CHAPTER 6 MARKETING STRATEGY

Market Segmentation
Ways of
market
segmentation Market segmentation –
• Product type the study of which industry
• Price that the company intend to
• Customer
served
compete & determine the
different potential target
market within the industry
SELECTING AND ESTABLISHING A MARKET
POSITION

Market segmentation Market targeting Market positioning

• A process of grouping
customer which similar
enough that the same
product or service will appeal
all of them
• Determining which market • Establishing the company’s
segments will become the position in the minds of
company’s specific target customers which will
differentiate its product or
service from competitors
The market can be segmented
in a number of ways

Multiple
Geographic Demographic Psychographic Behavioral Geodemographic
Segmentation
segmentation segmentation segmentation segmentation segmentation
bases
 Market Segmentation_Cont’

Geographic Demographic Psychographic Behavioral

segmentation segmentation
• segmentation divides the • divides the market into
market into different groups based on variables
geographical units such as such as age, gender, family
nations, regions, states, size, family life cycle,
counties, or cities income, occupation,
education, religion, race,
generation, and nationality
segmentation segmentation
• divides buyers into different • divides buyers into groups
groups based on social class, based on their knowledge,
lifestyle, or personality traits attitudes, uses, or responses
to a product
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
 Market Segmentation_cont’

Geodemographic
Multiple Segmentation segmentation is an
Bases is used to identify example of multivariable
smaller, better-defined segmentation that divides
target groups groups into consumer
lifestyle patterns
 Differentiation and Positioning

Product position is the way the product is defined by consumers on important

attributes—the place the product occupies in consumers’ minds relative to
competing products
• Perceptions
• Impressions
• Feelings
 Marketing mix

Marketing Mix Product Price

is the set of tools

(four Ps) the firm The
marketing
uses to mix

implement its
marketing Promotion Place
strategy
 Marketing mix_Cont’
• Marketers identify a
consumers need and the
provide the product or
service to fill that need.
• Product strategy:
• What goods or service to
offer
• Package design
• Brand names
Product • Trademarks
• Warranties
• Product life cycle
• Positioning
• New product development
 Marketing mix_Cont’
• Make sure that price is
competitive with that of
similar products or, if
higher, that the consumers
perceive they’re getting
more value for their money
• Price strategy – deals with
the methods of setting
Price profitable and justifiable
prices.
• Methods to set the price:
• Cost-based price
• Value-based price
 Marketing mix_Cont’

• Encompasses the various ways

marketers get the word out
about a product.
• Promotional strategy –
blending together the various
elements of promotion to
communicate most
effectively with the target
market
Promotion • Activities used by business to
promote their product:
• Advertising
• Public relation
• Other promotion related e.g:
viral marketing
 PROMOTION ACTIVITIES

Advertising
any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. It will making people aware of a product in
hopes of persuading them to purchase it.

Public Relation
building the good relationship with the company’s various stakeholder by getting favorable publicity, developing a good corporate image, and managing
unfavorable image, rumors, and events. It is the one of the most cost-saving modes to increase the awareness of the product a company sell.

Other promotion-related activities

activities that help a company promote and sell its product such as free samples, free trails, event sponsorships and viral marketing.
 Goals of Advertising

To communicate
To create a
To increase and disseminate
relationship
customer a product’s
between a
awareness of the comparative
product and a
product. features and
certain lifestyle.
benefits.
 Marketing mix_Cont’
• Where the product is
placed geographically
• Distribution strategy –
planning that ensures
that consumers find
their products in the
proper quantities in the
right times and places.
Place/distribution • Decision for
product/service
distribution:
• Selling direct
• Selling through
intermediaries
Selling direct vs selling through intermediaries
 Selling direct vs selling through
intermediaries_Cont’
Direct selling:
• Selling products directly to the end
users
• Advantages: company can control and
monitor the movement of their product
from their place to the end user without
relying on the third parties.
• Disadvantage of selling direct to the
end users is that the firm’s working
capital will be tied up in fixed assets
because it must own or rent retail
outlets or must form a sales force to sell
its products.
Selling through intermediaries:
• The firms sell its product to
intermediaries (wholesaler) who will
then place the product in the product in
retail outlets to be sold.
• Advantage: company does not have to
own much of its distribution channel.
• Disadvantage of this approach is that a
company loses some control of its
product in that there is no guarantee
that the retailers it sells through will
talk up and push its products as much
as the manufacturer would if it had its
own stores.