Developing a Marketing Strategy & the Benefits Market Segmentation Target Marketing Positioning...

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