Marketing Strategies

Marketing Strategy

Target Market

Marketing Mix

Target Market
A fairly homogeneous group of customers & people to whom company wishes to appeal Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.

What is Market Segmentation?

The breaking down or building up of potential buyers into groups called Market Segments

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Market Segmentation Variables

Demographic

Geographic

Market Segmentation Variables

Psychographic Behavioral
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Demographic Segmentation
Dividing the market into groups based on variables such as: Age Gender Family size Income Occupation Education

Psychographic Segmentation
Divides Buyers Into Different Groups Based on:

Behavioral Segmentation
Dividing the market into groups based on variables such as:
Occasions Benefits User status Usage rate Loyalty status Readiness stage Attitude toward product

Benefit segmentation of the beverage market

Which product would you choose for which benefit?

Relieve throat irritation Settle upset stomach Provide energy Help relax, unwind Provide nutrition Good taste

Quench thirst

Types of Market Segmentation

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate. Demographic segmentation is based on measurable statistics such as age, gender, ethnicity, education, occupation, income, and family status. Psychographic segmentation is based on variables such as values, attitudes, and lifestyle. Behavioral segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought

Each Market Segment should be

Measurable Accessible

Size, purchasing power, profiles

of segments can be measured.

Segments can be effectively

reached and served. Substantial

Segments are large or profitable

enough to serve.
Differential
Segments must respond

differently to different marketing mix elements & programs.

Effective programs can be designed

Actionable

to attract and serve the segments.

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Target Segment Size

mass

niche

customized

A niche market is a focused, targetable portion of a market.

Growth Strategies
Product/ Market Expansion Grid

Existing Products Existing Markets 1. Market Penetration

New Products 3. Product Development

New Markets

2. Market Development

4. Diversification

Product/ Market Expansion Grid

Market Penetration the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share. Market Development the firm seeks growth by targeting its existing products to new market segments.

Product/ Market Expansion Grid

Product Development the firms develops new products targeted to its existing market segments

Diversification the firm grows by diversifying into new businesses by developing new products for new markets.

Boston Consulting Group Growth-Share Matrix

Relative Market Share
High Stars High
High growth & share Profit potential May need heavy investment to grow

Low Question Marks

Market Growth Rate

High growth, low share Build into Stars or phase out Require cash to hold market share

Cash Cows Low

Low growth, high share Established, successful SBUs Produce cash

Dogs
Low growth & share Low profit potential

Product Life Cycle

Market introduction stage

costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage

Growth stage
costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market increased competition leads to price decreases

Maturity stage
costs are lowered as a result of production volumes increasing and experience curve effects sales volume peaks and market saturation is reached increase in competitors entering the market prices tend to drop due to the proliferation of competing products brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down

The Four Ps of the Marketing Mix

Product

Place

C
Price Promotion

Exhibit 2-7
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Product
Physical Goods Service Features Quality Level Accessories Installation Instructions Warranty Product Lines Packaging Branding

Place
Channel Type Recruiting Middlemen Market Exposure Managing Channels Kinds of Middleman Kinds and Locations of Stores How to Handle Transporting and Storing Service Levels

Promotion
Advertising Advertising is a non-personal and paid form of promotion that is delivered through selected mass media. Publicity publicity is the simple act of making a suggestion to a journalist that leads to the inclusion of a company or product in a story. Public Relation Personal Selling (face to face) Direct Marketing (emial, phone, mail) Event & Experiences (sponsorships)

Price
List price Flexibility Payment periods Discounts Allowances Credit terms

Product Classification

Product Types
Core Product Tangible Product Augmented Product

Classification of Product
Consumer Product Business Product

Classification of Consumer Product

Consumer Product Convenience Products Shopping Products Homogeneous items Heterogeneous Items Specialities Products Unsought Products

Stable Items

Impulse Items

Emergency Items