Marketing Tutorials PDF

Most companies have moved away from mass marketing and towards target marketing Companies must design customer-driven marketing strategies that build the right relationships with the right customers A market is a group of people (individuals or organisations) that have needs for products and have th...

Most companies have moved away from mass marketing and towards target marketing Companies must design customer-driven marketing strategies that build the right relationships with the right customers A market is a group of people (individuals or organisations) that have needs for products and have the ability, willingness and authority to purchase such products Conditions for successful market segmentation: Customer needs for the product must be heterogeneous Segments must be identifiable and divisible Different market segments must be comparable in terms of sales potential, costs and profits At least one segment must have enough profit potential Guaranteed access to reach the chosen segment Segmenting consumer market: Psychographic segmentation - refers to dividing a market into different segments based on social class, lifestyle or personality characteristics Behavioural segmentation - refers to dividing a market into segments based on consumer knowledge, attitudes uses or responses to a product Using multiple segmentation bases - marketers rarely limit their segmentation analysis to only one or few variable 1. Why would marketers use multiple segmentation bases? When might they use only one or a few variables? Demographic variables: Geographic segmentation Psychographic segmentation: Market segmentation based on psychographic variables such as personality, motives and lifestyle Psychographic variables can be used independently to segment a market but are more commonly combined with other types of segmentation variables Behavioural segmentation: Market segmentation based on behaviouristic variables such as ○ Usage rate, usage/application type and benefit sought ○ End use, brand loyalty, price sensitivity Benefit segmentation - dividing a market according to the benefits that customer seek from the product ○ If used, the segment must be identifiable, recognisable and accessible to marketing efforts International market segmentation Companies can segment international markets using one or a combination of several variables, including ○ Geographic location ○ Economic factors ○ Political and legal factors ○ Cultural factors Marketers also use intermarket segmentation - forming segments of consumers who have similar needs and buying behaviour even though they are located in different countries Business market segmentation: Business marketers use many of the same variables as consumer markets to segment their markets Business marketers also use some additional variables 1. Name some of the additional variables (compared to consumer markets) that business marketers use to segment their markets. Requirements for effective segmentation There are many ways to segment a market, but not all segmentations are effective To be useful, market segments must be ○ Measurable ○ Accessible ○ Substantial ○ Differentiable ○ Actionable Selecting target market segments A target market is a set of buyers sharing common needs or characteristics that the company decides to serve Evaluating market segments In evaluating different market segments, a firm must look at three factors ○ Segment size and growth ○ Segment structural attractiveness ○ Company objectives and resources Undifferentiated marketing Is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer Differentiated marketing Firm targets several market segments and designs separate offers for each Niche marketing Concentrated (niche) marketing - company goes after a large share of one or a few segments or niches Micromarketing Is the practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments - includes local marketing a individual market Choosing a targeting strategy: Companies need to consider many factors when choosing a market-targeting strategy: ○ Company resources ○ ○ ○ ○ Product variability Product life-cycle stage Market variability Competitors marketing strategies Socially responsible target marketing Socially responsible target marketing should consider: ○ Targeting vulnerable or disadvantaged consumers ○ Marketing controversial or potentially harmful products ○ Marketing efforts directed towards children ○ Use of the internet and other targeted direct media ○ Responsible advertising and advertising codes of conduct and guidelines Socially responsible marketing calls for segmentation and targeting the serve the interests of both the company and those being targeted Target Market Selection Process: Differentiation and positioning Product position is the complex set of perception, impressions and feelings that consumers have for the product compared with competing products The product position must resonate with each of the segments the company chooses to target Product positioning Creating and maintain a certain concept of a product in customers minds A products position is the result of customers perceptions of the product attributes relative to those of competing brands Marketers create perceptual maps to analyse product positions Perceptual maps consider two primary evaluative criteria Choosing a differentiation and positioning strategy The differentiation and positioning task consists of three steps: ○ Identifying a set of differentiating competitive advantages upon which to build a position ○ Choosing the right competitive advantages ○ Selecting an overall positioning strategy The company must then effectively communicate and deliver the chosen position to the market Identifying possible value differences and competitive advantages Competitive advantage is the advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices Differentiation and positioning Choosing the right competitive advantage ○ A different that is worth establishing satisfies the following criteria: Important - it delivers a highly valued benefit to target buyers Distinctive - competitors do not offer the difference or the company can offer it in a more distinctive way Superior - the difference is superior to other ways in which customers might obtain the same benefit Communicable - the difference is viable to buyers Pre-emptive - competitors cannot easily copy the difference Affordable - buyers can afford to pay for the difference Profitable- the company can introduce the difference profitably 1. Name a product that you think has a clear competitive advantage. What is the competitive advantage and why does it work? Selecting an overall positional strategy Value proposition is the full positioning of a brand - the full mix of benefits upon which it is positioned There are five winning value propositions upon which companies can position their products: ○ More for more ○ More for the same ○ The same for less ○ Less for much less ○ More for less Developing a positioning statement: A positioning statement is a a statement that summarises company or brand positioning It takes this form; ○ To (target segment and need) our (brand) is (concept) that (point of difference) Communicating a delivering the chosen position ○ Once a company has built the desired position it must take care to maintain it through consistent performance and communication ○ The company must closely monitor and adapt the position over time to math changes in consumer needs and competitors strategies Product repositioning: A regular evaluation of current position of existing product is important Product repositioning may be required to strengthen market share and profitability Repositioning can be done through ○ Changing the product physically ○ Revising its proving and/or distribution strategy ○ Changing the product image targeting a different market