UNIT 5 Strategic Marketing PDF

UNIT-5-STRATEGIC-MARKETING.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No se...

UNIT-5-STRATEGIC-MARKETING.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 UNIT 5 STRATEGIC MARKETING: SEGMENTATION AND POSITIONING 1. INTRODUCTION Why do brands segment the market? It is difficult to serve a whole market. Buyers may be: - Too numerous - Too widely scattered. Geographically scattered; you cannot cover all the world because it is not efficient. In the countryside you don’t have good internet connection, because it is not profitable for the company. - Too varied in their needs and buying practice. Customers are very different → not all the consumers are the same, want the same things, behave the same way, etc. identify which are the customers you can provide better. Statistics: go in the middle (sell nothing), serve only one part of the market (hot, cold). Which segment is bigger? What is our strength? What is more profitable? Etc. A company must identify the parts of the market that it can serve best and most profitably. STP SEGMENTING: dividing the market in groups. Segmenting in the coffee example: you identify the segments (hot, cold). Only make sense if the next step is profitable. TARGETING: deciding what segment you want to serve. When you decide to go for one segment. Only targeting when you have already segmented. DIFFERENTIATION: making your value proposition different than the competition. I want my coffee to be organic. So many different options. POSITIONING: placing your value proposition/ brand in a specific part on the mind of your consumers. Position your brand so that the customers associate your brand with a specific characteristic(s) when they think about it. Select customers to serve Decide on a value proposition Segmentation: divide the Differentiation: total market into smaller differentiate the market segments. Always offering to create superior Create value for comprises consumers customer value targeted customers Targeting: select the Positioning: position the segment or segments to market offering in the enter. minds of target customers 2. MARKET SEGMENTATION Market segmentation: dividing a market into smaller segments with distinct needs, characteristics or behavior that might require separate marketing strategies or mixes. Consumers differ in: (these are segmentation basis: different ways you have to segment a market) Wants Divide large and Resources Market heterogeneous markets into Locations segmentation smaller segments that can be Buying attitudes reached more efficiently and effectively. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 Buying practices Recognizing their differences and make something specific for them. Efficiency: cost at what you can deliver a value proposition Effectiveness: how good you can deliver a value proposition (?) Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. CONSUMER MARKETS Segmenting consumer markets: there is no single way to segment a market; there are several variables to segment: - Geographic - Demographic - Psychographic - Behavioral GEOGRAPHIC SEGMENTATION: Diving the market into different geographical units (nations, regions, cities or neighborhoods). - Tesco Metro: located in city centers and high streets of small towns. - Tesco Express: neighborhood convenience stores → food with an emphasis on higher-margin products and everyday essentials (and a petrol station). - One Stop: very small stores that do not even carry the Tesco name. DEMOGRAPHIC SEGMENTATION: dividing the market into groups based on age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. - Age and life-cycle stage: Oral B Frozen. Image for kids, message for parents (“90% of the kids brush longer”) - Gender: L’Oréal moisturizing cream. “Man colors”. Pink tax. - Income: American Express. Different types of credit cards PSYCHOGRAPHIC SEGMENTATION: dividing buyers into different groups based on: - Social class - Lifestyle - Personality characteristics. You choose a different motorbike depending on what kind of person you are: sporty person, etc. Product expressive for value: product that says things about you: cars, smartphones, where do you live, apparel… BEHAVIORAL SEGMENTATION: dividing buyers into groups based on their knowledge, attitudes, uses or responses to a product: - Occasions: Samsonite good suitcases, long-live, expensive. - User status: non-users, ex-users, first-time users, regular users. Sometimes brands offer better products to non-users than to users, e.g., telecommunications. Pepe phone (who gives promotions to existent customers), has less market share than Jazztel (don’t give new promotions to existent Descarga carpetas completas de una vez con el Plan PRO y PRO+ Estrategia de Marketing Banco de apuntes de la a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 customers), so relational marketing isn’t always the best. Jazztel knows that changing the company is expensive. Not every exchange has to be arranged in a relation. - Usage rate: light users, medium users, heavy users. Printers. - Loyalty status: high loyalty users, medium loyalty users, no loyal. Wine shop: only gives you access to certain bottles when you have already bought a quantity of bottles (loyalty program), point cards… fits well with relationship marketing. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. BUSINESS MARKETS Primary segmentation variables for business markets: - Demographics: o Industry - Personal characteristics: o Company size (same size if one is o Loyalty to their suppliers bigger → expectations) o Buyer-seller similarities o Location o Attitudes toward risk - Operating variables: - Situational factors: o Technology o Urgency of demand o User/non-user status o Size of order o Customer capabilities - Purchasing approaches: o Nature of existing relationships (with other suppliers) o General purchase policies (leasing—purchase—rent) o Purchasing criteria: quality, price, service. We have to be able to measure the segment Measurable Segments have to be effectively reached and served Effective programs actionable Accessible can be designed to serve the segments Requirements for effective segmentation Large enough to be profitable Differentiable Substantial (are there enough people in Different segments Oviedo willing to pay 200€ per must have different lunch?) behavior Descarga carpetas completas de una vez con el Plan PRO y PRO+ a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 3. MARKET TARGETING Target market: consists of a set of buyers who share common needs or characteristics that the company decides to serve. Targeting is when the company selects which segments they are going to target. Evaluating market segments: - Segment size and growth. Not only today, but how is it going to be in the future. o Big companies can target larger and fastest growing segments —they have the size and the resources. o Smaller companies may be more interested in smaller segments which are easier to serve. - Segment structural attractiveness o Number of competitors is the market very crowded? o Power of customers in the segment can they dictate the terms of the exchange? o Power of suppliers needed to serve the segment - Company objectives and resources o Segments of the right size and structural attractive can be beyond a company’s long-term strategy. Find the right segment for you (not the same for every company); each brand has to find the right one for them. Selecting market segments: why don’t we view every buyer as a separate target? The trade-off (punto de equilibrio): Economies of scales covering every customer you lose economies of scale, and you become less competitive. Value creation segmenting and targeting’s aim is creating value. MICRO UNDIFFERENTIATED DIFFERENTIATED CONCENTRATED MARKETING Targeting broadly Targeting inditex narrowly e.g., tailor Undifferentiated marketing (Mass marketing): million shirts in Zara. - Centering on what is common amongst consumers - Targeting the while market with one offer - Problem: it is difficult to compete with more focused firms. Schweps: 30 years ago, tonic water was dominated by it; 2 needs: gin-tonic, digestive. using the needs to make the segments (behavioral segmentation). Same product. MARKETING MIX ALL BUYERS IN 1 SEGMENT Differentiated marketing (segmented marketing) - Centering on different needs and wants of several segments Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 - Mean several Marketing Plans, Marketing Research, Advertising programs and brand building. Schweeps: launched premium tonic waters. Covering both segments with different value propositions. 2 segments with 2 different marketing mixes (different product, price, promotion, packaging, communication, for different products.) also Coca-Cola. Diet vs. zero (basically same product, but different segments) → product level. also brand level, e.g., loreal group. Different brands depending on the type of customer. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. MARKETING MIX 1 SEGMENT 1 MARKETING MIX 2 SEGMENT 2 MARKETING MIX 3 SEGMENT 3 Concentrated marketing (niche marketing) - Centering on needs and wants of one segment - Useful when companies’ resources are limited - Internet has opened a door for Niche Marketing companies targeting long tailers. New tonic water brand, perfect for mixing (low carbonation, 100% natural). it was more than double the price. it was specific for one segment (gin-tonic). It was a success because there was a segment that wanted something good for their drink. Just go for 1 segment (specific) Q tonic → only make tonic water. Even if the segment is really small, it can be profitable with online shopping (e.g., books) MARKETING MIX SEGMENT 1 SEGMENT 2 SEGMENT 3 Micromarketing: - Tailoring offers to meet the needs of specific individuals and locations concentrating in a very small segment. - Local marketing: Eroski hypermarkets and local food products. - Individual marketing: aka One-To-One Marketing. Customer involves on the design of the product → cocreation. In ralph lauren you can personalize some items: color, logo, etc. pay more. Technology. MARKETING MIX SEGMENT 1 SEGMENT 2 SEGMENT 3 Descarga carpetas completas de una vez con el Plan PRO y PRO+ a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 HOW TO CHOOSE A TARGETING STRATEGY: - Company resources: if resources are low, start concentrated make sense. - Product variability: uniform products call for undifferentiation. - Product’s life-cycle: o Undifferentiation on introduction. Just make 1 o Differentiation and micromarketing on maturity - Market variability: If consumers are alike: undifferentiation Competitor’s strategy: if competition is differentiated, undifferentiation can be suicidal. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. - 4. DIFFERENTIATION AND POSITIONING Worst situation for a brand: perfect competition because there are infinite number of buyers and sellers, no entry bounders, homogeneous products (no differences). When the products are not perceived different, you go for the cheapest. Product position: brands try to be perceived different (prices, communication, channels…) - The way the product is defined by consumers on important attributes. - The place the product occupies in consumers’ minds relative to competing products. In pharmacies, safer products. - “Products are created in the factory; brands are created in the mind” a brand is only what it means to consumers, compared to competition. The three steps: Identify sources of differentiation Choose the right competitive advantages Select an overall positioning strategy IDENTIFY SOURCES OF DIFFERENTIATION: infinite. PRODUCT: Trina: no carbonation. SERVICES: Ikea. No services: best price, but nobody helps you. CHANNELS: Lacoste. Selects carefully who is their retailer. La Roche posse, bought at pharmacies. PEOPLE (that delivers the service): El Corte ingles. Having people helping the customers. IMAGE: Pepsi. We perceive it different than Coca-Cola. It’s an image thing because nothing in the product is different. CHOOSE THE RIGHT COMPETITIVE ADVANTAGES: - How many: o The Unique Selling Proposition (USP) (Rosser Reves). Identify what makes your brand special, only one thing. Descarga carpetas completas de una vez con el Plan PRO y PRO+ a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 o Successful examples of several competitive advantages several attributes: El Corte Inglés. Great service, people, sophisticated, etc. - Which ones: those that are: o Important o Distinctive o Superior o Communicable o Not easy to copy o Affordable o Profitable Choose the best one. If there’s already a brand there: attack the brand, or go for second, third… Position in an attribute than no one positions into, and then upload it. SELECT AN OVERALL POSITIONING STRATEGY: PRICE More The same less BENEFITS More More for more More for the same More for less miele lexus hacendado The same The same for less AMD Less Less for much less Aliada Less for much less: low cost. Basic product, very affordable price. difficult to be profitable. Only if you are very cost effective. Aliada (line of affordable products in Supercor?) The same for less: AMD manufacturer of microprocessors. If you are able to do the same performance, why charge cheaper? Contrary to nature of marketing More for less: so difficult. Hacendado. Not about the status. That is the success of mercadona. More for the same: lexus (luxury division of Toyota). Lexus will have all the equipment, not as BMW of instance. Depends on how you define the competition. Lexus is premium compared to the rest of the brands, and more for the same compared to the premium category. More for more: premium. ≠ luxury. Luxury doesn’t invent, you need a tradition, a heritage, a craftmanship… you become a luxury brand over time. Think in competition to choose. Developing a positioning statement: to (target segment and need) our (brand) is (concept) that (point of difference). Could also be the first slide. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6718425 e.g., to busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that allows you to stay connected to data, people, and resources while on the go, easily and reliably, more so than competing technologies. Bit long, but follows orthodox formula Identify target, who you are idea and point of difference. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. Descarga carpetas completas de una vez con el Plan PRO y PRO+