ACCOUNTANCY, BUSINESS, and - improve user experience

MANAGEMENT (ABM – 11) - craft a marketing strategy (to attract quality

The Marketing Environment leads)
……………………………
…………………. - improves conversion rates
A good grasp of you marketing environment helps to;
CHAPTER III – MARKET OPPORTUNITY  Identify opportunities – understand market Lean market research can help you became more…
ANALYSIS AND CONSUMER ANALYSIS environment  Efficient – it gets you closer to your customer,
 Strategic Marketing Versus Tactical Marketing  Identify threats – studying market environment faster.
 The Marketing Environment  Manage changes – monitoring market  Cost-effective – no need to hire an expensive
 Marketing Research environment marketing firm to get things started.
 Consumer and Business Markets  Competitive – quick, powerful insights can place
 Marketing Segmentation, Market Environment divide into two factors your products on the cutting edge.
Market Targeting, and - INTERNAL FACTORS – controllable
Market Positioning (STP) - EXTERNAL FACTORS – micromarketing “whoever gets closer to the customer wins” –
-------------------------------------------------------------------------- environment Bernadette Jiwa (founder, the Right Company)
Strategic Marketing Versus Tactical - macromarketing environment
Types of Market Research (methods)
Marketing
MICRO-MARKETING ENVIRONMENT
……………………………………………………………
“company issue” QUALITTAIVE QUANTITATIVE
…….
- the supplier
- the resellers METHODS METHODS
STRATEGIC MARKETING - the customers - determining customer - process of collecting
- focused on your company’s goal - competition motivation through: large amounts of data
- combines; market knowledge & customer behavior - the general public close observation through:
- outlines what you are trying to achieve (typically in a small - surveys
(understanding customers) MACRO-MARKETING ENVIRONMENT group or face-to-face - questionnaires and
“national issue” encounter.) - polling method
TACTICAL MARKETING *PESTLE - Political factor
- just like ‘strategy’ - Economic factor
- covers how you will try to achieve - Social and Demographic factor * Qualitative Market Research …
(what actions will serve the strategy) - Technological advancement factor - Focus Group Discussion (FGD) – group with 7-9 per
(execute of marketing plan) - Legal and regulatory factor batch, based on pre-determined criteria
- Environmental factor - In-depth Interview (IDI) – done individually
STRATEGY VS TACTICS
Marketing Research FGDs IDIs
- planning - doing Number of
…………………………………………. participants 7-9 per batch Individual
- large scale - smaller scale  a set of techniques to gather information and better
understand a company’s target market. Advantages - share experience - privacy
- why? - how?  business use this information to: - build from others - not
- design better products influenced by
- difficult to copy - easy to copy

- long time frame - short time frame

 other opinion Characteristics of Consumer Markets
- follow up  Demographic Characteristics GEOGRAPHIC CHARACTERISTICS
answers  Psychographic Characteristics  These geographic characteristics are often based on
- discuss with  Behavioralistic Characteristics market size, region, population density and even
strangers in the  Geographic Characteristics climate.
- more time-
room.  A small retailer may find opportunities in a small
consuming
Disadvantage - influenced by DEMOGRAPHIC CHARACTERISTICS market in which larger competitors have no interest.
-inability to
s opinions of others  Characteristics of consumer markets based on  Companies that sell woolen clothes will likely sell
share
- inability to demographics include differences in gender, age, more products in winter
experience
follow up ethnic background, income, occupation, education, climates……………………………
individual replies household size, religion, generation, nationality and
even social class. BUSINESS MARKETS
 Companies often identify these demographic
Consumer and Business Markets characteristics through market research surveys.  Business market refers to all those organizations
……………….  Companies can then target their advertising towards that purchase goods or services for the purpose of
these demographic groups. utilization in the manufacturing of other products or
CONSUMER MARKETS For example, a new cell phone may be targeted services.
toward 18-24 years old with incomes between 25,  The wholesaling & retailing firms are also included
 Consumer market refers to markets where people 000 – 50, 000. in the category of business market.
purchase products for consumption and are not
meant for further sale. PSYCHOGRAPHIC CHARACTERISTICS Characteristics of Business Market
 Each time a consumer purchases a commodity for  Consumer market characteristics can also be  Market Structure & Demand
his own usage he is participating in a consumer psychographic in nature. Psychographic  Nature of buying unit
market. characteristics of consumers include interests,  Decisions process
 In consumer market purchasers make their own activities, opinions, values and attitudes.
decisions to purchase the products and these  Opinions and attitudes can be both specific or MARKET STRUCTURE & DEMAND
products can be used for personal use or can be general.  There are relatively large types of business buyer.
shared with others.  A company may better understand consumer  It should also be noted that demand for the business
 Primarily there are four types of consumer markets: opinions and attitudes after conducting a focus markets and business products also tends to
 Food and beverages products group, and can use that information to advertising fluctuate, which only implies that the demand for
 Retail products or marketing campaigns. business market products can change relatively
 Consumer products quickly that the demand for consumer goods or
 Transportation products BEHAVIORALISTIC CHARACTERISTICS services.
 Marketing plays an important role in consumer  Behavioralistic characteristics of consumer markets
markets by influencing customer’s preferences and include product usage rates, brand loyalty, user status or
purchasing decisions. how long they have been a customer. NATURE OF BUYING UNIT
 Brand loyalty of consumer plays a significant role  Companies like to know how often their consumers visit
 This is the other characteristic that distinguishes the
in consumer markets. their restaurants, stores or use their products.
 Company marketing departments usually try to
difference between consumer markets and business
distinguish between heavy, medium and light users, markets.
whom they can then target with advertising.
 Participants in the business purchase tend to buy  Many customers,  Fewer customers Develop
Identify bases Develop
more and there are more participants, on the other geographically often geographically measure of
for segmenting positioning for
hand, participants in the consumer purchase are dispersed. concentrated. segment
the market target segments
often less.  Smaller amounts of  Larger amount of attractiveness
money involved money involved Develop a
Develop
DECISIONS PROCESS  Shorter decision  Longer decision Select target marketing mix
segment
 The decisions revolving around the business market cycles cycles segments for each
profiles
are somewhat complex than decisions made by the  More reliance on  More reliance on segment
consumer markets. This is primarily because of the mass marketing personal selling
intensive process that involves technical and  Less rigid product  More rigid product MARKET SEGMENTATION
economic considerations standard standard  Dividing a market into smaller groups of
buyers on the basis of needs, characteristics or
TYPES OF BUSINESS MARKETS Marketing Segmentation, behavior who might require separate products
Market Targeting, and or marketing mixes.
 Business-to-Business Market Market Positioning (STP)
The business-to-business market has a focus on ………………………………… Segmenting Consumer Markets
products, goods and services that are typically sold
to other businesses, rather than direct to consumers. What is STP in marketing? Major Segmentation
It includes:
STP marketing (Segmentation Targeting, and Variables
Positioning) is a three-step marketing framework. With
Industrial Market – are typically defined by the
the STP process,
sale of industrial or production products, good and
 you segment your market, Geographic Behavioral
services to other business industries. These are raw
 target your customers, and segmentation segmentation
materials like steel, glass, wood etc.
 position your offering to each segment.
Financial Services – can include banking,
insurance, commercial credit and lending, tax What are the 3 steps involved in STP
planning, investments etc. Demographic
marketing? Psychographic
segmentation
The three main steps within STP are: segmentation
Government Markets – in most countries,  Segmenting your market (segmentation),
government organizations are a major buyer of  identifying your target market (Targeting) and
goods and services.  deciding on how you will position your brand
(positioning)

DIFFERENCE BETWEEN CONSUMER STEPS IN MARKET SEGMENTATION,

MARKET & BUSINESS MARKET GEOGRAPHIC SEGMENTATION
TARGETING AND POSITIONING
Dividing a market into different geographical units.
MARKET MARKET
CONSUMER BUSINESS TARGET  Country
SEGMENTAT POSITIONIN
MARKETING  City
MARKET MARKET ION G
 Density (urban, suburban, rural)
  Climate (northern, southern) - general purchase policies  Company objectives and resources
- purchasing criteria
DEMOGRAPHIC SEGMENTATION - urgency SELECTING MARKET SEGMENTS
Situational
Dividing the market into groups based on - specific applications
factors
demographic variables. - size of order Target marketing strategies / Market coverage strategies
 Age Personal - buyer-seller similarity / Levels of market segments:
 Gender characteristi - attitude toward risks
 Family life cycle cs - loyalty
 Income Undifferentiated Targeting
 Occupation SEGMENTING INTERNATIONAL MARKET (Mass) marketing broadly
 Religion

PSYCHOGRAPHIC SEGMENTATION Major Segmentation Differentiated

Dividing the market into groups based on social class, Variables (segmented)
lifestyle and personality. marketing
 Social class
 Lifestyle
 Personality Geographic Behavioral
location factors Concentrated
(niche)
BEHAVIORAL SEGMENTATION
marketing
Dividing the market into groups based on consumer
knowledge, attitude, use or response to a product.
Demographic Psychographic
 Occasions
factors legal factors Targeting
 Benefits Micro-marketing
 User status narrowly
 Usage rate TARGET MARKETING
 Loyalty status
 The process of evaluating each market segment’s
SEGMENTING BUSINESS MARKETS
attractiveness and selecting one or more segments
Major segmentation variables to enter.
- industry
Demographic  UNDIFFERENTIATED (MASS)
- company size
s EVALUATING MARKET SEGMENTS
- locations MARKETING
- technology  Segment size and growth A market coverage strategy in which a firm decides
Operating  Major structural factors affecting segment
- user-nonuser status to ignore market segment differences and go after
variables attractiveness
- customer capabilities the whole market with one offer.
Purchasing - purchasing function organization  Competitors
approaches - power structure  Substitute products
 Power of buyers Company
- nature of existing relationships
 Powerful sellers Marketing Mix Market
  COMPETITOR’S MARKETING
STRATEGIES
Segment 1
 DIFFERENTIATED (SEGMENTED)
POSITIONING FOR COMPETITIVE
MARKETING Company
A market coverage strategy in which a firm decides ADVANTAGE
Marketing Segment 1
to target several market segments and design Mix
separate offers for each.  MARKET POSITIONING – is the process of
Segment 1 arranging for a product to occupy a clear,
distinctive and desirable place relative to competing
Company products in the minds of target consumers.
Segment 1
Marketing Mix 1 Benefits of niche marketing over mass/segment
marketing:  PRODUCT’S POSITION – is the way the product
- Niches are smaller and normally attract only one
is defined by consumers on important attributes –
Company or a few competitors.
Segment 2 the place the product occupies in consumers’ minds
Marketing Mix 2 - Marketers understand their consumers ‘needs so
well that their customers willingly pay a price relative to competing products.
premium.
- It offers smaller companies an opportunity to
Company CHOOSING A POSITIONING STRATEGY
Segment 3 compete by focusing their limited resources on
Marketing Mix 3 serving niches that may be unimportant to or (3 steps)
overlooked by larger competitors.
1. Identifying possible competitive advantages:
Benefits of segment marketing over mass marketing-
 MICROMARKETING
A market coverage strategy in which a firm tailor Competitive advantage is an advantage over
o The company can market more efficiently
its products and marketing programs to suit the competitors gained by offering consumers greater
toward the consumers that it can serve value, either through lower prices or by providing more
best and most profitably. tastes of specific individuals and locations.
benefits that justify higher prices.
o The company can market effectively by Positioning on specific product features
Micromarketing includes –
fine-tuning its marketing mixes to the
 Local marketing – cities, neighborhoods and
needs of carefully defined segments. The most common basis for constructing a product
specific stores
o The company may face fewer positioning strategy are –
 Individual marketing – mass customization
competitors.
 Positioning on specific product features
CHOOSEING A MARKET-COVERAGE
 CONCENTRATED (NICHE)  Positioning on specific benefits, needs or
STRATEGY solution
MARKETING
 Positioning on specific use categories
A market coverage strategy in which a firm goes
 COMPANY RESOURCES  Positioning on specific usage occasions
after a large share of one or a few submarkets with
 PRODUCT VARIABILITY  Positioning on a reason to choose an offering
distinctive traits that may seek a special
 PRODUCT’S LIFE-CYCLE STAGE over the competition
combination of benefits.
 MARKET VARIABILITY  Positioning against another product
  Positioning by cultural symbols

2. Choosing the right competitive advantages:

How many differences to promote?

Which differences to promote?

The differences must have the following criteria -

 Important
 Distinctive
 Superior
 Communicable
 Preemptive
 Affordable
 Profitable

3. Selecting an overall positioning strategy: