1. Marketing Strategy Planning Process
21/04/2017
This slide relates to the material on pp
Instructor’s Note: This slide corresponds to Exhibit 3-1 on p. 65 and Transparency 22. See also Transparency 21 and Overheads
This slide can be reused through the course to reinforce to students how individual topics relate to the “big picture”
Customers
Company
Competitors S. W. O. T.
Segmentation
& Targeting
Differentiation
& Positioning
Product
Place
Promo
Price
Narrowing down to focused strategy with screening criteria
External Market Environment
Target Market
Summary Overview
Marketing strategy planning tries to match opportunities to the firm’s resources and its objectives. A key feature of successful marketing strategy planning is identifying attractive opportunities uniquely fitted to the strengths of the firm.
Attractive Opportunities
Breakthrough Opportunities. The best opportunities come when innovators develop hard-to-copy marketing strategies that will be profitable for a very long time.
Teaching Tip: For a long time, Intel had a competitive advantage and high profits because most of the popular software was designed to work only on Intel computers.
Competitive Advantage. With or without a breakthrough opportunity, long run success requires competitive advantage -- that is, having a marketing mix that the target market sees as better than a competitor’s mix.
Differentiation. This means that the firm’s marketing mix if distinct from and better than what is available from a competitor. Differentiation often requires that the firm fine-tune all of the elements of its marketing mix to the specific needs of a distinctive target market.
S.W.O.T. Analysis. This analysis highlights advantages and disadvantages and is a useful aid for identifying relevant screening criteria and for zeroing in on a feasible strategy. It identifies and lists the firm’s strengths and weaknesses and its opportunities and threats. Then, these can be compared with the pros and cons of different strategies that are considered.
Exhibit 3-1
3-3

2. What is Market Segmentation?
Market segmentation: The act of dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products and/or marketing mixes.

3. Market Segmentation A. Product-market showing three segments
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This slide relates to the material on pp
Instructor’s Note: This slide corresponds to Exhibit 3-6 on p. 74 and Transparency 26. See also Transparency 27.
Status dimension
Dependability dimension
A. Product-market showing
three segments
B. Product-market showing
six segments
Summary Overview
Market segmentation is a two-step process of: (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes to serve them. This process fails too often because the marketer does not realize the complexities of consumer behavior and attempts to categorize a market around too few consumer-related variables of distinction. Segmenting should be considered an aggregating process of clustering people with similar needs into individual market segments.
Market Segmentation
A market segment is a relatively homogeneous group of customers who will respond to a marketing mix in a similar way.
Good market segments meet the following criteria:
1. Homogeneous Within. The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.
2. Heterogeneous Between. The customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.
3. Substantial. The segment must be big enough to be profitable.
4. Operational. The segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables.
Exhibit 3-6
3-9

4. Bases for Segmentation
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Sociocultural Segmentation
Usage-Situation Segmentation
Hybrid Segmentation Approaches

5. Market Segmentation SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Region
Southwest, Northeast
City Size
Major metropolitan cities, small cities, towns(Tire1,II,III
Density of area
Urban, suburban, rural
Climate
Temperate, hot, humid, rainy
Demographic Segmentation
Age
Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Sex
Male, female
Marital status
Single, married, divorced, living together, widowed
Income
Under Rs25,000, Rs25,000-Rs34,999, Rs35,000-Rs49,999, Rs50,000-Rs74,999, Rs75,000-Rs 99,999, Rs100,000 and over
Education
Some high school, high school graduate, some college, college graduate, postgraduate
Occupation
Professional, blue-collar, white-collar, agricultural, military, own business

6. Table 3.2, continued SEGMENTATION SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Learning-involvement
Perception
Personality
Needs-motivation
Shelter, safety, security, affection, sense of self-worth
Extroverts, novelty seeker, aggressives, low dogmatics
Low-risk, moderate-risk, high-risk
Low-involvement, high-involvement
Psychographic
Subcultures (Race/ethnic)
Religion
Cultures
(Lifestyle) Segmentation
Economy-minded, couch potatoes, outdoors enthusiasts, status seekers
Gujrati, Marathi,Punjabi,Bengali,
Hindu,Muslim,Christan,Sikh
Brahmin, Kshatriya,Baniya
Family life cycle
Social class
Lower, middle, upper
Bachelors, young married, full nesters, empty nesters
Attitudes
Positive attitude, negative attitude
Sociocultural Segmentation

7. SEGMENTATION BAS
SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Brand loyalty
Awareness status
Usage rate
Heavy users, medium users, light users, non users
Unaware, aware, interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time
Leisure, work, rush, morning, night
Personal, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Person
Self, family members, friends, boss, peers
Benefit Segmentation
Convenience, social acceptance, long lasting, economy, value-for-the-money
Geodemographics
“Money and Brains,” “Black Enterprise,” “Old Yankee Rows,” “Downtown Dixie-Style”
Demographic/
Psychographics
Combination of demographic and psychographic profiles of consumer segments profiles
SRI VALSTM
Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler
Hybrid Segmentation

8. Market-Oriented Approaches
21/04/2017
This slide relates to the material on pp
Instructor’s Note: This slide corresponds to Exhibit 3-7 on p. 76 and Transparency 28, See also Overhead 26.
There are several slides in this series; please see student handout pages.
The
Strategy
A segmenter
Using single target market approach— can aim at one submarket with one marketing mix
Summary Overview
Market-oriented strategies refine the segmentation process into actionable submarkets.
Three Basic Ways to Develop Market-Oriented Strategies
1. Single Target Market Approach. This involves segmenting the market and picking one of the homogeneous segments as the firm’s target market.
2. Multiple Target Market Approach. This involves segmenting the market and choosing two or more segments, then treating each segment as a separate target market needing a different marketing mix.
3. Combined Target Market Approach. This involves combining two or more submarkets into one larger target market as a basis for one strategy. This strategy seeks economies from having one effort serve more than one market but is risky in that more focused competitors are very likely to do a better job meeting target needs.
3-10

9. Market-Oriented Approaches
21/04/2017
This slide relates to the material on pp
Instructor’s Note: This slide corresponds to Exhibit 3-7 on p. 76 and Transparency 28. See also Overhead 26.
Strategy
Three
Two
One
A segmenter
Using multiple target market approach— can aim at two or more submarkets with different marketing mixes
Summary Overview
Market-oriented strategies refine the segmentation process into actionable submarkets.
Three Basic Ways to Develop Market-Oriented Strategies
1. Single Target Market Approach. This involves segmenting the market and picking one of the homogeneous segments as the firm’s target market.
2. Multiple Target Market Approach. This involves segmenting the market and choosing two or more segments, then treating each segment as a separate target market needing a different marketing mix.
3. Combined Target Market Approach. This involves combining two or more submarkets into one larger target market as a basis for one strategy. This strategy seeks economies from having one effort serve more than one market but is risky in that more focused competitors are very likely to do a better job meeting target needs.

10. Step 2. Market Targeting Market Coverage Strategies
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Market Coverage Strategies
This CTR corresponds to Figure 7-4 on p. 217 and relates to the discussion on pp
Company
Marketing
Mix
Market
Company
Marketing Mix 1
Segment 1
Company
Marketing Mix 2
Segment 2
A. Undifferentiated Marketing
Company
Marketing Mix 3
Segment 3
Market Coverage Strategies
Undifferentiated Marketing. This strategy uses the same marketing mix for the entire market. This strategy focuses on the common needs of the market rather than differences in it. Undifferentiated marketing provides economies of scale on product costs but may be limited in application.
Differentiated Marketing. This strategy targets several market segments and designs separate marketing mixes for each of them. Product and marketing variation also helps company image and may produce loyalty in consumers as they change segments.
Concentrated Marketing. This strategy commits a company to pursue a large share of one or more submarkets. Economies and segment knowledge and service are strengths of this approach but risk due to smaller market size is greater.
Segment 1
Company
Marketing
Mix
Segment 2
B. Differentiated Marketing
Segment 3
C. Concentrated Marketing

11. Step 2. Market Targeting Choosing a Market-Coverage Strategy
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Choosing a Market-Coverage Strategy
This CTR relates to the discussion on pp
Company
Resources
Product
Variability
Choosing a Market-Coverage Strategy
Factors to consider in choosing a market-coverage strategy include:
Company Resources. Sometimes the resources of a firm make a strategy decision fairly simple. For example, a small firm with limited resources is more likely to be successful implementing a concentrated strategy than a full coverage one.
Product Variability. The higher the degree of product variation or differentiation, the greater the likelihood that a differentiated or concentrated strategy will be necessary to meet consumer demands for choice.
Stage in Life Cycle. Introduction and early growth stages of the product life cycle are more likely to support single-version products. As the market matures, greater consumer numbers and a wider variety of tastes demand more differentiation.
Discussion Note: The cost of developing new products is often given as a reason for single-version rollouts. But it is important to remember that consumers don’t know how to use new products as well and so it makes sense to keep a product simple to help consumer learn about its benefits first and then let their experience with product use guide the introduction of additional features.
Market Variability. If taste differences in the market are small, then undifferentiated marketing is appropriate.
Competitor’s Marketing Strategies. Selecting a coverage strategy is not done in a vacuum. When the market is already served by competitor using a segmentation strategy, undifferentiated marketing is less likely to be successful. However, competitors using undifferentiated strategies may be vulnerable to a well-planned and executed differentiation strategy.
Product’s Stage
in the Product Life Cycle
Market
Variability
Competitors’
Marketing Strategies

12. Single - Segment Specialization
Five Patterns of Target Market Selection
Single - Segment Specialization
A firm selects one segments in the market and makes one product for them .Woodland shoes M3 M1 M2 P1 P2 P3

13. Selective Specialization
Five Patterns of Target Market Selection
Selective Specialization
A firm selects a number of segments, each objectively attractive and appropriate. M3 M1 M2 P1 P2 P3

14. Product Specialization
The firm makes a certain product that it sells to several different market segments. M1 M2 M3 P1 P2 P3

15. Market Specialization
The firm concentrates on serving many needs of a particular customer group. M3 M1 M2 P1 P2 P3

16. Full Market Coverage
The firm attempts to serve all customer groups with all the products they might need. Only very large firms can attempt to do that M1 M2 M3 P1 P2 P3
P= Product
M= Market

17. Positioning Strategy

18. Step 3. Choosing a Positioning Strategy
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Step 1. Identifying Possible Competitive Advantages
Step 2. Selecting the Right Competitive Advantage
Step 3. Communicating and Delivering the Chosen Position

19. Step 3. Positioning for Competitive Advantage
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Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”.
Marketers must:
Plan positions to give products the greatest advantage
Develop marketing mixes to create planned positions

20. Step 3. Positioning for Competitive Advantage: Strategies
Product Positioning
This CTR relates to the material on pp. 220.
21/04/2017
Step 3. Positioning for Competitive Advantage: Strategies
Product
Class
Product
Attributes
Away from
Competitors
Benefits
Offered
Market Positioning Strategies
A product's position is the way the product is defined by consumers on important attributes. More directly, product position is the place the product occupies in the consumers’ minds relative to competing products.
Discussion Note: Students may need prompting to realize that marketers don’t control the product’s position, consumers do. The strategies discussed below represent the inputs marketers make to influence how the consumer ultimately determine the product’s position.
A product's position can be based on a number of variables including:
Product Attributes. This positions the product on unique or distinguishing features it possesses such as a low price, unique technology, versatility or other features.
Benefits Offered. Positioning can be based upon the specific value provided.
Usage Occasions. The product usage associated can with special occasions or values ("Andre for the Holidays")
Users. A product can be positioned to its most important users (Miller Beer's heavy user positioning, "Tastes Great Less Filling")
Against a Competitor. This strategy is appropriate for substitutes that cost less.
Away from Competitors. This positions the product as unique in some respect and/or worth it.
Product Class. The company may vary positioning as needed in relation to one or more competitors. B A E D C H G F
Against a
Competitor
Usage
Occasions
Users

21. Developing Competitive Differentiation
Product
Service
Developing Competitive Differentiation
21/04/2017
Positioning for Competitive Advantage
This CTR relates to the discussion on pp
Areas for Competitive
Differentiation
Competitive Advantage
Competitive Advantage is created by differentiating the product from those of competitors. Key areas for competitive differentiation include:
Product Differentiation. This can be based upon features or performance.
Teaching Tip: Drive a Hyundai and a Lexus on the same afternoon to experience performance differentiation.
Services Differentiation. This may come from delivery, installation, repair, or training advantages.
Teaching Tip: Does anyone think that television cable service would not improve if there were more than one cable provider per area?
Personnel Differentiation. This is derived from a superior workforce.
Teaching Tip: Surely students appreciate their experience in your class versus those marketing classes at that other school in state?
Image Differentiation. This can be generated from effective use of symbols in association with product consumption.
Teaching Tip: Examples of effective use of symbols include Prudential Securities, “Rock Solid - Market Wise” and Merrill Lynch “Bullish on America.”
Personnel
Image

22. Identifying Possible Competitive Advantages
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Identifying Possible Competitive Advantages
Product
Differentiation
(e.g., consistency, durability, reliability, repairability)
Services
Differentiation
(e.g., speed, convenience, careful delivery)
Channel
Differentiation
Image
Differentiation
(e.g., convey benefits and positioning)
People
Differentiation
(e.g., hiring, training better people than competitors)

23. Selecting the Right Competitive Advantages
Promoting Differences
This CTR relates to the material on pp
Discussion Note: The key to selecting the right competitive advantage is to develop a unique selling proposition (USP) for the product and stick to it.
Selecting the Right Competitive Advantages
21/04/2017
Important
Profitable
Distinctive
Criteria
for
Determining
Which
Differences to
Promote
Selecting the Right Competitive Advantage
Differences selected to promote competitive advantage should satisfy the following criteria:
Important. The difference must deliver a highly valued benefit to target buyers.
Distinctive. Competitors do not offer the difference, or the company offers the difference in a more distinctive way.
Superior. The difference should be superior to other ways that customers might obtain the same benefit.
Communicable. The difference is communicable and visible to buyers.
Preemptive. Competitors cannot easily copy the difference. This may be a result of innovative technology, production economies, distribution economies, and/or proprietary rights.
Affordable. Buyers in the target market must be able to pay for the difference.
Profitable. The difference must be profitable for the company to offer.
Affordable
Superior
Communicable
Preemptive

25. Communicating and Delivering the Chosen Position
Company must take strong steps to deliver and communicate the desired position to target consumers.
The marketing mix efforts must support the positioning strategy.
Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

26. Positioning of Different Bar Soaps
21/04/2017
This slide relates to the material on pp
Instructor’s Note: This slide corresponds to Exhibit 3-13 on p. 86 and Transparency 32. See also Overheads
Positioning of Different Bar Soaps
High
moisturizing
Pears
LUX International 7 4
Cinthol
Dove 2 5
Santoor
Summary Overview
Computer-aided methods afford marketers additional help in segmenting markets. The ability of the computer to record, sort, recombine, and analyze a great many variables relating to consumer behavior at the same time allows marketers to develop much more sophisticated market segments.
More Sophisticated Techniques for Segmentation and Positioning
Clustering. Clustering techniques try to find similar patterns within sets of data. Patterns of behavior can be combined into new needs analysis and product design and marketing communications can focus on how these needs can be filled.
Database Sorting. Past customer behavior is often the source of information about new purchase opportunities or identification of cyclical buying habits.
Teaching Tip: Database sorting is especially helpful in providing services. For example, a financial advisor enters a great deal of information about a client in a database. By contacting the client before key events, such as an wedding anniversary, the advisor demonstrates to the client the importance of their continuing relationship and how well the advisor has internalized what is important to the client.
Differentiation. Differentiation refers to how the marketer tries to distinguish her or his offer in the marketplace -- how it is set off from the competition in hopefully meaningful ways.
Positioning. Positioning refers to how customers think about proposed and/or present brands in a market. Marketing managers must always remember that it is the customer’s perception of where a product or brand is in relation to the other choices that is important.
Lux 8
Nondeodorant 3
Deodorant 1
Medimix
Margo
“Product Space” Representing Consumers’ Perception for Different Brands of Bar Soap
Lifebuoy 6
Low
moisturizing
3-14

27. Possible Value Propositions
21/04/2017
Possible Value Propositions

28. Positioning Errors Underpositioning:
Failing to really position the company at all.
Overpositioning:
Giving buyers too narrow a picture of the company.
Confused Positioning:
Leaving buyers with a confused image of a company.

29. Rest Stop: Reviewing the Concepts
Define the three steps of target marketing: market segmentation, market targeting, and market positioning.
List and discuss the major bases for segmenting consumer and business markets.
Explain how companies identify attractive market segments and choose a target marketing strategy.
Discuss how companies position their products for maximum competitive advantage in the marketplace.

30. NEW PRODUCT DEVELOPMENT
Explain how companies find and develop new-product ideas.
List and define the steps in the new-product development process.
Describe the stages of the product life cycle.
Describe how marketing strategies change during the product’s life cycle.

31. NEW PRODUCT DEVELOPMENT

32. New-Product Development Strategy
Strategies for Obtaining New-Product Ideas
Acquisition of:
Companies
Patents
Licenses
New Products:
Original Products
Improvements
Modifications

33. New-Product Failures
Only 10% of new products are still on the market and profitable after 3 years.
Failure rate for industrial products is as high as 30%.
Why?
Overestimation of market size
Design problems
Incorrectly positioned, priced, or advertised
Pushed despite poor marketing research findings
Development costs
Competition

34. Major Stages in New-Product Development
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35. New-Product Development Process
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Idea
Generation
Ideas from:
Customers
and users
Marketing
research
Competitors
Other
markets
Company
people
Intermediaries
Screening
Strengths
and
weaknesses
Fit with
objectives
Market
trends
Rough ROI
estimate
Evaluation
Concept
testing
Customer
reactions
Rough
estimates
of cost,
sales,
profits
Development
R & D
Develop
model or
service
prototype
Test
marketing
mix
Revise plans
as needed
ROI estimate
Commercial
-ization
Finalize
product and
plan
Start
production
and marketing
“Roll out” in
select
Final ROI
Summary Overview
New products can be anything that in any way provides the company with another way to meet customer needs. This includes totally new inventions and simple color changes in existing products. Canada limits claims of “newness” to twelve months. Because new product success is important to companies seeking growth, most firms formalize the new- product development process.
New-Product Development Process
Idea Generation. New product ideas come from all over -- salespeople, production workers, customers, competitors -- anywhere! Sharp companies keep an open mind and eye to many relevant sources of new product ideas.
Screening. Screening involves evaluating the new idea in relation to strengths, weaknesses, opportunities, and threats facing the company--and also the company’s objectives and resources. Some companies also weigh ideas for their effect on consumer welfare. Safety must be considered. The Hazardous Products Act encourages safety in product design and better quality control. Also, product liability means that the company has the legal obligation to pay damages to persons injured by defective or unsafe products. Also, return on investment (ROI) forecasts can help prioritize product ideas.
Idea Evaluation. Here firms use concept testing -- getting reactions from customers about how well a new product idea fits their needs. Such market research can be informal or a very formal, systematic investigation.
Development. Here more research and development is conducted on approved product concepts. Use of computer-aided design software and working models are common.
Commercialization. At this stage the product is ready for market. The product form is selected and a complete marketing mix is designed for each target market.

36. Flow of Ideas and Product
Company Employees
Customers
21/04/2017
Competitors
Flow of Ideas and Product
Distributors
Suppliers

37. Idea Screening Process to spot good ideas and drop poor ones.
Develop system to estimate: market size, product price, development time and costs, manufacturing costs, and rate of return.
Evaluate these findings against set of company criteria for new products.

38. Concept Development and Testing
Product Idea: idea for a possible product that the company can see itself offering.
Product Concept: detailed version of the idea stated in meaningful consumer terms.
Product Image: the way consumers perceive an actual or potential product.

39. Marketing Strategy Development
Part One Describes:
The Target Market
Planned Product Positioning
Sales, Market Share, & Profit Goals
Marketing Strategy Development
21/04/2017
Part Two Outlines the First-Year’s:
Product’s Planned Price
Distribution
Marketing Budget
Part Three Describes Long-Run:
Sales & Profit Goals
Marketing Mix Strategy

40. Business Analysis
Involves a review of the sales, costs, and profit projections to assess fit with company objectives.
If yes, move to the product development phase.

41. Product Development Develop concept into physical product
Calls for large jump in investment
Prototypes are made
Prototype must have correct physical features and convey psychological characteristics

42. Test Marketing
Product and program introduced in more realistic market setting.
Not needed for all products.
Can be expensive and time consuming, but better than making major marketing mistake.

43. Test Marketing
Nokia test-marketed its new N-Gage cell phone/mobile game player extensively before introducing it worldwide.

44. Commercialization
Must decide on timing (i.e., when to introduce the product).
Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).
Must develop a market rollout plan.

45. Organizing New-Product Development
Sequential Approach: each stage completed before moving to next phase of the project.
Simultaneous Approach: Cross-functional teams work through overlapping steps to save time and increase effectiveness.

46. THEORY OF DIFFUSION OF A NEW PRODUCT
21/2 %
INNOVATORS
131/2%
EARLY
ADOPTERS
34%
LATE
MAJORITY
16%
LAGGARDS

47. THE CONSUMER ADOPTIONPROCESS (STAGES IN THE ADOPTION PROCESS )
Awareness : The consumer becomes aware of the innovation but lacks information about it.
Interest : The consumer is stimulated to seek information about the innovation.
Evaluation : The consumer considers whether to try the innovation.
Trial : The consumer tries the innovation to improve his or her estimate of its value.
Adoption : The consumer decides to make full and regular use of the innovation.