Unit I

Marketing Strategy and the Marketing Mix

Prof. Arun Mishra arunjimishra@gmail.com 9893686820

Marketing Strategy
Customer-Driven Marketing Strategy

Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts

Requirements for Effective Segmentation

Measurable Measurable Accessible Accessible Substantial Substantial Differential Differential Actionable Actionable
Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served.

Segments are large or profitable enough to serve.

Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments.

Steps in Segmentation, Targeting & Positioning

6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Selection Criteria 2. Develop Profiles of Resulting Segments 1. Identify Bases for Segmenting the Market

Market Positioning

Market Targeting

Market Segmentation

Market Segmentation
Levels of Market Segmentation
Same Sameproduct productto toall allconsumers consumers (no (nosegmentation) segmentation) Different Differentproducts productsto toone oneor ormore moresegments segments (some (somesegmentation) segmentation) Different Differentproducts productsto tosubgroups subgroupswithin withinsegments segments (more (moresegmentation) segmentation) Products Productsto tosuit suitthe thetastes tastesof ofindividuals individualsand andlocations locations (complete (completesegmentation) segmentation)

Mass Mass Marketing Marketing

Segment Segment Marketing Marketing Niche Niche Marketing Marketing Micromarketing Micromarketing

Local Marketing
Tailoring brands/ promotions to local customer groups

Individual Marketing
Tailoring products/ programs to individual customers

Market Segmentation
Bases for Segmenting Consumer Markets
Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioural
Occasions, benefits sought, user status, usage rate, loyalty

Market Segmentation
Bases for Segmenting Business Markets

Personal Characteristics

Demographics

Situational Factors

Bases Bases for for Segmenting Segmenting Business Business Markets Markets

Operating Characteristics

Purchasing Approaches

Segmenting Business Markets

Segmentation by customer size or geographic location Four segments of business customers
Programmed buyers Relationship buyers Transaction buyers Bargain hunters

Marketing Strategy
Customer-Centered Marketing Strategy

Market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer

Market Targeting
Evaluating Market Segments (developing selection criteria)

Segment Size and Growth

Analyze sales, growth rates and expected profitability for various segments.

Segment Structural Attractiveness

Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.

Company Objectives and Resources

Company skills & resources relative to the segment(s). Look for Competitive Advantages.

Market Targeting
Market Coverage Strategies
Company Company Marketing Marketing Mix Mix
A. Undifferentiated Marketing

Market Market

Company Company Marketing MarketingMix Mix1 1 Company Company Marketing MarketingMix Mix2 2 Company Company Marketing MarketingMix Mix3 3
B. Differentiated Marketing

Segment Segment1 1 Segment Segment2 2 Segment Segment3 3

Company Company Marketing Marketing Mix Mix

C. Concentrated Marketing

Segment Segment1 1 Segment Segment2 2 Segment Segment3 3

Positioning for Competitive Advantage

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 for Competitive Advantage: Strategies

Product Product Class Class Product Product Attributes Attributes Benefits Benefits Offered Offered
C C A A

Away Awayfrom from Competitors Competitors

H H

G G

Against Againsta a Competitor Competitor

E E

D D B B F F

Usage Usage Occasions Occasions

User UserClass Class

Steps to Choosing and Implementing a

Positioning Strategy
Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation. Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP). Step 3. Communicating and Delivering the Chosen Position. Step 4. Support the positioning strategy with a unique marketing mix

Developing Competitive Differentiation

Product Product Service Service

Areas Areas for for Competitive Competitive Differentiation Differentiation

Image Image

People People

Selecting the Right Competitive Advantages

Important Important Profitable Profitable Criteria Criteria for for Determining Determining Which Which Differences Differences to to Promote Promote Distinctive Distinctive

Affordable Affordable

Superior Superior

Pre-emptive Pre-emptive

Communicable Communicable

Marketing Mix
The term 'marketing mix' was first used in 1953 by Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 Ps classification in 1960, which has seen wide use. Marketing mix is the set of controllable tactical marketing toolsproduct, price, place, and promotionthat the firm blends to produce the response it wants in the target market

Marketing Mix
Developing an Integrated Marketing Mix

Managing the Marketing Effort

Managing the Marketing Effort

Marketing Analysis SWOT Analysis

Managing the Marketing Effort

Market PlanningParts of a Marketing Plan

Managing the Marketing Effort

Marketing Implementation

Implementing is the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives Successful implementation depends on how well the company blends its people, organizational structure, decision and reward system, and company culture into a cohesive action plan that supports its strategies

Managing the Marketing Effort

Marketing Department Organization

Managing the Marketing Effort

Marketing Control

Controlling is the measurement and evaluation of results and the taking of corrective action as needed Operating control Strategic control

Measuring and Managing Return on Marketing Investment

Return on Marketing Investment (Marketing ROI) Return on marketing investment (Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities.

Marketing Strategy and the Marketing Mix