Marketing Strategy

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					Elements of Marketing Strategy


David Forlani
University of Colorado at Denver
and Health Sciences Center
Presentation Overview

• Marketing Strategy’s:
  – Place in the Organization
  – Elements Defined and Illustrated
     •   Defining Markets,
     •   Segmenting Markets,
     •   Targeting Market Segments and
     •   Positioning within Targeted Segments




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Decision Level

• What industries to compete in is a corporate-level
  strategic decision.
• What product-markets to compete in is a business-
  unit-level strategic decision.
• What marketing program to implement in a given
  product-market is a marketing-level strategic
  decision.



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Marketing Programs

 • Marketing Strategy is the Unifying Part of a
   Marketing Program. It determines the target
   market and positioning objectives.
 • The Marketing Mix is the Action of the
   Marketing Program. It implements the
   strategy through its elements, the 4 P’s
   (Product, Price, Place and Promotion).




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Establishing Boundaries:
Defining Product-Markets

• Broadest: The market is the industry.
• Narrowest: The market is one user.
• Useful: Set of current and potential users of the
  need/want satisfaction you plan to offer.




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P-M Evolution: Full-Size Fade
      1965    Sold 000’s           1995   Sold 000’s
 Impala        1,698.5     Ford std PU      660.9
 Galaxie        981.5      Chevy std PU     505.5
 Mustang        518.3      Explorer         395.2
 Catalina       517.9      Taurus           366.3
 Chevy PU’s     495.7      Accord           341.4
 Ford PU’s      389.3      Camry            325.6
 Chevelle       349.6      Ranger PU        309.1
 LeSabre +      343.1      Civic            289.4
 Olds 88/98     342.6      Saturn           285.7
 Beetle         314.6      Escort           285.6
 Full-Size    47% share    Full-Size      10% share    6
Market Segmentation Defined

• Market segments are distinct subsets of people
  with similar needs, circumstances and
  characteristics that lead them to respond in a
  similar way to a particular product or service
  offering, or to a particular strategic marketing
  program (text, p 17).




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Segmentation Criteria

• Size—Is the segment big enough to be profitable?
• Stability—Is there enough time to enter and make a
  profit?
• Accessibility—Can we communicate with the people in
  this segment as it is defined?
• Differential Response—How do we need to change the
  marketing mix to participate in each segment?




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Segmentation:
Finding Differential Response

•   Identify actionable characteristics such
    that:
    – Groups of users within a level of that
      characteristic respond similarly to a given
      marketing program, AND
    – Groups of users at other levels of the
      characteristic respond differently.




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Typical Segmentation Variables


  • Demographics: External characteristics of a
    population, e.g., age, gender, income
  • Psychographics: Internal indicators of a
    population, e.g., activities, interests, opinions
  • Benefits Sought: Motivation for purchase,
    e.g., new, replacement, improvement
  • Usage Situation: Where is the need being
    fulfilled, e.g., home, vacation, work


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Segmentation Methods:
Data Visualization




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Segmentation Methods:
Ford’s Generational Segments

  • For 1997 Model Year:
    – Redesign F-150, best selling vehicle in US.
    – Don’t mess up like we did on the 1996 Taurus.
    – Provide a foundation for a large SUV
      (Expedition).




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Basement-Designer, James
Bulin

 • Forget benchmarking (Dodge Ram) in favor of
   automotive anthropology--20th century values.
    – “We developed a way of crawling inside the heads and
      hearts of tomorrow’s customers.”
    – “The growing up experience of each generation
      establishes the rules they live by.”
 • Generational research identifies macro-level
   changes in consumers’ desires and tastes.
    – These elements set the values of those growing up
      during an era and shape their purchasing behavior.


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Bulin’s Generational Segments




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Generational Segments Work

• 1999 F-150 sales hit record 869,000 units, double
  those of the Dodge Ram.
• 1998 Bulin leaves to create the “Bulin Group,” a
  marketing consultancy that uses generational
  research methods to:
  – “understand the emotional elements in individuals that
    drive purchase decisions, then tailor products that pull
    at those heartstrings.”



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Targeting Market Segments

• After Segmentation Decision
• Decide which segments to target with a unique
  marketing mix
• Consider each segment in terms of its
  attractiveness and your ability to compete for
  that group of customers




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Competitive Position --
Industry Attractiveness Matrix

                                         COMPETITIVE POSITION
  INDUSTRY ATTRACTIVENESS




                                        Strong  Medium     Weak
                                      Protect             Invest to     Build
                            High      Position              Build     Selectively
                                       Build           Manage for     Ltd Expand
                            Medium   Selectively         Profits       /Harvest

                                     Protect &         Manage for
                            Low                                         Divest
                                      Refocus            Profits

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Targeting Applied: VW

• VW moves up-market by targeting the well-heeled
  buyer of luxury cars.
  – The New $70,000+ VW Phaeton
  – Battling BMW Buys Bentley




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Targeting Applied: e-Machines

• Defined the product market as consumer desk-top
  users
• Segmented along traditional lines: e.g., price
  sensitivity and technological sophistication
• Identified an attractive segment, where they felt
  they could compete.
• What segment did they target?



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Positioning

• Positioning refers to both the place a product or
  brand occupies in customers’ minds relative to
  their needs and competing products or brands,
  and to the marketer’s decision making intended to
  create such a positioning (text p 201).




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Positioning Process


  1. ID competitors serving target market
  2. Determine Determinant Attributes
  3. Sample for perceptions of attributes & brands.
  4. Plot in target’s product space
  5. ID desirable place(s)
  6. Map perceived attributes to Marketing Mix
     elements
  7. Solidify with a positioning statement

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Positioning: Non-RX Pain
Relievers among Headache Suffers

•   ID Main Competitors
•   Determine Determinant Attributes
•   Sample for perceptions of brands and plot
•   ID Desirable Place(s)
•   Map perceived attributes to Marketing Mix
    elements that can create that perception




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Perceptual Map of Non-RX Pain
Relievers (Headache Segment)

                     Harsh
                                            *Excedrin PM
                                          *Excedrin
           *Bayer           *Anacin
                                 *ES Tylenol
 Weak                                                Strong
              *Anacin 3
                       *Panadol
           *Tylenol


                     Gentle
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Positioning Statement

• The mental image you want the target market to have of
  your product relative to competitor’s offerings.
• For {targeted segment} using/owning {your product} is
  {most important claim} because {most significant support}.
• For {lazy pizza eaters}, getting Dominos pizza delivered is
  {the fastest way to tame your hunger} because {we deliver
  in 30 minutes or its free}.




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Repositioning: Always Difficult


  • Oldsmobile’s Woes, GM’s oldest division, Until the
    oil embargo, a luxury-performance leader.
  • In the 80’s, perceived as a Grandpa car.
  • Enter the Silhouette, Spokesman Spock, and the
    “its not your father’s Oldsmobile” tag.
  • 1990’s Enter 37-year old Karen Francis the
    Intrigue, Alero, Aurora and promotions in Drew
    Carey, Hard Rock Café Rockfest and X-Files.
  • 2004 was Oldsmobile's final year.

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Description: Marketing Strategy