2a Pillars of Marketing STPD

Prof. Vikram Parekh on Marketing Strategy

STPD Strategies

Pillars of marketing

Identifying MarketSegments and

Targets

Segment Marketing

Targeting a group of customers

who share a similar set of

needs and wants.

Customerization

Combines operationally driven

mass customization with customized

marketing in a way that empowers

consumers to design the

product and service offering

of their choice.

Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Bases of segmentation

1. Geographic region, city, density, climate

2. Demographic age, sex, marital status, family size, income

3. Psychological need-motivation, personality, perception, attitude

4. Psychographic lifestyle

5. Socio-cultural culture, religion, language, family life-cycle

6. Use-related usage rate, awareness status, brand loyalty

7. Use-situation time, objective, location, person

8. Benefit

9. Hybrid mix of other bases of segmentation

Demographic Segmentation

Age and Life Cycle

Life Stage

Gender

Income

Generation

Social Class

Behavioral Segmentation

Decision Roles

• Initiator

• Influencer

• Decider

• Buyer

• User

Behavioral Variables

• Occasions

• Benefits

• User Status

• Usage Rate

• Buyer-Readiness

• Loyalty Status

• Attitude

Behavioral Segmentation Breakdown

Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable

Patterns of Target Market Selection

Figure 8.6 Patterns of Target Market Selection

Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable

Introduction

In 2004, HLL (Now HUL) was the largest FMCG company in India. It was present in many segments. HUL is a highly consumer-focused company with different brands catering to different consumer segments with different needs and purchasing power

Surf high-end consumers

Rin mid-market segment

Wheel lower end market

Axe men

Ponds & Rexona women

Elle 18 (Laxme) early teens & young adults

Sunsilk (shampoo) hair expert

Clinic plus healthy hair (anti-dandruff)

Defining market segmentation

• The process of dividing the market on various criteria like age, sex, region, culture, etc.

• Segmentation can take place at various levels –

– Segment marketing: dividing the market into large homogeneous segments on the basis of variables like common needs, purchasing power, region, or age. Lakmecosmetics, for e.g., caters to the basic need of women to look good

– Niche marketing: is a specialized market segment, niches are quite small and have much less competition. E.g., magazines targeted at specific sports like golf (Golf Digest)

– Local marketing: involves customizing the global products to suit local tastes. E.g., McDonald’s McAloo Tikki and McVeggie

– Individual marketing: is the highest level of customization, where each product or service is tailor-made for an individual consumer. E.g., designer cars by Dilip Chabria (DC)

Market segmentation strategies• Concentration strategy: marketer chooses to target

a single segment. This strategy has high risk but it can bring benefits due to economies of scale from using only one marketing mix. E.g., volkswagen, which concentrates only on the small car segment

• Selective segmentation: pursuing unrelated but commercially promising segments which diversify the firm’s risk. A separate marekting mix is formulated for each segment. E.g., Living Media India Ltd. Which is an magazine business (India Today and Business Today), news channel (Aaj Tak), music (Music Today), art (Art Today), bookds (Book Club), etc

• Product specialization: to specialize in one product only and sell it to various segments. E.g., Nokia, which is a mobile-phone marketer, and caters to a large variety of segments

• Market specialization: focuses on one consumer segment and serves all its needs. Although the products are different, only a single segment is being catered. E.g., Johnson & Johnson – for babies

Market segmentation strategies• Full market coverage: big marketers have the

resources to cater to the full market. The two strategies which can be adopted for this purpose are –

– Differentiated marketing strategy for each segment (separate marketing mix for each segment) e.g., Coca-Cola’s full range of products: Kinley (bottled mineral water); Georgia (hot & cold coffee and flavored tea); Sprite (colorless carbonated cold drink); Thumps up, Vanilla Coke and Coke (Carbonated black cold drink); Mazaa (Mango drink) and Kinley club soda

– Undifferentiated marketing strategy (targeting multiple segments with one marketing mix). This method is profitable if resources are used more efficiently. It is a mass marketing approach where the whole market is treated as a sing market. For most basic necessitates, an undifferentiated marketing strategy is adopted

Market segmentation strategies

• Counter-segmentation: club all the segments together and formulate a common marketing mix. The need for such a strategy might also arise in case the marketers initially had divided the potential consumers in too many micro segments which led to a diffused focus and drain on resources with lower returns. E.g., marketers of personal care products, find that people are not buying shampoos on the basis of hair types and its products in many segment like shiny, curly, silky etc. are not selling well. as most people buying shampoos on the basis of just cleanliness and bounce, the marketer might consider a counter segmentation strategy can come out of unnecessary niches

Marketing Debate

Is mass marketing dead?

Take a position:

1. Mass marketing is dead.

2. Mass marketing is still a viable way

to build a profitable brand.

Positioning

S T P D

Positioning

The Idea that each Brand

if at all noticed

occupies a particular point of space

in the individual customer’s mind

A point which is determined by the consumers

perception of the brand in question

and in relation to other brands

Positioning

It is this concept of Perceptual space

that forms the theoretical basis for

Brand Positioning

The Concept of Perceptual Mapping

and Perceptual Space

Perceptual Mapping

Techniques that use consumer perceptions to identify similarities and differences between

brands.

Produces a visual representation of how the target market views competing alternatives.

Positioning

Is the essence of the Brand in terms of its functional and non functional attributes

as Judged by the customers

In a Product Class

In relation to its competitors products

Benefits offered

In order to Position a BrandYou must decide

– Who the Target Consumer is

– Who your main competitors are

– How the Brand is similar to your competitors

– How the Brand is different from you competitors (POD)

POP and POD

Category attributes:that are required to include your product as a

member of that categoryPOP

Competitive: PODs that negate your competitors PODs

POPs can be “good enough”, but PODs should be “superior

A well crafted brand position has three

primary components:

Positioning

Positioning is what you do to the mind of the consumer

Positioning

The Position of a Brand is its Perception among target

consumers

This perception is based on the Functional attributes of the

Brand Tasty, Aromatic, Sporty

Also it is dependent on the Non Functional Emotional

association Modern, Contemporary, Traditional

It is Relative to the perception held by that consumer, of the

competing brands, all of which can be represented as points

or positions in his perceptual space and together, make up

the product class

Positioning Building Blocks

COMPETITORS

BENEFIT

Brand Position

How a brand is perceived by a target audience so that it is distinguished

from competition as being the best at satisfying a particular need

7 UP USED AS A MIXER WITH HARD DRINKS.

HAD STEADY SALES BUT NOTHING AS COMPARED TO A SOFT DRINK.

HENCE, WANTED TO POSITION ITSELF AS A SOFT DRINK LIKE COKE AND PEPSI.

SO HERE COMES

‘UN’ COLA

THE UN COLA

Asian Paints and Hutch

Positioning Bases

Attribute

Price and Quality

Use or Application

Product User

Product Class

Competitor

Emotion

Developing and Communicating a Positioning Strategy

• Attribute positioning

• Benefit positioning

• Use or application positioning

• User positioning

• Competitor positioning

• Product category positioning

• Quality or price positioning

Which Positioning to Promote?

Some Positioning Strategies

Raymonds complete man

Some Positioning Strategies

Coke vs Pepsi Liril

Category performance - Toothpaste

Positioning strategies

By Price/ Quality Nirma

By Competitor Avis

By Usage Burnol / Dettol

By product User Red & White

By Product Class Bata

Positioning by attribute

Functional value…………..Liril uses Freshness

Ingredient………………….Promise with clove oil / Closeup with Gel

Additional features………..VIP Luggage with 360” wheelers

Packaging………………….Frooti in Tetra pack

Product Design……………Kinetic Honda with self-start ignition

Quality/Technology……….Cross Pens offer lifelong warranty

Benefit Positioning

A research into toothpaste marketing revealed the following benefits relevant to toothpaste users:

Economy………….those looking for low price

Cosmetic………….those who want white, bright teeth

Taste………………those to whom taste is important

Medicinal………….those who are concerned about tooth decay or prevention

Lintas on Positioning

The lifelong plywood

The fun shoe polish

The freshness soap

The health soap

The gentle soap

Kitply

Cherry Blossom

Lifebuoy

Since positioning represents the ‘slot’ the brand occupies in the consumers

mind,The best way to define a particular positioning slot is to use 3 or 4 words.

Some famous positioning statements

Titan Quartz, the international watch you can pay for in rupees

Four Square…Live life king size.

TVS Suzuki…Fill it, shut it, forget it.

Savlon…Yeh jale ga nahin

Forhans…Yeh jhag wala hai

Avis…We are No.2, but try harder

Maggi Noodles…bus do minute

Developing and Communicating a Positioning Strategy

Communicating the Company’s Positioning

Positioning statement• More car per car……….TATA Indica V2

• Spoil yourself…………..TATA Indigo

• Lets make things better……Philips

• For a special journey called life…..Chevrolet

• The difference is German engineering….Corsa

• Express yourself……Airtel

• For Managing Tomorrow…..Business Today

Generic format for positioning statements

For (target market)(brand) is the

(concept) that

(point of difference).

Diet Coke

To weight conscious adults ( target )

Diet Coke is the brand of diet cola ( category )

that tastes best ( benefit )

Value Proposition for Volvo in North America

Target market: Upscale American families

Benefits offered: Safety

Relative price: 20% premium to domestic family cars

Generic format for value propositions:Target market

Benefits offered (and sometimes not offered)

Relative price

Example : Mountain Dew

To (target group and need) our (brand) is (concept) that (point of differences)

Target : young, active soft-drink consumer who have little time for sleepBrand : Mountain Dew

Concept : Soft DrinkPoint of Difference : give you more energy than

any other brand because…. etc

A brands Positioning is a key concept it is based on a fundamental principle

all choices are comparative

Positioning is competitive

When it comes to brandscustomers make a choice

but with products they

make comparison

RememberProducts increase customer choice

brand simply it.

Now.. Try it Yourself : VW New Beetle

To (target group and need) our (brand) is (concept) that (point of difference)

Differentiation

Product characteristics

Service characteristics

Personnel characteristics

Distribution characteristics

Image characteristics

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