3.

Marketing Strategies

Marketing Opportunities
Breakthrough

opportunities help to develop hard-to-copy marketing strategies that are profitable in the long-term Even if a company cant get breakthrough opportunities, it must strive for competitive advantage:

When its target market prefers its marketing mix to that of a competitor Must provide superior value and satisfy customers better than competitors Sources of competitive advantage: price advantage, well-known brand, reliable distribution channels, strong sales force

Competitive Strategies
Porters

generic strategies:

Cost leadership Differentiation Focus:

Differentiation

focus differentiate in one/small number of target market segments; provide products different from competitor who caters for a broader group of customers (niche) Cost focus lower cost advantage in one/small number of market segments; e.g., product similar to high-priced product, but acceptable to segment (me-too product)

Marketing Mix 4 Ps
Product

Price
Promotion Place

Marketing Mix 4 Ps
Product

Market research indicates what customer wants Then, match product packaging design, materials used, size & quantity Need to track customers needs change over time

Marketing Mix 4 Ps

Price:
Need Need Need Need to to to to recoup overheads, costs. compete match what customers are willing to pay fine tune:

Loss

leader pricing lowering price to attract customers (you may make a loss, but customer may buy other products). For products in maturity/decline Penetration pricing lower price to discourage competitors/induce interest in product at introductory stage Price skimming keep price artificially high. To recoup costs & make profits. Good for products that are new/in demand (growth stage) Differential pricing same product to be sold at different costs in different markets

Marketing Mix 4 Ps
Place:

How you will sell your product:

Direct selling door-to-door, retailing, mail order, ecommerce; complete control and easy to get customer info, but need storage/retail premises Direct to retailer avoid problems related to direct selling, but needs admin to control, and sales force. Loss of control/customer info Wholesaler lose identity; lose customer contact, but less headaches
Could

have combinations

Marketing Mix 4 Ps
Promotion:

Thru:

Mass media (TV, magazines, Internet, radio) Personal selling Non-personal communication (persuasion advertising, competitions, free samples) Others (PR, free publicity)
Message

should be geared to market segment targeted

A word about advertising

Could

concentrate on companys general image or particular product Main forms:

TV, radio, newspapers/magazines, travel trade press, videos, posters, cinema, exhibitions/trade fairs, Internet

Marketing of Services
Marketing

of services can cause customer dissatisfaction Marketing: Important not to over-promise, but, at the same time, attract customers Need to consider product/service mix first Apply four Ps: - Product (core service) - Place (access & location) - Price - Promotion

Marketing of Services
For

services, need to apply more Ps (according to Booms & Bitner) - Participants (employees & customers) - Physical evidence (tangibles, ie, dcor, layout, etc) - Process (all the steps that deliver the service), ie, ease of use, volume, etc

Marketing of Services
Other

factors that affect the customers purchase decision: - Safety - Convenience - Flexibility - Speed - Reputation - Availability - Package (explicit & implicit) - Value for the customer

Market Segmentation

Two step process:

A market segment is relatively homogeneous (similar) customers who will respond in the same way to a marketing mix Marketers group individual customers into workable number of relatively homogeneous target markets then treat each target market differently

Naming broad markets this is the process of disaggregation; e.g., a car manufacturer focuses on the generic market transporting people. Then further breakdown to cars, trucks, etc Segmenting the broad market in order to select target markets; this is an aggregating process where similar customers (with similar needs) are grouped

Market Segmentation

market segments should be:

Internally homogeneous in terms of their response to a marketing mix Externally heterogeneous different segments should be different Substantial a market segment should be substantial enough to be profitable Operational Its segmentation dimensions should be useful in identifying customers and deciding on a marketing mix

Market Segmentation
Marketers

use market dimensions to segment markets. The main dimensions are:

Behavioral (needs & attitudes, e.g., prestige needs) Geographic Demographic (family status, education, ethnicity, social class)

Three ways to develop market oriented strategies

Single

target market: pick one segment to target Multiple target market: Choose two or more segments treat each segment differently (sometimes called mass marketing, e.g., coke) Combined target market combine two or more segments into one larger target market, then approach it with one marketing mix

Positioning
This

is consumer perception of existing/ proposed product Marketers need to consider:

How a product is viewed in the market The need for repositioning a product Ways of repositioning a product Positioning helps marketers by indicating all key dimensions of a market segment