1. 3. Marketing Strategies
MKT 3
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2. Marketing Opportunities
Breakthrough opportunities – help to develop hard-to-copy marketing strategies that are profitable in the long-term
Even if a company can’t get breakthrough opportunities, it must strive for competitive advantage:
When its target market prefers its marketing mix to that of a competitor
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
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3. Competitive Strategies
Porter’s generic strategies:
Cost leadership
Differentiation
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)
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)
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4. Marketing Mix – 4 Ps Product Price Promotion Place
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5. Marketing Mix – 4 Ps Product
Market research indicates what customer wants
Then, match product – packaging design, materials used, size & quantity
Need to track – customers’ needs change over time
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6. Marketing Mix – 4 Ps Price: Need to recoup overheads, costs.
Need to compete
Need to match what customers are willing to pay
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
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)
Differential pricing – same product to be sold at different costs in different markets
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7. Marketing Mix – 4 Ps 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 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
Could have combinations
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8. Marketing Mix – 4 Ps Promotion: Thru:
Mass media (TV, magazines, Internet, radio)
Personal selling
Non-personal communication (persuasion advertising, competitions, free samples)
Others (PR, free publicity)
Message should be geared to market segment targeted
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9. A word about advertising…
Could concentrate on company’s general image or particular product
Main forms:
TV, radio, newspapers/magazines, travel trade press, videos, posters, cinema, exhibitions/trade fairs, Internet
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10. Marketing of Services
Marketing of services can cause customer dissatisfaction
Marketing: Important not to over-promise, but, at the same time, attract customers
Need to consider product/service mix first
Apply four P’s:
- Product (core service)
- Place (access & location)
- Price
- Promotion
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11. Marketing of Services
For services, need to apply more P’s (according to Booms & Bitner)
- Participants (employees & customers)
- Physical evidence (tangibles, ie, décor, layout, etc)
- Process (all the steps that deliver the service), ie, ease of use, volume, etc
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12. Marketing of Services
Other factors that affect the customer’s purchase decision:
- Safety
- Convenience
- Flexibility
- Speed
- Reputation
- Availability
- Package (explicit & implicit)
- Value for the customer
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13. Four Non-price Competitive Strategies (Ansoff Matrix)
Products
Existing
New
Market
Penetration
Segments
Product
Development
Diversification
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14. Market Segmentation 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
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
Marketers group individual customers into workable number of relatively homogeneous target markets – then treat each target market differently
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15. Market Segmentation market segments should be:
Internally homogeneous in terms of their response to a marketing mix
Externally heterogeneous – different segments should be different
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
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16. Market Segmentation
Marketers use market dimensions to segment markets. The main dimensions are:
Behavioral (needs & attitudes, e.g., prestige needs)
Geographic
Demographic (family status, education, ethnicity, social class)
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17. Three ways to develop market oriented strategies…
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)
Combined target market – combine two or more segments into one larger target market, then approach it with one marketing mix
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18. Positioning This is consumer perception of existing/ proposed product
Marketers need to consider:
How a product is viewed in the market
The need for repositioning a product
Ways of repositioning a product
Positioning helps marketers by indicating all key dimensions of a market segment
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