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Marketing Management 18 April 2011 Customer-Driven Marketing Strategy: Creating Value for Target Customers Market Targeting Creating Value for Target Customers Evaluating Market Segments • Important to collect and analyse data on segment sales, growth rates and expected profitability • Companies look at three (3) factors in evaluating market segments • Segment Size and Growth • Segment structural attractiveness • Company objectives and resources Business Segmentation Process Selecting Target Market Segments • After concise segment evaluations, decide on particular segments to target • Target Market: A set of buyers sharing a common need or characteristics which the company decides to serve • Marketing Target Strategies vary from very broad to being very specific • Undifferentiated Marketing (Mass Marketing) • Differentiated Marketing (Segmented Marketing) • Concentrated Marketing (Niche Marketing) • Micro Marketing (Local or Individual Marketing) Marketing Targeting Strategies • Undifferentiated: A market coverage strategy where the company ignores market segment differences and selects to target the whole market – focuses on common needs of customers • Differentiated: A market coverage strategy where the company targets several market segments and provides separate offers for each segment – focuses on differentiated needs of customers Marketing Targeting Strategies • Concentrated: A market coverage strategy where the company targets a dominant share of one or a few select segments – focuses on serving niches • Micro Marketing: A market coverage strategy where the company focuses on tailoring products and programs to the needs of individuals and local groups • Local Marketing – tailoring brands and promos to needs and wants of locals in cities, suburbs, stores • Individual Marketing - tailoring brands and promos to needs and wants of individual customers e.g. one-on-one marketing Choosing Targeting Strategies • Market targeting strategies are dependent on: • Company Resources • Product Variability • Product Life Cycle Stage • Market Variability • Competitors’ Marketing Strategies Differentiation and Positioning • Marketers plan positions to give their products advantages in selected target markets through marketing mixes • Product Positioning: The way the product is defined by consumers on important attributes – the position it occupies in a consumer’s mind compared to competing products • Consumers organise products, services, and companies and “position” them in their minds • Marketers should not leave their product’s positioning to chance Differentiation and Positioning Strategy • A brand’s positioning must serve the needs and preferences of well defined target markets • Differentiation and Positioning task consists of three steps: • Identifying possible Value Differences and Competitive Advantages • Choosing the right competitive advantage • Selecting an overall positioning strategy Differentiation and Positioning Strategy Identifying Possible Value Differences and Competitive Advantages • Marketers must understand customer’s needs better than their competitors • Marketers need to deliver more customers value to gain a competitive advantage • A company has to live up to its promises and not make empty promises • A company can differentiate through its products, services, channels, the people it employs and its image Choosing the Right Competitive Advantage • This entails choosing the number of differences to promote and which specific ones to promote • Number of Differences to Promote • Every company should have a Unique Selling Point (USP) • Each brand must have its own main USP • Differences to Promote • Not all differences are great differentiators • A great difference satisfies the following: important, distinctive, superior, communicable, pre-emptive, affordable, profitable Selecting An Overall Positioning Strategy • Full position of a brand is called the brand’s Value Proposition • Value Proposition: the full mix of benefits which differentiates and positions the brand • Possible Value Propositions • More for More • More for the same • The same for Less • Less for Much Less • More for Less Positioning Map Product Positioning Positioning Statement • Positioning Statement: A statement which summarises the company or the brand’s positioning • The statement incorporates • The need • Target Segment • The brand • The concept • The point of difference • The brand’s superiority is outlined in its point of difference • All the company’s marketing mix effort must support the positioning strategy See you next time. Cheers Guys!
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