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Scanning the Marketing

Environment

Objectives
Tracking & Identifying Opportunities in the
Macroenvironment
Demographic, Economic, Natural,
Technological, Political, & Cultural
Developments

Macroenvironmental Influences on
the Marketing Mix
Science
&
Tech.

Physical
environ.

Marketing
Mix

Sociocultural

Demographic

Economic
&
Competition

Political
&
Legal

Macroenvironment:
Physical Environment
Ecological systems
Natural resources
Climate

Geography
Pollution levels
Water & Air

Demographic Environment
Worldwide Population Growth
Population Age Mix
Ethnic Markets
Educational Groups
Household Patterns

Geographical Shifts in Population


Shift from Mass Market to Micro markets

Economic Environment
Income Distribution
Subsistence economies
Raw-material-exporting economies
Industrializing economies

Industrial economies

Savings, Debt, &


Credit Availability

Changing Role
of Government

Higher Pollution
Levels

Natural
Environment

Increased Costs
of Energy

Shortage of
Raw Materials

Accelerating Pace
of Change

Unlimited Opportunities
for Innovation

Issues in the Technological


Environment

Varying
R & D Budgets

Increased
Regulation

Increased
Legislation
PoliticalLegal
Environment

SpecialInterest
Groups

Social/Cultural Environment
Of
Oneself
Of
the Universe

Of
Nature

Views
That Express
Values

Of
Others

Of
Organizations

Of
Society

Social/Cultural Environment

s
THE FOUR C

Company

The Four

: Company

s
C

Total organization
Interactive
Flexibility
Entrepreneurial approach
Intrapreneurial approach

s
C:

The Four
Customers Economic Utility

Form Utility
Place Utility
Time Utility
Possession Utility

The Four Cs: Competitors


Levels
Product class
Product category
Brands

Type

Price
Form
Time
Location

Four Types of Competition


Price-based

Location-based

Quality-based

Time-based

The Four Cs:Collaborators

Alliances
Networks
Informal partnerships
Suppliers
Virtual corporations

Segmentation, Target and


Positioning
prashant@iimcal.ac.in

The Substance of Marketing


Want To Enter the Watch Business!!!
You Must Make A Set Of Important
(Marketing Related) Decisions!!!
WHAT ARE THESE DECISIONS???

The Probable Decisions are!!!


To which consumer should I sell my
watches?
How should I define the consumer I hope to
serve?
Should I think in terms of geography,
perhaps the country in which my consumer
lives?
Or may be the consumers income or sex or
fashion orientation is more important?

The Probable Decisions are!!!


What Product or Products should I offer?
For example should I offer digital or analog,
ornate or simple, multifunction or single
function?
How much should I charge for each watch?
Should I offer discounts to people who pay
cash or who buy in large amounts?

The Probable Decisions are!!!


Should I sell direct to consumers or through
stores, and if through stores, what type of
stores?
Do I want to offer my product in several
types of outlet or only in one type?
How do I select and service the particular
outlets I Chose?
Finally, How do I convince the store to carry
my brand?

The Probable Decisions are!!!


How should I communicate to the
consumers to whom I wish to sell?
Do I use advertising, and if so in what
media?
How do I reach the stores? Do I use sales
people?
Should the salespeople visit the stores or
should they just telephone them?

Views on the Marketing Processes


5-C Analysis
Customer
Competitor
Company
Collaborators
Context

S-T-P Marketing
Segmentation
Targeting
Positioning

4 Ps Marketing Plan
Product
Pricing
Promotion
Place

The Functional View

Views on the Marketing Processes

Understanding
Customer
Value

Creating
Customer
Value

Capturing
Customer
Value

Delivering
Customer
Value

The Process View

Sustaining
Customer
Value

Understanding Customer Value


Psychological

Functional

Economic

Steps in Market Segmentation,


Targeting,and Positioning

Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Market
Targeting

3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Market
Positioning

5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept

Why Segmentation ?
Not all buyers alike
Subgroups may be identified
Subgroups smaller and more
homogeneous
Easier to satisfy smaller groups

How to Segment & Target?


1.
Break
market
down

2.
Group
into
segments

3.
Choose
target
market

TARGET MARKET

Basic Market-Preference
Patterns

Quality

(c) Clustered
preferences

Economy

(b) Diffused
preferences

Economy

Economy

(a) Homogeneous
preferences

Quality

Quality

Bases for Segmenting


Consumer Markets
Demographic
Sociographic
Lifestyle
Geographic
Behavior
Consumption
Predispositions

Bases for Segmenting


Business Markets
Geography
Organizational charateristics
Purchase behavior
Usage patterns
Organizational predispositions

Step 1. Market Segmentation


Requirements for Effective Segmentation
Measurable

Size, purchasing power, profiles

Accessible

Segments can be effectively

of segments can be measured.

reached and served.

Substantial

Segments are large or

profitable enough to serve.

Differential
Actionable

Segments must respond

differently to different marketing


mix elements & programs.
Effective programs can be

designed to attract and serve


the segments.

Step 2. Market Targeting


Market Coverage Strategies
Company
Marketing
Mix

Market

A. Undifferentiated Marketing

Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3

Segment 1
Segment 2
Segment 3

B. Differentiated Marketing

Segment 1

Company
Marketing
Mix

Segment 2
Segment 3
C. Concentrated Marketing

Step 2. Market Targeting


Choosing a Market-Coverage
Strategy
Company Resources
Product Variability

Products Stage in the Life Cycle


Market Variability
Competitors Marketing Strategies

Step 3. Choosing a Positioning


Strategy
Products Position - the way the product is
defined by consumers on important
attributes - the place the product occupies
in consumers minds relative to competing
products.
Marketers must:

Plan positions to give their products the


greatest advantage in selected target markets,
Design marketing mixes to create these
planned positions.

Positioning
The way consumers perceive the brand
relative to its competition
ID competitive advantage
Stress salient characteristics
Differentiate

Identifying Possible Competitive


Advantages
Product
Differentiation
i.e. Features,
Performance, Style &
Design, or Attributes
Image
Differentiation
i.e. Symbols,
Atmospheres, Events

Services
Differentiation
i.e. Delivery, Installation,
Repair Services, Customer
Training Services
Personnel
Differentiation
i.e. Hiring, Training
Better People Than
Competitors Do

Five Patterns of Target Market


Selection
Single-segment
concentration

Product
specialization

Selective
specialization

M1 M2 M3

M1 M2 M3

M1 M2 M3

P1

P1

P1

P2

P2

P2

P3

P3

P3
Market
specialization

Full market
coverage

M1 M2 M3
P = Product
M = Market

M1 M2 M3

P1

P1

P2

P2

P3

P3

Segment Cross-Classification:
Aerobic Shoes
Gender

Geography

F
Japan
Western
Europe

U.S.
14 - 21

Age

22 - 29