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Developing a Marketing Strategy & the Benefits
Market Segmentation
Target Marketing
Positioning
Tailored and effective marketing activities
Identify a competitive advantage
Increased sales/profits
Increased customer base
Effective use of resources
Positioning & differentiation
Stimulates innovation
Develop marketing mix
Market Segmentation
Overview of a Marketing Strategy
Market Targeting
Market Positioning
Develop Marketing Mix(es)
10-14yrs
15-19yrs
20-29yrs30-39yrs
40-49yrs
50-59yrs
60+
Males
HotelsGolf
Courses
Domestic Market
Community Centres
Res Homes
Business Parks
Landscape GardenerHair Salon
Defining Market Segmentation
…the process of dividing a market into similar groups
Females 10yrs - 60yrs+
Essential Criteria of a Market Segment
Substantial: Large and profitable enough to serve
Accessible: Can be effectively reached and served
Differential: Segments must respond differently to different marketing mix elements
Actionable: Effective marketing activities can be designed to attract and serve the segments
Measurable: Size of segments can be measured
Segmentation Variables
Consumer market Commercial Market
Geographical County, region, town, postcode, mile radius
County, region, town, postcode, mile radius
Demographic/
Firmographic
Age, gender, income, occupation, dependants, household composition
Turnover, size, employees, business activity, industry
Behavioural Usage rate, loyalty, impulse buying, benefit expectations, price sensitivity
Usage rate, end product use, benefits sought, purchase procedure, buying status
Psychographic Lifestyle, interests, attitudes, personality traits, opinions
Socially responsible, entrepreneurial, employee focused, financially prudent
Market Segment Profile• Demographic/firmographic
characteristics• Location• Needs/wants• Benefits sought• How much customers purchase• How much customers spend• Frequency of purchase• Payment method• Purchase decision factors• Attitudes towards product or service• Brand loyalty• Mediums used to source product or
service
Target Marketing StrategiesMarketing
mixUNDIFFERENTIATED
MARKETINGMarket
Marketing mix 1
Marketing mix 2
Marketing mix 3
DIFFERENTIATED MARKETING
Segment 1
Segment 2
Segment 3
CONCENTRATEDMARKETING
Segment 1
Segment 2
Segment 3
Marketingmix
Marketing Strategies & Factors to Consider
• Resources
• Capabilities
• Product variability
• Market variability
• Competitors' marketing strategies
• Market environment
Evaluating Market Segments• Expected growth rates• Demand• Profitability• Competition intensity• Competitive advantage• Speed of payment• Price sensitivity• Cost of marketing activities • Compatible with business aims and objectives
Key Success Factors Market Segment
1 2 3 4
Sales potential 3 8 6 8
Competition intensity 3 6 2 8
Sensitivity to price 4 7 5 7
Market growth rate 2 6 5 8
Market size 2 8 4 8
Ability to meet needs 3 6 8 5
Total 17 41 30 44
Quantitative Measures of Market Segment Attractiveness
Positioning Strategies• Product attributes
• Usage occasions
• Users
• Against a competitor
• Away from competitors
• Product classes
• A combination of the above approaches
Positioning Map
Inexpensive Expensive
Low Prestige
High Prestige
.
.Product c
Product a
Product b
Product d
A Model of Competitive Advantage
Your Business
Your Business
Cost advantage
Or
Differentiation Advantage
Value
Creation
Customers
Consistency of use
Colours
Name
Logo
Company Identity
Competitive advantage Company
ImageCompany
Image+Commitment to quality
=
Branding
Developing an Image/Brand
Marketing Mix
ProductPrice
Place Promotion
Customer solution
Convenience
Cost
Communication
Marketing Mix/4Ps
Market
Or
Segment 1
Segment 2
Segment 3
Guarantee
Del
iver
y
Core Benefit or function
Pac
kag
ing
FeaturesS
ize
Su
pp
ort
se
rvic
e
After sales
Attributes
Core product level
Actual product level
Augmented Product level
Product Levels
Market
Or
Segment 1
Segment 2
Segment 3
Product Or ServiceFu
nctio
nal b
enef
its
Relationship benefits
Process benefits
Three Dimensions of Customer Benefits
Market
Or
Segment 1
Segment 2
Segment 3
Pricing Approaches
Cost Based Pricing• Cost plus pricing• Breakeven
Buyer Based Pricing• Perceived value pricing
Competition Based Pricing• Going rate pricing
Market
Or
Segment 1
Segment 2
Segment 3
Product Service
Direct to customer
Product Service Intermediary
Agents Retailers Distributors Internet
Place/Distribution
Market
Or
Segment 1
Segment 2
Segment 3
Aim of Promotion
• Positioning/branding/image• Move customers through the decision making
process (DMP)
Awareness Attitude Action
Decision making process (DMP)
Interest Desire
Unawareness
Personal selling
Advertising
Public Relations
Sales promotions
Awareness Attitude Action(Interest, desire)
Lev
el o
f effe
ctiv
ene
ss
Promotional Mix & Effectiveness in the DMP process
Communicating the Message
Your Business Message
Customer
Encoding Decoding
Noise
Promotional Plan ChecklistMission
Money
Method
• Who you are targeting • Aims & objectives
• Budget • Costs
• Image/branding/positioning• Costs• Logistics/timeframes• Integration with the marketing mix• Accessibility within market segments
Message • Image/branding/positioning• Information – product/business
• Features & benefits
Monitoring • Evaluation• Effective/feedback
• Cost effective
Diversification
Market penetration Market development
Product development
Existing Markets New Markets
Exi
stin
g
Pro
du
cts
New
P
rod
uct
sAnsoff’s Product/Market Matrix
Increase sales in existing market
Introduce current product into new markets
Develop existing or new products for existing markets
New products or related products for new markets
Evaluation and Control Process
5
Determinewhat tomeasure
Establish standardsforcomparison
Measureperformance
Is performance>/ =standards?
Take corrective action
NO
Yes
1 2 3
4
Continue with marketing activity
Marketing Measurement Methods• Customer satisfaction
– Satisfaction surveys– Customer feed back forms– Formal/informal meetings with customers
• Sales variances– Sales/cash flow analysis– Profit margin analysis
• Marketing cost effectiveness– Marketing costs ratios e.g.
Marketing costs Sales