed
ROI estimate
Commercial
-ization
Finalize
product and
marketing
plan
Start
production
and
marketing
“Roll out” in
select
markets
Final ROI
estimate
35
Flow of Ideas and Product
Company Employees
Customers
Competitors
Distributors
Suppliers
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Idea Screening
Process to spot good ideas and drop poor ones.
Develop system to estimate: market size, product
price, development time and costs,
manufacturing costs, and rate of return.
Evaluate these findings against set of company
criteria for new products.
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Concept Development and Testing
Product Idea: idea for a possible product that the
company can see itself offering.
Product Concept: detailed version of the idea stated in
meaningful consumer terms.
Product Image: the way consumers perceive an actual
or potential product.
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Marketing Strategy Development
Part One Describes:
The Target Market
Planned Product Positioning
Sales, Market Share, & Profit Goals
Part Two Outlines the First-Year’s:
Product’s Planned Price
Distribution
Marketing Budget
Part Three Describes Long-Run:
Sales & Profit Goals
Marketing Mix Strategy
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Business Analysis
Involves a review of the
sales, costs, and profit
projections to assess fit with
company objectives.
If yes, move to the product
development phase.
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Product Development
Develop concept into
physical product
Calls for large jump in
investment
Prototypes are made
Prototype must have
correct physical features
and convey psychological
characteristics
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Test Marketing
Product and program introduced in more realistic
market setting.
Not needed for all products.
Can be expensive and time consuming, but better
than making major marketing mistake.
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Test Marketing
Nokia test-marketed its new N-Gage cell phone/mobile game player extensively
before introducing it worldwide.
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Commercialization
Must decide on timing (i.e., when to introduce the
product).
Must decide on where to introduce the product (e.g.,
single location, state, region, nationally,
internationally).
Must develop a market rollout plan.
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Organizing New-Product Development
Sequential Approach: each stage completed before
moving to next phase of the project.
Simultaneous Approach: Cross-functional teams
work through overlapping steps to save time and
increase effectiveness.
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THEORY OF DIFFUSION OF A NEW PRODUCT
21/2 %
INNOVATORS
131/2%
EARLY
ADOPTERS
34%
EARLY
MAJORITY
34%
LATE
MAJORITY
16%
LAGGARDS
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THE CONSUMER ADOPTIONPROCESS
(STAGES IN THE ADOPTION PROCESS )
Awareness : The consumer becomes aware of the
innovation but lacks information about it.
Interest : The consumer is stimulated to seek
information about the innovation.
Evaluation : The consumer considers whether to
try the innovation.
Trial : The consumer tries the innovation to
improve his or her estimate of its value.
Adoption : The consumer decides to make full
and regular use of the innovation.
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