Copy of Targeting-And-Positioning 1

8/8/2019 Copy of Targeting-And-Positioning 1

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Targeting andTargeting and

PositioningPositioning


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Target MarketingTarget Marketing

Target MarketTarget Market

Consists of a set of buyers who shareConsists of a set of buyers who share

common needs or characteristics that thecommon needs or characteristics that the

company decides to servecompany decides to serve


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Evaluating Market SegmentsEvaluating Market Segments

Segment size and growthSegment size and growth

Segment structural attractivenessSegment structural attractiveness Level of competitionLevel of competition

Substitute productsSubstitute products

Power of buyersPower of buyers

Powerful suppliersPowerful suppliers Company objectives and resourcesCompany objectives and resources


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Selecting Target Market SegmentsSelecting Target Market Segments

Undifferentiated (mass) marketingUndifferentiated (mass) marketing

Differentiated (segmented) marketingDifferentiated (segmented) marketing Concentrated (niche) marketingConcentrated (niche) marketing

Micromarketing (local or individual)Micromarketing (local or individual)


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FIVE PATTERNS OF TARGETFIVE PATTERNS OF TARGET

MARKET SELECTIONMARKET SELECTIONSingle Segment targetingSingle Segment targeting

Market SpecializationMarket Specialization

Product SpecializationProduct Specialization

Selective SpecializationSelective Specialization

Full CoverageFull Coverage


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Basic Target Marketing StrategiesBasic Target Marketing Strategies

Exhibit 6.6


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SingleSingle--segment concentrationsegment concentration

Porsche concentrates on the sports car market.Porsche concentrates on the sports car market.

Through concentrated marketing, the firm gains aThrough concentrated marketing, the firm gains a

strong knowledge of the segments needs andstrong knowledge of the segments needs and

achieves a strong market presence.achieves a strong market presence.

Furthermore, the firm enjoys operating economiesFurthermore, the firm enjoys operating economies

through specializing its production, distribution andthrough specializing its production, distribution and

promotion.promotion.

If it captures segment leadership, the firm can earnIf it captures segment leadership, the firm can earn

a high ROI.a high ROI.

However, concentrated marketing involve risks. AHowever, concentrated marketing involve risks. A

particular market segment may turn sour. Aparticular market segment may turn sour. Acom etitor ma invade the se ment.com etitor ma invade the se ment.


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Selective SpecializationSelective Specialization

The firm selects a number of segments,The firm selects a number of segments,

each objectively attractive andeach objectively attractive and

appropriate. There may be little or noappropriate. There may be little or no

synergy(cosynergy(co--operation) among theoperation) among the

segments, but each promises to be asegments, but each promises to be a

money maker.money maker.

This multi segment strategy has theThis multi segment strategy has theadvantage of diversifying the firms risk.advantage of diversifying the firms risk.


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Product specializationProduct specialization

The firm makes a certain product that it sells toThe firm makes a certain product that it sells to

several segments. An example would be aseveral segments. An example would be a

microscope manufacturer who sells to university,microscope manufacturer who sells to university,

government, and commercial laboratories. Thegovernment, and commercial laboratories. Thefirm makes different microscopes for thefirm makes different microscopes for the

different customer groups and builds a strongdifferent customer groups and builds a strong

reputation in the specific product area. Thereputation in the specific product area. The

downside risk is that the product may bedownside risk is that the product may besupplanted(take the place of) by an entirely newsupplanted(take the place of) by an entirely new

technology.technology.


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Market specializationMarket specialization

The firm concentrates on serving manyThe firm concentrates on serving many

needs of a particular customer group. Anneeds of a particular customer group. An

example would be a firm that sells anexample would be a firm that sells an

assortment(various) of products only toassortment(various) of products only to

university laboratories.university laboratories.

The downside risk is that the customerThe downside risk is that the customer

group may suffer budget cuts.group may suffer budget cuts.


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Full market coverageFull market coverage

The firm attempts to serve all customerThe firm attempts to serve all customer

groups with all the products they mightgroups with all the products they might

need.need.

Only very large firms such asOnly very large firms such as

Nokia(mobile phone market),Nokia(mobile phone market),

Toyota(vehicles market), and cocaToyota(vehicles market), and coca--colacola

(drinks market) can undertake a full(drinks market) can undertake a fullmarket strategy.market strategy.


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FACTORS CONSIDERED IMPORTANT INFACTORS CONSIDERED IMPORTANT IN

THE SELECTION OF TARGET MARKETTHE SELECTION OF TARGET MARKET

STRATEGYSTRATEGY1. Companys Resources1. Companys Resources

2. Product Homogeneity (of the2. Product Homogeneity (of the

same kind)same kind)3. Product Stage in the Life Cycle3. Product Stage in the Life Cycle

4. Market Homogeneity4. Market Homogeneity

5. Competitive Marketing Strategy5. Competitive Marketing Strategy


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Positioning(place occupied)Positioning(place occupied)

Positioning:Positioning:

The place the product occupies in consumersThe place the product occupies in consumersminds relative to competing products.minds relative to competing products.

Typically defined by consumers on the basisTypically defined by consumers on the basisof important attributes.of important attributes.

Involves implanting the brands uniqueInvolves implanting the brands uniquebenefits and differentiation in the customersbenefits and differentiation in the customers

mind.mind. Positioning maps that plot perceptions ofPositioning maps that plot perceptions of

brands are commonly used.brands are commonly used.


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POSITIONING STRATEGIESPOSITIONING STRATEGIES

Identifying possible competitiveIdentifying possible competitive

advantagesadvantages

Differentiation can be based on

Products

Services

ChannelsPeople

Image


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Product DifferentiationProduct Differentiation FormForm-- size, shape or physical structuresize, shape or physical structure

FeaturesFeatures-- supplement to basic function.supplement to basic function.

Performance QualityPerformance Quality--thethe level at which the productslevel at which the productsprimary characteristics operates.primary characteristics operates.

Conformance QualityConformance Quality-- the degree to which all the producedthe degree to which all the produced

units are identical and meet the promised specifications.units are identical and meet the promised specifications. DurabilityDurability-- a measure of the products expected operating lifea measure of the products expected operating life

under natural or stressful conditions.under natural or stressful conditions.

ReliabilityReliability-- a measure of the probability that a product will nota measure of the probability that a product will notmalfunction within a specified time period.malfunction within a specified time period.

ReparabilityReparability-- a measure of the ease of fixing a product when ita measure of the ease of fixing a product when itfailsfails StyleStyle

Quality can be communicated by choosingQuality can be communicated by choosingphysical signs and cuesphysical signs and cues


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Services DifferentiationServices Differentiation

Ordering easeOrdering ease

DeliveryDelivery

InstallationInstallationCustomer trainingCustomer training

Customer consultingCustomer consulting

Maintenance and repairMaintenance and repair


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Personnel DifferentiationPersonnel Differentiation

CompetenceCompetence

CourtesyCourtesy

CredibilityCredibilityReliabilityReliability

ResponsivenessResponsiveness

CommunicationCommunication


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Channel DifferentiationChannel Differentiation

CoverageCoverage

ExpertiseExpertise

PerformancePerformance


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Image DifferentiationImage Differentiation

Image is the way the public perceives theImage is the way the public perceives the

company or its products.company or its products.

Identity is the way a company aims toIdentity is the way a company aims toidentify or position itself or its products.identify or position itself or its products.

Symbols,Symbols, colourscolours, slogans, atmosphere,, slogans, atmosphere,

Events and employeeEvents and employee behaviourbehaviour


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Choosing the right competitiveChoosing the right competitive

advantageadvantageHow many differences to promote?

Unique selling proposition

Several benefits

Which differences to promote? Criteria include:

Important

Distinctive

Superior

Communicable

Preemptive(prevent)

Affordable

Profitable


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Developing and communicating aDeveloping and communicating a

positioning strategypositioning strategy

All products can be differentiated to someAll products can be differentiated to someextent. But not all differences are meaningfulextent. But not all differences are meaningfulor worthwhile. A difference is worthor worthwhile. A difference is worth

establishing to the extent that it satisfies theestablishing to the extent that it satisfies thefollowing criteria :following criteria :

Important : The difference delivers a highlyImportant : The difference delivers a highlyvalued benefit to a sufficient numbers ofvalued benefit to a sufficient numbers ofbuyers.buyers.

Distinctive : The difference is delivered in aDistinctive : The difference is delivered in adistinctive way.distinctive way.


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Developing and communicating aDeveloping and communicating a

positioning strategypositioning strategy

Superior : The difference is superior toSuperior : The difference is superior to

other ways of obtaining the benefit.other ways of obtaining the benefit.

Preemptive : The difference cannot bePreemptive : The difference cannot beeasily copied by competitors.easily copied by competitors.

Affordable : The buyer can afford toAffordable : The buyer can afford to

pay for the difference.pay for the difference.

Profitable : The company will find itProfitable : The company will find it

profitable to introduce the difference.profitable to introduce the difference.

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Copy of Targeting-And-Positioning 1