11Exhibit 3-13-3

Marketing Strategy Planning ProcessMarketing Strategy Planning Process

Customers

Company

Competitors

S.W.O.T.

Segmentation& Targeting

Differentiation& Positioning

Product Place

PromoPrice

Narrowing down to focused strategy with screening criteria

External Market Environment

TargetMarket

22

What is Market Segmentation?What is Market Segmentation?

Market segmentation: The act of dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products and/or marketing mixes.

Market segmentation: The act of dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products and/or marketing mixes.

33

Market SegmentationMarket Segmentation

Exhibit 3-6

3-9

Sta

tus

dim

ensi

on

Dependability dimension

A. Product-market showingthree segments

Sta

tus

dim

ensi

on

Dependability dimension

B. Product-market showingsix segments

44

Bases for SegmentationBases for Segmentation

Geographic SegmentationDemographic SegmentationPsychographic SegmentationSociocultural SegmentationUsage-Situation SegmentationHybrid Segmentation Approaches

Geographic SegmentationDemographic SegmentationPsychographic SegmentationSociocultural SegmentationUsage-Situation SegmentationHybrid Segmentation Approaches

55

Market Segmentation

Occupation

SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic Segmentation

Climate

Density of area

City Size

Region Southwest, Northeast

Major metropolitan cities, small cities, towns(Tire1,II,III

Urban, suburban, rural

Temperate, hot, humid, rainy

Demographic Segmentation

Income

Marital statusSexAge Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+

Male, femaleSingle, married, divorced, living together, widowed

Under Rs25,000, Rs25,000-Rs34,999, Rs35,000-Rs49,999, Rs50,000-Rs74,999, Rs75,000-Rs 99,999, Rs100,000 and overEducation Some high school, high school graduate, some college, college graduate, postgraduate

Professional, blue-collar, white-collar, agricultural, military, own business

66

Table 3.2, continuedSEGMENTATIONSEGMENTATION SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLES

Psychological Segmentation

Learning-involvement

Perception

Personality

Needs-motivation Shelter, safety, security, affection, sense of self-worth

Extroverts, novelty seeker, aggressives, low dogmatics

Low-risk, moderate-risk, high-risk

Low-involvement, high-involvement

Psychographic

Subcultures (Race/ethnic)

Religion

Cultures

(Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts, status seekers

Gujrati, Marathi,Punjabi,Bengali,

Hindu,Muslim,Christan,Sikh

Brahmin, Kshatriya,Baniya

Family life cycle

Social class Lower, middle, upper

Bachelors, young married, full nesters, empty nesters

Attitudes Positive attitude, negative attitude

Sociocultural Segmentation

77

SEGMENTATION BASSEGMENTATION BAS SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLES

Use-Related Segmentation

Brand loyalty

Awareness status

Usage rate Heavy users, medium users, light users, non users

Unaware, aware, interested, enthusiastic

None, some, strong

Use-Situation Segmentation

Location

Objective

Time Leisure, work, rush, morning, night

Personal, gift, snack, fun, achievement

Home, work, friend’s home, in-store

Person Self, family members, friends, boss, peers

Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money

Geodemographics “Money and Brains,” “Black Enterprise,” “Old Yankee Rows,” “Downtown Dixie-Style”

Demographic/Psychographics

Combination of demographic and psychographic profiles of consumer segments profiles

SRI VALSTM Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler

Hybrid Segmentation

88

Using single target market approach— can aim at one submarket with one marketing mix

TheStrategy

A segmenter

3-10

Market-Oriented ApproachesMarket-Oriented Approaches

99

Using multiple target market approach— can aim at two or more submarkets with different marketing mixes

StrategyThree

StrategyTwo

StrategyOne

A segmenter

Market-Oriented ApproachesMarket-Oriented Approaches

1010

Step 2. Market TargetingMarket Coverage StrategiesStep 2. Market TargetingMarket Coverage Strategies

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing Mix 1

CompanyMarketing Mix 1

CompanyMarketing Mix 2

CompanyMarketing Mix 2

CompanyMarketing Mix 3

CompanyMarketing Mix 3

MarketMarket

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

1111

Step 2. Market TargetingChoosing a Market-Coverage StrategyStep 2. Market TargetingChoosing a Market-Coverage Strategy

Company Resources

ProductVariability

Product’s Stagein the Product Life Cycle

Market Variability

Competitors’Marketing Strategies

1212

Single - Segment SpecializationSingle - Segment Specialization

M3M1 M2

P1

P2

P3

Five Patterns of Target Market Selection

A firm selects one segments in the market and makes one product for them .Woodland shoes

1313

Selective SpecializationSelective Specialization

M3M1 M2

P1

P2

P3

Five Patterns of Target Market Selection

A firm selects a number of segments, each objectively attractive and appropriate.

1414

Product SpecializationProduct Specialization

M1 M2 M3

P1

P2

P3

The firm makes a certain product that it sells to several different market segments.

1515

Market SpecializationMarket Specialization

M3M1 M2

P1

P2

P3

The firm concentrates on serving many needs of a particular customer group.

1616

Full Market CoverageFull Market Coverage

M1 M2 M3

P1

P2

P3

P= Product M= Market

The firm attempts to serve all customer groups with all the products they might need. Only very large firms can attempt to do that

1717

Positioning StrategyPositioning Strategy

1818

Step 3. Choosing a Positioning Strategy Step 3. Choosing a Positioning Strategy

Step 1. Identifying Possible

Competitive Advantages

Step 2. Selecting the Right

Competitive Advantage

Step 3. Communicating and

Delivering the Chosen Position

1919

Step 3. Positioning for Competitive AdvantageStep 3. Positioning for Competitive Advantage

Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”.

Marketers must:Plan positions to give products the

greatest advantageDevelop marketing mixes to create

planned positions

2020

Step 3. Positioning for Competitive Advantage: StrategiesStep 3. Positioning for Competitive Advantage: Strategies

Against aCompetitor

Against aCompetitor

UsageOccasions

UsageOccasions

Away fromCompetitors

Away fromCompetitors

ProductAttributes

ProductAttributes

ProductClass

ProductClass

BenefitsOffered

BenefitsOffered

UsersUsers

BB

AA

EEDD

CCHHGG

FF

2121

Developing Competitive DifferentiationDeveloping Competitive Differentiation

ProductProduct ServiceService

PersonnelPersonnel ImageImage

Areas for CompetitiveDifferentiation

Areas for CompetitiveDifferentiation

2222

ServicesDifferentiation

(e.g., speed, convenience, careful

delivery)

Product Differentiation

(e.g., consistency, durability, reliability,

repairability)

People Differentiation

(e.g., hiring, training better

people than competitors)

ImageDifferentiation

(e.g., convey benefits and positioning)

ChannelDifferentiatio

n

Identifying Possible Competitive Advantages

2323

Selecting the Right CompetitiveAdvantagesSelecting the Right CompetitiveAdvantages

Criteriafor

DeterminingWhich

Differencesto

PromoteAffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

CommunicableCommunicable

2424

Positioning:

On what does Volvo position?

What about:

•Saab?•Lexus?

Click or press spacebar to return.

2525

Communicating and Delivering the Chosen Position

Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired position to target consumers.

The marketing mix efforts must support the positioning strategy.

Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

Company must take strong steps to deliver and communicate the desired position to target consumers.

The marketing mix efforts must support the positioning strategy.

Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

2626

“Product Space” Representing Consumers’ Perception for Different Brands of Bar Soap

Nondeodorant Deodorant

High moisturizing

Low moisturizing

1

24

5

7

8

6

3

• LUX International

• Cinthol

Santoor

• Margo• Lifebuoy

•Medimix

• Lux

• Dove

• Pears

Positioning of Different Bar SoapsPositioning of Different Bar Soaps

3-14

2828

Positioning ErrorsPositioning Errors

Underpositioning: Failing to really position the

company at all.Overpositioning:

Giving buyers too narrow a picture of the company.

Confused Positioning: Leaving buyers with a confused

image of a company.

Underpositioning: Failing to really position the

company at all.Overpositioning:

Giving buyers too narrow a picture of the company.

Confused Positioning: Leaving buyers with a confused

image of a company.

2929

Rest Stop: Reviewing the ConceptsRest Stop: Reviewing the Concepts

Define the three steps of target marketing: market segmentation, market targeting, and market positioning.

List and discuss the major bases for segmenting consumer and business markets.

Explain how companies identify attractive market segments and choose a target marketing strategy.

Discuss how companies position their products for maximum competitive advantage in the marketplace.

Define the three steps of target marketing: market segmentation, market targeting, and market positioning.

List and discuss the major bases for segmenting consumer and business markets.

Explain how companies identify attractive market segments and choose a target marketing strategy.

Discuss how companies position their products for maximum competitive advantage in the marketplace.

3030

NEW PRODUCT DEVELOPMENT NEW PRODUCT DEVELOPMENT

Explain how companies find and develop new-product ideas.

List and define the steps in the new-product development process.

Describe the stages of the product life cycle.

Describe how marketing strategies change during the product’s life cycle.

Explain how companies find and develop new-product ideas.

List and define the steps in the new-product development process.

Describe the stages of the product life cycle.

Describe how marketing strategies change during the product’s life cycle.

3131

NEW PRODUCT

DEVELOPMENT

NEW PRODUCT

DEVELOPMENT

3232

New-Product Development Strategy New-Product Development Strategy

Strategies for Obtaining New-Product Ideas

Acquisition of:

Companies

Patents

Licenses

Acquisition of:

Companies

Patents

Licenses

New Products:

Original Products

Improvements

Modifications

New Products:

Original Products

Improvements

Modifications

3333

New-Product FailuresNew-Product Failures

Only 10% of new products are still on the market and profitable after 3 years.

Failure rate for industrial products is as high as 30%.

Why?Overestimation of market sizeDesign problemsIncorrectly positioned, priced, or advertisedPushed despite poor marketing research findingsDevelopment costsCompetition

Only 10% of new products are still on the market and profitable after 3 years.

Failure rate for industrial products is as high as 30%.

Why?Overestimation of market sizeDesign problemsIncorrectly positioned, priced, or advertisedPushed despite poor marketing research findingsDevelopment costsCompetition

3434

Major Stages in New-Product DevelopmentMajor Stages in New-Product Development

3535

New-Product Development Process

IdeaGeneration

Ideas from:Customers and usersMarketing

researchCompetitorsOther

marketsCompany

peopleIntermediaries

Screening

Strengthsand

weaknessesFit with

objectivesMarket

trendsRough ROI

estimate

IdeaEvaluation

Concepttesting

Customerreactions

Roughestimatesof cost, sales,

profits

Development

R & DDevelop

model orserviceprototype

Testmarketingmix

Revise plansas needed

ROI estimate

Commercial-ization

Finalizeproduct andmarketingplan

Startproduction

and marketing

“Roll out” in selectmarkets

Final ROIestimate

3636

Company EmployeesCompany Employees

CustomersCustomers

CompetitorsCompetitors

DistributorsDistributors

SuppliersSuppliers

Flow of Ideas and Product

3737

Idea ScreeningIdea Screening

Process to spot good ideas and drop poor ones.

Develop system to estimate: market size, product price, development time and costs, manufacturing costs, and rate of return.

Evaluate these findings against set of company criteria for new products.

Process to spot good ideas and drop poor ones.

Develop system to estimate: market size, product price, development time and costs, manufacturing costs, and rate of return.

Evaluate these findings against set of company criteria for new products.

3838

Concept Development and TestingConcept Development and Testing

Product Idea: idea for a possible product that the company can see itself offering.

Product Concept: detailed version of the idea stated in meaningful consumer terms.

Product Image: the way consumers perceive an actual or potential product.

Product Idea: idea for a possible product that the company can see itself offering.

Product Concept: detailed version of the idea stated in meaningful consumer terms.

Product Image: the way consumers perceive an actual or potential product.

3939

Marketing Strategy Development

Part One Describes:The Target Market

Planned Product PositioningSales, Market Share, & Profit Goals

Part One Describes:The Target Market

Planned Product PositioningSales, Market Share, & Profit Goals

Part Two Outlines the First-Year’s:Product’s Planned Price

DistributionMarketing Budget

Part Two Outlines the First-Year’s:Product’s Planned Price

DistributionMarketing Budget

Part Three Describes Long-Run:Sales & Profit Goals

Marketing Mix Strategy

Part Three Describes Long-Run:Sales & Profit Goals

Marketing Mix Strategy

4040

Business AnalysisBusiness Analysis

Involves a review of the sales, costs, and profit projections to assess fit with company objectives.

If yes, move to the product development phase.

Involves a review of the sales, costs, and profit projections to assess fit with company objectives.

If yes, move to the product development phase.

4141

Product DevelopmentProduct Development

Develop concept into physical product

Calls for large jump in investment

Prototypes are made

Prototype must have correct physical features and convey psychological characteristics

Develop concept into physical product

Calls for large jump in investment

Prototypes are made

Prototype must have correct physical features and convey psychological characteristics

4242

Test MarketingTest Marketing

Product and program introduced in more realistic market setting.

Not needed for all products.

Can be expensive and time consuming, but better than making major marketing mistake.

Product and program introduced in more realistic market setting.

Not needed for all products.

Can be expensive and time consuming, but better than making major marketing mistake.

4343

Test MarketingTest Marketing

Nokia test-marketed its new N-Gage cell phone/mobile game player extensively before introducing it worldwide.

4444

CommercializationCommercialization

Must decide on timing (i.e., when to introduce the product).

Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).

Must develop a market rollout plan.

Must decide on timing (i.e., when to introduce the product).

Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).

Must develop a market rollout plan.

4545

Organizing New-Product DevelopmentOrganizing New-Product Development

Sequential Approach: each stage completed before moving to next phase of the project.

Simultaneous Approach: Cross-functional teams work through overlapping steps to save time and increase effectiveness.

Sequential Approach: each stage completed before moving to next phase of the project.

Simultaneous Approach: Cross-functional teams work through overlapping steps to save time and increase effectiveness.

4646

THEORY OF DIFFUSION OF A NEW PRODUCTTHEORY OF DIFFUSION OF A NEW PRODUCT

21/2 % INNOVATORS

131/2%

EARLY ADOPTERS

34%LATE

MAJORITY16%

LAGGARDS

34%EARLY

MAJORITY

4747

THE CONSUMER ADOPTIONPROCESS (STAGES IN THE ADOPTION PROCESS )THE CONSUMER ADOPTIONPROCESS (STAGES IN THE ADOPTION PROCESS )

Awareness : The consumer becomes aware of the innovation but lacks information about it.

Interest : The consumer is stimulated to seek information about the innovation.

Evaluation : The consumer considers whether to try the innovation.

Trial : The consumer tries the innovation to improve his or her estimate of its value.

Adoption : The consumer decides to make full and regular use of the innovation.

Awareness : The consumer becomes aware of the innovation but lacks information about it.

Interest : The consumer is stimulated to seek information about the innovation.

Evaluation : The consumer considers whether to try the innovation.

Trial : The consumer tries the innovation to improve his or her estimate of its value.

Adoption : The consumer decides to make full and regular use of the innovation.