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MKT3 - Slide 1 to 18 1 3. Marketing Strategies MKT 3.

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Presentation on theme: "MKT3 - Slide 1 to 18 1 3. Marketing Strategies MKT 3."— Presentation transcript:

1 MKT3 - Slide 1 to Marketing Strategies MKT 3

2 MKT3 - Slide 1 to 182 Marketing Opportunities Breakthrough opportunities – help to develop hard-to-copy marketing strategies that are profitable in the long-term Breakthrough opportunities – help to develop hard-to-copy marketing strategies that are profitable in the long-term Even if a company cant get breakthrough opportunities, it must strive for competitive advantage: Even if a company cant get breakthrough opportunities, it must strive for competitive advantage: When its target market prefers its marketing mix to that of a competitor When its target market prefers its marketing mix to that of a competitor Must provide superior value and satisfy customers better than competitors Must provide superior value and satisfy customers better than competitors Sources of competitive advantage: price advantage, well-known brand, reliable distribution channels, strong sales force Sources of competitive advantage: price advantage, well-known brand, reliable distribution channels, strong sales force

3 MKT3 - Slide 1 to 183 Competitive Strategies Porters generic strategies: Porters generic strategies: Cost leadership Cost leadership Differentiation Differentiation Focus: Focus: Differentiation focus – differentiate in one/small number of target market segments; provide products different from competitor who caters for a broader group of customers (niche) Differentiation focus – differentiate in one/small number of target market segments; provide products different from competitor who caters for a broader group of customers (niche) Cost focus – lower cost advantage in one/small number of market segments; e.g., product similar to high-priced product, but acceptable to segment (me-too product) Cost focus – lower cost advantage in one/small number of market segments; e.g., product similar to high-priced product, but acceptable to segment (me-too product)

4 MKT3 - Slide 1 to 184 Marketing Mix – 4 Ps Product Product Price Price Promotion Promotion Place Place

5 MKT3 - Slide 1 to 185 Marketing Mix – 4 Ps Product Product Market research indicates what customer wants Market research indicates what customer wants Then, match product – packaging design, materials used, size & quantity Then, match product – packaging design, materials used, size & quantity Need to track – customers needs change over time Need to track – customers needs change over time

6 MKT3 - Slide 1 to 186 Marketing Mix – 4 Ps Price: Price: Need to recoup overheads, costs. Need to recoup overheads, costs. Need to compete Need to compete Need to match what customers are willing to pay Need to match what customers are willing to pay Need to fine tune: Need to fine tune: Loss leader pricing – lowering price to attract customers (you may make a loss, but customer may buy other products). For products in maturity/decline Loss leader pricing – lowering price to attract customers (you may make a loss, but customer may buy other products). For products in maturity/decline Penetration pricing – lower price to discourage competitors/induce interest in product at introductory stage Penetration pricing – lower price to discourage competitors/induce interest in product at introductory stage Price skimming – keep price artificially high. To recoup costs & make profits. Good for products that are new/in demand (growth stage) Price skimming – keep price artificially high. To recoup costs & make profits. Good for products that are new/in demand (growth stage) Differential pricing – same product to be sold at different costs in different markets Differential pricing – same product to be sold at different costs in different markets

7 MKT3 - Slide 1 to 187 Marketing Mix – 4 Ps Place: How you will sell your product: Place: How you will sell your product: Direct selling – door-to-door, retailing, mail order, e- commerce; complete control and easy to get customer info, but need storage/retail premises Direct selling – door-to-door, retailing, mail order, e- commerce; complete control and easy to get customer info, but need storage/retail premises Direct to retailer – avoid problems related to direct selling, but needs admin to control, and sales force. Loss of control/customer info Direct to retailer – avoid problems related to direct selling, but needs admin to control, and sales force. Loss of control/customer info Wholesaler – lose identity; lose customer contact, but less headaches Wholesaler – lose identity; lose customer contact, but less headaches Could have combinations Could have combinations

8 MKT3 - Slide 1 to 188 Marketing Mix – 4 Ps Promotion: Thru: Promotion: Thru: Mass media (TV, magazines, Internet, radio) Mass media (TV, magazines, Internet, radio) Personal selling Personal selling Non-personal communication (persuasion advertising, competitions, free samples) Non-personal communication (persuasion advertising, competitions, free samples) Others (PR, free publicity) Others (PR, free publicity) Message should be geared to market segment targeted Message should be geared to market segment targeted

9 MKT3 - Slide 1 to 189 A word about advertising… Could concentrate on companys general image or particular product Could concentrate on companys general image or particular product Main forms: Main forms: TV, radio, newspapers/magazines, travel trade press, videos, posters, cinema, exhibitions/trade fairs, Internet TV, radio, newspapers/magazines, travel trade press, videos, posters, cinema, exhibitions/trade fairs, Internet

10 MKT3 - Slide 1 to 1810 Marketing of Services Marketing of services can cause customer dissatisfaction Marketing of services can cause customer dissatisfaction Marketing: Important not to over-promise, but, at the same time, attract customers Marketing: Important not to over-promise, but, at the same time, attract customers Need to consider product/service mix first Need to consider product/service mix first Apply four Ps: Apply four Ps: - Product (core service) - Product (core service) - Place (access & location) - Place (access & location) - Price - Price - Promotion - Promotion

11 MKT3 - Slide 1 to 1811 Marketing of Services For services, need to apply more Ps (according to Booms & Bitner) For services, need to apply more Ps (according to Booms & Bitner) - Participants (employees & customers) - Participants (employees & customers) - Physical evidence (tangibles, ie, décor, layout, etc) - Physical evidence (tangibles, ie, décor, layout, etc) - Process (all the steps that deliver the service), ie, ease of use, volume, etc - Process (all the steps that deliver the service), ie, ease of use, volume, etc

12 MKT3 - Slide 1 to 1812 Marketing of Services Other factors that affect the customers purchase decision: Other factors that affect the customers purchase decision: - Safety - Safety - Convenience - Convenience - Flexibility - Flexibility - Speed - Speed - Reputation - Reputation - Availability - Availability - Package (explicit & implicit) - Package (explicit & implicit) - Value for the customer - Value for the customer

13 MKT3 - Slide 1 to Four Non-price Competitive Strategies (Ansoff Matrix) Products Existing Existing New Market Penetration New MarketSegments Product Development Market Development Diversification

14 MKT3 - Slide 1 to 1814 Market Segmentation Two step process: Two step process: Naming broad markets – this is the process of disaggregation; e.g., a car manufacturer focuses on the generic market transporting people. Then further breakdown to cars, trucks, etc Naming broad markets – this is the process of disaggregation; e.g., a car manufacturer focuses on the generic market transporting people. Then further breakdown to cars, trucks, etc Segmenting the broad market in order to select target markets; this is an aggregating process where similar customers (with similar needs) are grouped Segmenting the broad market in order to select target markets; this is an aggregating process where similar customers (with similar needs) are grouped A market segment is relatively homogeneous (similar) – customers who will respond in the same way to a marketing mix A market segment is relatively homogeneous (similar) – customers who will respond in the same way to a marketing mix Marketers group individual customers into workable number of relatively homogeneous target markets – then treat each target market differently Marketers group individual customers into workable number of relatively homogeneous target markets – then treat each target market differently

15 MKT3 - Slide 1 to 1815 Market Segmentation market segments should be: market segments should be: Internally homogeneous in terms of their response to a marketing mix Internally homogeneous in terms of their response to a marketing mix Externally heterogeneous – different segments should be different Externally heterogeneous – different segments should be different Substantial – a market segment should be substantial enough to be profitable Substantial – a market segment should be substantial enough to be profitable Operational – Its segmentation dimensions should be useful in identifying customers and deciding on a marketing mix Operational – Its segmentation dimensions should be useful in identifying customers and deciding on a marketing mix

16 MKT3 - Slide 1 to 1816 Market Segmentation Marketers use market dimensions to segment markets. The main dimensions are: Marketers use market dimensions to segment markets. The main dimensions are: Behavioral (needs & attitudes, e.g., prestige needs) Behavioral (needs & attitudes, e.g., prestige needs) Geographic Geographic Demographic (family status, education, ethnicity, social class) Demographic (family status, education, ethnicity, social class)

17 MKT3 - Slide 1 to 1817 Three ways to develop market oriented strategies… Single target market: pick one segment to target Single target market: pick one segment to target Multiple target market: Choose two or more segments – treat each segment differently (sometimes called mass marketing, e.g., coke) Multiple target market: Choose two or more segments – treat each segment differently (sometimes called mass marketing, e.g., coke) Combined target market – combine two or more segments into one larger target market, then approach it with one marketing mix Combined target market – combine two or more segments into one larger target market, then approach it with one marketing mix

18 MKT3 - Slide 1 to 1818 Positioning This is consumer perception of existing/ proposed product This is consumer perception of existing/ proposed product Marketers need to consider: Marketers need to consider: How a product is viewed in the market How a product is viewed in the market The need for repositioning a product The need for repositioning a product Ways of repositioning a product Ways of repositioning a product Positioning helps marketers by indicating all key dimensions of a market segment Positioning helps marketers by indicating all key dimensions of a market segment


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