The Probable Decisions are…!!!To which consumer should I sell my watches? How should I define the consumer I hope to serve? Should I think in terms of geography, perhaps the country in which my consumer lives? Or may be the consumer’s income or sex or fashion orientation is more important?

The Probable Decisions are…!!!

What Product or Products should I offer?For example should I offer digital or analog, ornate or simple, multifunction or single function?How much should I charge for each watch?Should I offer discounts to people who pay cash or who buy in large amounts?

The Probable Decisions are…!!!Should I sell direct to consumers or through stores, and if through stores, what type of stores?Do I want to offer my product in several types of outlet or only in one type?How do I select and service the particular outlets I Chose?Finally, How do I convince the store to carry my brand?

The Probable Decisions are…!!!

How should I communicate to the consumers to whom I wish to sell?Do I use advertising, and if so in what media?How do I reach the stores? Do I use sales people?Should the salespeople visit the stores or should they just telephone them?

Holistic Marketing

6

Views on the Marketing Processes

5-C AnalysisCustomer

CompetitorCompany

CollaboratorsContext

S-T-P MarketingSegmentation

TargetingPositioning

4 P’s Marketing PlanProductPricing

PromotionPlace

The Functional View

Competition

Competition

Price based

Quality based

Time based

Location Based

Views on the Marketing Processes

Understanding Customer

Value

Creating Customer

Value

The Process View

Capturing Customer

Value

Delivering Customer

Value

Sustaining Customer

Value

Understanding Customer ValuePsychological

Functional Economic

Value Delivery System

Customer Type A

Customer Type B

Customer Type C

Customer Type D

Customer Type E

Traditional Understanding of Market Spaces Ideal Understanding of Market Spaces

2010

VDS A

VDS BVDS C

VDS D

VDS E

2020

✓Demand is never for a particular product; it is always for the value being delivered✓VDSs look at the entire value chain and not at only

the end customers✓Estimate the future potential wealth of the VDS

rather than the future potential revenue from the customers✓A market space is usually defined by a large set of

related potential VDSs✓Other competing VDSs should always be kept in

mind while evaluating a particular VDS (analogous to Threat of Substitutes in Porter’s Five Forces)

12

Value Delivery System

B2C Buying Cycle

B2B Buying Cycle

Steps in Market Segmentation, Targeting,and Positioning

1. Identifysegmentationvariables andsegment themarket

2. Develop profiles ofresultingsegments

MarketSegmentation

3. Evaluateattractivenessof eachsegment

4. Select thetargetsegment(s)

MarketTargeting

5. Identifypossible

positioningconcepts foreach target

segment

6. Select,develop, andcommunicate

the chosenpositioning

concept

MarketPositioning

Why Segmentation ? y Not all buyers alikey Subgroups may be identifiedy Subgroups smaller and more homogeneousy Easier to satisfy smaller groups

How to Segment & Target?

1.Break

market down

2.Group into

segments

TARGET MARKET

3.Choosetarget market

Basic Market-Preference Patterns

(a) Homogeneouspreferences

Quality

Econ

omy

(c) Clusteredpreferences

Econ

omy

Quality

(b) Diffusedpreferences

Econ

omy

Quality

Bases for Segmenting Consumer MarketsDemographic

Socio-graphicLifestyle

GeographicBehavior

ConsumptionPredispositions

VALS Framework

Bases for Segmenting Business Markets

GeographyOrganizational charateristics

Purchase behaviorUsage patterns

Organizational predispositions

•Size, purchasing power, profiles of segments can be measured.

•Segments can be effectivelyreached and served.

•Segments are large or profitable enough to serve.

Measurable

Accessible

Substantial

Differential

Actionable

•Segments must respond differently to different marketing mix elements & programs.

•Effective programs can be designed to attract and serve the segments.

Step 1. Market SegmentationRequirements for Effective Segmentation

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing Mix 1

CompanyMarketing Mix 2

CompanyMarketing Mix 3

Market

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

Step 2. Market TargetingMarket Coverage Strategies

Company Resources

Product Variability

Product’s Stage in the Life Cycle

Market Variability

Competitor’s Marketing Strategies

Step 2. Market TargetingChoosing a Market-Coverage Strategy

Step 3. Choosing a Positioning Strategyy Product’s Position - the way the product is defined by

consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.

y Marketers must:y Plan positions to give their products the greatest

advantage in selected target markets,y Design marketing mixes to create these planned

positions.

Positioningy The way consumers perceive the brand relative to its

competitiony ID competitive advantagey Stress salient characteristicsy Differentiate

ServicesDifferentiation

i.e. Delivery, Installation, Repair Services, Customer

Training Services

Product Differentiation

i.e. Features, Performance, Style & Design, or Attributes

ImageDifferentiation

i.e. Symbols, Atmospheres, Events

Personnel Differentiation

i.e. Hiring, Training Better People Than

Competitors Do

Identifying Possible Competitive Advantages

Five Patterns of Target Market SelectionSingle-segmentconcentration

ProductspecializationM1 M2 M3

P1P2

P3

Selectivespecialization

M1 M2 M3 P1P2

P3

M1 M2 M3 Full marketcoverage

P1

P2

P3

Marketspecialization

M1 M2 M3 P1

P2

P3

P1P2

P3

M1 M2 M3

P = ProductM = Market

GenderF

M

Age14 - 21 22 - 29

Geo

grap

hy Japan

Western Europe

U.S.

Segment Cross-Classification: Aerobic Shoes

Positioning: Tea - Late 1990s

Iced Hot

Traditional flavor

Unique flavor

z Lipton

z Tetley

z Nestea

z Lipton Rounds

z Tetley Rounds

z Lipton Natural Teas

z Lipton Flavored

4 P’s of Marketing

33