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Marketing Strategy

Segmentation, Targeting and Positioning

The Tools of Marketing


Business Strategy Marketing Strategy Who to Serve How to Serve

Mission SBUs STP

Marketing Tactics and Programs


Pricing Policy
List prices Discounts and promotions Credit terms tc!

Product Policy
Length and depth o" line #uality $ssociated services Packaging%la&eling Design tc!

Promotional Policy

Place%Distri&ution Policy
'ntensity Terms Service tc!

Communication Mi( lements

the Offering

Business Strategy
A Business has customer groups (i.e. markets), customer needs, core offering

Three generic usiness strategies (Porter)! ". #$erall cost leadership %. &ifferentiation '. (ocus

Business )ro*th Strategies


(isting Markets (isting Products )ew Products Market Penetration Product &e$elopment )ew Markets Market &e$elopment &i$ersification

Marketing Strategy (STP)


+ Segmentation of customer groups (markets) + Selection of specific Target Markets + Positioning of core offering to each target market

The ,n$ironments
(A-T#.S S/AP01) PRIMARY &,MA1& + Cultural* Social and Demographic nvironment
+ Ma2or effect is on people3s and organi4ation3s willingness to buy certain kinds of products and ser$ices

+
+

conomic and Technological nvironments


0mpacts on people3s and organi4ation3s ability to buy

+
+ +

Political and Legal nvironments


0mpacts on the nature of practices used to dri$e primary and selecti$e demand May also shape primary demand for goods and ser$ices needed to comply *ith regulations

The ,n$ironments
(A-T#.S S/AP01) SELECTIVE &,MA1& + Competitive nvironment
+ + + 0mpacts on *hether *e can meet uyer needs etter than anyone else 0ncludes su stitutes Ma2or effect is on people3s and organi4ation3s choice of rands other than yours

+
+

Customer nvironment
Ma2or effect is on people3s and organi4ation3s choice of rands

+
+

Current Marketing Situation (i.e. the internal en$ironment)


Ma2or effect is on people3s and organi4ation3s choice of your rand o$er others

-ompetiti$e Assessment
+or ach Competitor* $ssess the "ollowing, Marketing Strategy + + + + + + + Target Market(s) Business Strategy )eneric Strategy Market Share 5ey Success (actors Share of Mind -ompetiti$e Ad$antage (Positioning) Marketing Mi( lements + + + + + + + + -ore #ffering(s) Product6Ser$ice 7uality Pricing -ommunication Media Personal Selling Methods &istri ution Methods 8ocation Post9sales ser$ice

Segmentation Scheme
-ore #ffering

Segment A

Segment B

Segment -

8e$el " 9 Base

Segment -."

Segment -.%

Segment -.'

8e$el % 9 Base

Segment -.'.i

Typical Bases, 9 &emographic 9 )eographic 9 Beha$ioral 9 Psychographic

Segment -.'.ii

A Sample
- a n a d ia n - h o c o la t e S e g m e n t a t io n M a p - i"tin g / id 0s T r e a t $ d u lt T re a t 12 3 4 5 . e "u e l

+ o rm a l
) e s tu re , a s te r - h r is t m a s

'n " o r m a l
/ a llo * e e n

. e w a r d %T r e a t
P e s te r S hut up P e r m is s i le S p o ilin g 5 S A M in d e r S u r p r is e m a r t ie s s t r o :s ; M M in is

P e rs o n a l S p o ilin g
M e T im e . e la < a t io n P e rs o n a l . e * a rd B a r a m ilk 6 . o lo 6 & o $ e re m e , g g s o u n ty e r is e s 6 P e p P le a s u r e (eel ) ood 0n

- u t + ill
M e a l . e p la c e m e n t / u n g ry

B o ( e d C h o c o la te s
8 a u ra S e c o rd S easonal

Seasonal

M M # B

r . B ig a r s 6 S n ic k e r s h / e n ry u t t e r fin g e r

'n d u l g e n c e

- a p + ill%S n a c k in g
e t* e e n M e a ls P e c k is h S m a ll S n a c k - r is p y - r u n c h = u n d e r a r 6 - r u n c h ie 5 it 5 a t 6 - o ffe e - r is p T * i<

A ( /

M e r o 6 M ir a g e la k e M -

The Segmentation )rid -onsumer Profiling


-ontents! + =ho uys>
+ + + + + =hat =here =hen =hy /o*

Assessment of -urrent Marketing Situation


+ Current marketing strategy assessment + Segmentation strategy + Target Markets + Positioning ; Branding + Marketing Mi< ,lements Sources o" competitive advantage Constraints + Budget + Technology + /uman factors + -hannels + Suppliers + Management, etc.

+ +

SMA.T # 2ecti$es
+ + + + + Specific Measura le Achie$a le .ealistic Timeline
The Marketing Plan A /ierarchy of # 2ecti$es #$erall Plan # 2ecti$es

0ndi$idual Segment # 2ecti$es Positioning # 2ecti$es

Tactical # 2ecti$es!
+Product # 2ecti$es +Pricing # 2ecti$es +Place # 2ecti$es +Promotion # 2ecti$es

0ntegrating Analysis *ith Planning


C9ST7M . $)$L8S'S Who B98S What* Where* When* How and Why Determine Basis o" Segmentation C7MP$)8 $)$L8S'S -iven your o&;ectives and resources < what can you do* "or whom* where and when= C7MP T'T7. $)$L8S'S Who 7++ .S What* Where* When* How and Why Determine Basis o" Di""erentiation

$SS SS M$./ T6C7MP$)8 +'T De"ine #uality and 'denti"y Segments 8ou Can Serve 1Targeting5

$SS SS P.7D9CT6C7MP$)8 +'T valuate .elative #uality and 'denti"y Competitors 8ou Can Beat 1Targeting : Positioning5

Alternati$es Segmentation Strategy


Segment $ Segment $ )iche $2 )iche $3 )iche $> )iche $2 )iche $3 )iche $>

Segment B

Segment B

Segment B

Segment B

Segment C Mass Market Multi6 Segment Strategy

Segment C Single Segment Strategy

Segment C Segment )iche Strategy

Segment C Mass Customi?ation Strategy

Targeting &ecision Matri<


Criteria 1+it5
Attracti$e? (it *ith gro*th and profit o 2ecti$es? (it *ith Mission? -ompetiti$e Ad$antage -ompany .esources

Weight
@@ @@ @@

Target Segment $

Target Segment B

Target Segment C

-onstraints? (it *ith Trends A elements affecting Primary &emand Profita le? Total

Positioning
+ The BdefinitionC, BplaceC, or BidentityC of a product in the minds of consumers, relati$e to competiti$e offerings. + Assumes
+ &ifferentiation

+ A positioning statement
+ To defined target segment + D is the rand of defined category + That uniEue selling proposition

Positioning -ompetiti$ely! Alternati$e Positioning Strategies


+ + + + + Product attri utes Benefits offered Usage occasions -lasses of users &irectly on competitor + Around competitor + Against product class

Positioning! The Unifying Theme for Marketing ,fforts


What the Customer -ets
s le sa s e6 ice Pr erv s
ry

D el

Brand identity 'mage

Level o" @uality

ive

Positioning .e"lects /ey lements o" Strategy /o* *e think the customer $ie*s the product /o* *e *ant the customer to think a out us =ho the customer sees as a su stitute for us =hat *e feel *e can do etter than the competition

What the Customer Wants

+eatures
Credit

Positioning Shapes Customer (pectations A BpromiseC to potential customers The reason they gi$e us trialF the standard *e must meet

'nstallation

W ar

ra n

"i ce k6o" Bac ices serv

Packaging

ty

$ssociated services

$ll Marketing lements Must .ein"orce the Positioning Positioning em odies the principle of market (#-US (ocus reEuires a concentration on a specific type of customer 0nconsistencies et*een marketing tools leads to a loss of efficiency and effecti$eness

-reating a Galue Proposition (Positioning)


+ Part 2, What We Do
+ + + + + (or =ho *ant #ur product is That features As measured y the target market the consumption problem
(*hat BneedC do you ser$e?)

our portion of the solution


(*hen do they think a out your class of product in connection *ith that need?)

key benefit provided


(*hat3s the one or t*o things you *ant them to remem er a out you?)

how the customer infers quality

+ Part 3, Why We Will Win


+ + + + Unlike #ur product pro$ides As supported y And protected y our main competitors key point(s) of difference what makes our difference possible
(*hy they should elie$e us>T#&AH)

why the competition cannot easily overcome it


(*hy they should elie$e us>T#M#..#=)

The role of the marketing mi<


Product Price Place Promotion Physical Evidence Process People Partnering

Target Customers

Marketing Strategy Decisions

Tactical Implementation

Customer Effects

Some &ecision Areas #rgani4ed y the (our Ps Product


Objectives Physical Goods Service Features Quality Level Accessories Installation Instructions Warranty Product Lines Packaging Branding

Place
Objectives hannel !y"e #arket $%"osure &inds o' #iddle(an &inds and Locations o' Stores )o* to )andle !rans"orting and Storing Service Levels +ecruiting #iddle(en #anaging hannels

Pro(otion
Objectives Blend Sales"eo"le , &ind , -u(ber , Selection , !raining , #otivation Advertising , !argets , &inds o' Ads , #edia !y"e , o"y !hrust , Who Pre"ares. Sales Pro(otion Publicity

Price
Objectives Fle%ibility Level over Product Li'e ycle Geogra"hic !er(s /iscounts Allo*ances

Some &ecision Areas #rgani4ed y the other Ps Phys0 $vidence


Objectives Facility /esign $1ui"(ent Signage $("loyee /ress Other tangibles , +e"orts , Bus0 ards , State(ents , Guarantees

Process
Objectives Flo* o' activities usto(er involve(ent -u(ber o' ste"s Queuing Pay(ent (ethods

Peo"le
Objectives )+ activities usto(er training usto(er education

Partnering
Objectives Loyalty "rogra(s Incentive "rogra(s Alliances -et*orking

Marketing Mi<
Target Segment $
Positioning Statement Product To Target Market A, D is the differentiated rand of category that offers>.. # 2ecti$es for Product Mi< 0tems Product Tactics to augment offering to fit *ith positioning # 2ecti$es for pricing Pricing tactics to fit *ith positioning # 2ecti$es for promotion Promotion tactics to fit *ith positioning # 2ecti$es for channels6place Tactics # 2ecti$es and tactics

Target Segment B

Price

Promotion Place Partnering Physical ,$idence@ Process@ People @

0mplementation
'mplementation Task Place full page ad$ertisement in -0# maga4ine .e9arrange *aiting area, purchase couches, .educe price of =idget in$entory to eliminate e<cess stock People Marketing Manager #ffice Manager Money I"J,JJJ Time Septem er, %JJ' #cto er %JJ' Control% valuation Track telephone calls and *e site $isits pre9 and post9ad$ertisement .e$ie* regular customer sur$eys to check satisfaction *ith *aiting area Store managers to re$ie* in$entory *eekly to determine if further price changes are needed

I"K,JJJ for ne* furniture and other chattels I'JJ for ne* price tags

Store Managers

1o$em er %JJ'

Budget
.evenue -ruise Passengers Total .evenue Aaria&le Costs Ser$ices Marketing Total Aaria&le Costs Contri&ution Margin +i(ed Costs 0ndirect -osts =ages #uantity "LMJ Worst Case 7&;ectives Best Case Price Total #uantity Price Total #uantity Price Total IKJJ INLJ,JJJ "OJO IKJJ IMJ',JJJ "OPJ IKJJ IMLK,JJJ IKJJ INLJ,JJJ IKJJ IMJ',JJJ IKJJ IMLK,JJJ "LMJ "LMJ I"JJ I"LM,JJJ I%J I%P,OJJ I"%J I"NN,OJJ I'MJ IKO%,LJJ "OJO "OJO I"JJ I"OJ,OJJ I%J I'%,"%J I"%J I"P%,N%J I'MJ IO"J,%MJ "OPJ "OPJ I"JJ I"OP,JJJ I%J I'',MJJ I"%J I%J%,MJJ I'MJ IOL%,%JJ

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)et Pro"it

+ Pro2ections of sales + 0nclude and note implementation costs + Sensiti$ity analysis

-ontrols
The Marketing Plan $ Hierarchy o" 7&;ectives
#$erall Plan # 2ecti$es
Metrics

0ndi$idual Segment # 2ecti$es

Method o" valuation

Timing and "re@uency o" valuation

.eaction Plans Contingencies

The .eport
+ + + +
+ +

0ntroduction (Background) -ase Pro lem(s), 0ssue(s) # 2ecti$es6&ecision -riteria Analysis


-urrent marketing situation 0dentification and analysis of alternati$es

+ +

Marketing Strategy6 .ecommendations 0mplementation Plan (Marketing Mi<)

Sources
&r. S. Armstrong, =harton &r. M. -unningham, 7ueen3s Mr. 5. =ong, 7ueen3s &r. S. Taylor, 7ueen3s 5otler and 5eller (%JJN), A (rame*ork for Marketing Management A ' rd ,dition, Pearson6Prentice /all Qeithaml, Bitner, and )remler (%JJK), Ser$ices Marketing A Lth ,dition, Mc)ra*9/ill The %%J" Team A S. Myrden, &. Stapleton, T. Rones