chapter 6.ppt
DESCRIPTION
CHAPTER 6TRANSCRIPT
-
5/21/2018 CHAPTER 6.ppt
1/30
1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control
Strategic Marketing
-
5/21/2018 CHAPTER 6.ppt
2/30
CHAPTER 6A. Market Targeting and Strategic Positioning
Market Targeting StrategyTargeting in Different Market Environments
Positioning Strategy
Developing the Positioning StrategyDetermining Positioning Effectiveness
McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
-
5/21/2018 CHAPTER 6.ppt
3/30
6-3
A. MARKET TARGETING STRATEGY
The Marketing Targeting Decision Identities the People or
Organizations in a Product-Market Toward Which a Firm DirectsIts Positioning Strategy Guided by an understanding of:
The product-market
Its buyersFirms capabilities resourcesCompetition
-Targeting and positioning strategies consists of:1.Identifying and analyzing the segments in a product-market,2.Deciding which segments to target,3.Desiging and implementing a positioning strategy foe eachtarget.
-
5/21/2018 CHAPTER 6.ppt
4/30
6-4
1.Targeting Alternatives
-The targeting decision determines which customer group the
organization will serve. A specific marketing effort(positioning strategy)
is directed toward each target that management decides to serve.-Market targeting approaches fall into major categories:
i. Segment targeting when segments are clearly defined,
ii. Targeting based on product differentiating. As shown by exhibit
6.1,segment targeting ranges from a single segment to targeting all or
most of the segments in the market.
-Factors influencing targeting decisions- several factors may influence
the choice of the targeting strategy:
i. Stage of product-market maturity.
ii. Extent of diversity in buyer value requirements.iii. Industry structure.
iv. The firms capabilities and resources.
v. Opportunities for gaining competitive advantage.
-
5/21/2018 CHAPTER 6.ppt
5/30
6-5
B. Targeting In Different Market Environments
-Four lifecycle stages illustrate the range of product market structures:
1.Emerging-product market which are newly formed are categorized asemerging, and are created by factors such as a new technology, the
changing needs of buyers, and the identification of unmet needs by
suppliers.
-There are two type of emerging markets:i. A totally new product market- the emerging market is formed by
people/organizations whose needs and wants have not been satisfied
by available product.
ii. A new product technology entering an existing product market-
the market entry provides an alternative value proposition to buyers
in an existing market.
-
5/21/2018 CHAPTER 6.ppt
6/30
6-6
-consideration for emerging markets:i. Buyer Diversity
Segmentation limited due to similarity of buyers preferencesii. Industry Structure
Typically small new organizationsLimited access to resources
iii. Capabilities and Resources
Unique benefit (differentiation) strategy rather than low-costFirst-mover advantage
iv. Targeting StrategySingle target or a few broad segments
-
5/21/2018 CHAPTER 6.ppt
7/306-7
2. Growing-these product-markets are experiencing rapid growth.-Identifying customer groups with similar value requirements improves
targeting, and experience with the product, process, and materialstechnologies leads to greater efficiency and increased
standardization.-analysis of the characteristics and preferences of existing buyers yields useful
guidelines for estimating market potential.i. Product-Market structure-high growth markets are very attractive, and
that early entry offers important competitive advantage.ii. Capabilities and Resources-The firms competing in growth markets are
likely to follow one of these strategies:a. Pursuit of a market leadership strategy,b. Follow very selective targeting and positioning strategies.
iii. Targeting Strategy
Three possible strategies1. Extensive market coverage by firms with established businesses inrelated markets
2. Selective targeting by firms with diversified product portfolios3. Very focused targeting strategies by small organizations serving
one or a few market segments.
-
5/21/2018 CHAPTER 6.ppt
8/306-8
3. Mature- the product markets are shifting from growth to maturity, as
indicated by the product lifecycle of the products.a. Buyer Diversity
Segmentation essential for competitive advantageb. Product market/Industry Structure
Intense competition for market share,Emphasis on cost and service, and increases in the role andimportance of value chain strategies.
c. Capabilities and ResourcesManagements objectives: cost reduction, selective targeting,
product differentiationd. Targeting Strategy
Deciding which segment to serve
Firms pursuing extensive targeting strategies may decide to exitfrom certain segments
-
5/21/2018 CHAPTER 6.ppt
9/306-9
4. Growth MarketThere are two options of consideration-a. Global Reach and Standardization
Identify market segments that span global markets and serve these needs
with global positioning strategiesb. Local Adaptation
Consider requirements of domestic buyersBuyers needs and preferences affected by social, political, cultural,economic, and language differences
Targeting StrategyTargeting a single country, regional (multinational) targeting, or globaltargeting
-
5/21/2018 CHAPTER 6.ppt
10/306-10
Market Targeting and Strategic Positioning
* Core dimensions of market-driven
strategy: deciding which buyers to
target and how to position the firmsproducts
* Effective targeting and positioningstrategies are essential in gaining and
sustaining superior performance
-
5/21/2018 CHAPTER 6.ppt
11/306-11
Exhibit 6.1Market Targeting Alternatives
SelectiveTargeting
ExtensiveTargeting
Segments Clearly Defined
Differentiated But SegmentsNot Clearly Defined
Target
SelectedNiche(s)
Target
MultipleSegmentsProduct
Variety
Product
Specialization
-
5/21/2018 CHAPTER 6.ppt
12/306-12
C. Positioning strategy
Deciding the desired perception/ association of an
organization/ brand by market target buyersand designing
the marketing program to meet (and exceed) buyers value
requirements.
-
5/21/2018 CHAPTER 6.ppt
13/306-13
MARKETTARGET
POSITIONINGEFFECTIVENESS
POSITIONINGSTRATEGY
How wellmanagements
positioning objectives
are achieved for the
market target
POSITIONING CONCEPT
The desired positioning of the
product (brand) by targeted buyers
The combination ofmarketing actions
used to communicate
the positioning concept
to targeted buyers
STRATEGIC POSITIONING INITIATIVES
-
5/21/2018 CHAPTER 6.ppt
14/306-14
-The positioning concept indicates managements desiredpositioning of the product (brand) in the eyes and minds of thetarget buyers.
-It is intended to deliver the value requirements appropriate foreach market target pursued by the organization.-The positioning strategy is the combination of marketingprogram(mix) strategies used to portray the positioning desired by
management to the target buyers.-this strategy includes the product, supporting services,distribution channels, price, promotion.Positioning effectiveness considers how well managementspositioning objectives are being achieve in the market target.
As shown in exhibit 6.4 the positioning objective is to have eachtarget customer perceive the brand distinctively from othercompeting brands and favorably compared to the other brands.
-
5/21/2018 CHAPTER 6.ppt
15/306-15
How Positioning Works
* Objective
* Match the organizations distinctive capabilities with
the customer value requirements for the market target
(How do we want to be perceived by targetedbuyers?)
* Desired result
* Gain a relevant, distinct, and enduring position by the
targeted buyers that they consider important.* Actions by the organization
* Design and implement the positioning strategy
(marketing program) for the market target.
-
5/21/2018 CHAPTER 6.ppt
16/306-16
1. Selecting the positioning concepta. The positioning concept indicates how management wants
buyers to perceived the companys brand.
-The positioning can be central to customers perception andchoice decisions.
-The positioning concept should be linked to buyers valuerequirements.
-The focus of the concept may bei. A functional concept applies to product that solve
consumption-related problems for extremely generatedconsumption needs. examples of brands using this basis ofpositioning include Crest toothpaste (cavity prevention).
ii. Symbolic positioning relates to the buyers internallygenerated need for self-enhancement, role positioning, groupmembership, or ego identification. examples of symbolicpositioning are Rolax watches.
iii. The experiential concept is used to position products that
-
5/21/2018 CHAPTER 6.ppt
17/306-17
SELECTING THEPOSITIONING
CONCEPT
Symbolic Functional
Experiential
The Perception or Association that Management Wants Buyers toHave Concerningthe Brand
-
5/21/2018 CHAPTER 6.ppt
18/306-18
-Three aspects of positioning concept selection are important:i. The positioning concept applies to a specific brand rather than
all of the competing brands in a product classification such as
toothpaste.ii. The concept is used to guide positioning(marketing program)
decisions over the life of the brand ,recognizing the brandspecific position may change over time.
iii. If two or more positioning concepts, for example, functionaland experimental, are used to guide positioning strategy, themultiple concepts are likely to confuse buyers and perhapsweaken the effectiveness of positioning actions.
-
5/21/2018 CHAPTER 6.ppt
19/306-19
b. The positioning decision-It is useful to study the positioning of competing brands usingattributes that are important to existing and potential buyers of
the competitors brands.-Marketing research may be necessary in identifying customersideal positioning.
-
5/21/2018 CHAPTER 6.ppt
20/306-20
C.DEVELOPING THE POSITIONING STRATEGY
The Positioning Strategy Places the
Marketing Program (mix)Components into a Coordinated
Set of Actions Designed toDeliver Superior Customer
Value
PRODUCT
PROMOTION
PRICE
VALUE CHAIN
-
5/21/2018 CHAPTER 6.ppt
21/306-21
i. The positioning concept applies to a specific brand
rather than all the competing brands that
compose a product classification
ii. The concept is used to guide positioning decisions
over the life of the brand
iii. Multiple concepts are likely to confuse buyers andmay weaken the effectiveness of positioning
actions.
iv. Whether the strategy is brand specific or greater
in scope depends on such factors as the size of
the product-market, characteristics of he goods or
service, the number of product involved, and the
product interrelationship in the consumer use
1.Scope of Positioning Strategy
-
5/21/2018 CHAPTER 6.ppt
22/306-22
2. Marketing program Decisions
Nokias positioning strategy includes aggressive innovation initiatives, a
very effective global value chain network, competitive pricing, and
effective promotion strategies matched to its major global markets inAsia, Europe, middle east, Africa and the America.
i. The product strategy, indicating how the product(s) will be
positioned against the competition in the product-market.ii. The value chain (distribution) strategy to be used.
iii. The pricing strategy, including the role and positioning ofprice relative to competition.iv. Promotion strategy:
-The advertising and sales promotion strategy and theobjectives these promotion components are expected to achieve.-The sales force strategy, direct marketing strategy, and theInternet strategy, indicating how they are used in the positioningstrategy.
-
5/21/2018 CHAPTER 6.ppt
23/306-23
D. Determining positioning effectiveness
-The marketing offer (product, distribution, price, and promotion) is both
distinct and valued in the minds of the customers in the market target.
-Positioning evaluation should include customer analysis,competitor
analysis,and internal analysis.
-managements objective is to gain a distinct positioned in the market of
interest.
-several methods and metrics are available for analyzing positioning
alternatives and determining positioning effectiveness.
-These include customer and competitor research, market testing of
proposed strategy, and the use of analytical techniques(exhibit 6.6).
-
5/21/2018 CHAPTER 6.ppt
24/30
6-24
Methods for
DeterminingPositioning
Effectiveness
Analytical
Positioning
Models
Test Marketing
Customer and Competitor Research
Exhibit 6.6 determining positioning effectiveness
-
5/21/2018 CHAPTER 6.ppt
25/30
6-25
1. Customer and Competitor Research
* Research Studies
* Preference Maps
2. Test Marketing
* Generates information about commercial feasibility and
marketing program
* Provides market (sales forecasts) and effectivenessmeasures
3. Positioning Models
* Incorporates research data into formal models of decision
analysis-determining positioning effectiveness: Information is needed
as to whether the strategy yields the results which are
expected concerning sales, market share, profit
contribution, growth rates, customer satisfaction, and other
competitive advantages.
-
5/21/2018 CHAPTER 6.ppt
26/30
6-26
Positioning Errors
* Under-positioningcustomers have onlyvague ideas about the company and donot perceive anything distinctive about it
* Over-positioning
Customers have toonarrow an understanding of the company,product, or brand
* Confused positioningFrequent changesand contradictory messages confuse
customers* Doubtful positioningclaims made for the
product or brand are not regarded ascredible
-
5/21/2018 CHAPTER 6.ppt
27/30
6-27
Positioning in Perspective
* Positioning is a central part of business strategy
* Positioning analysis starts with an understanding of thevalue proposition for the target segment
* Value-driven positioning is the objective
* Positioning seeks to differentiate the organizations offerfrom the competition
* Positioning seeks to create a unique perception inbuyers minds of the target market segment
* Positioning is the unifying dimension of market-drivenstrategy
-
5/21/2018 CHAPTER 6.ppt
28/30
6-28
Positioning usually means that an overt decision
is being made to concentrate only on certain
segments. Such an approach requires
commitment and discipline because its not easyto turn your back on potential buyers. Yet, the
effect of generating a distinct, meaningful
position is to focus on the target segments and
not to be constrained by the reaction of othersegments.
Source: Aaker and Shansby, Business Horizons, May-June 1982, 61.
-
5/21/2018 CHAPTER 6.ppt
29/30
6-29
Illustrative Impacts of Changes in Business Strategy on Targeting andPositioning Strategies
Changes in BusinessStrategy
Market Targeting Impact Positioning Impact
Rapid Growth/Retrenchment
Market scope may not changealthough targets may be increasedor reduced.
Substantial changes in resourceallocation, (e.g. advertisingexpenditures
Changing the Product Mix No change is necessary unlessincrease in product scope creates
opportunities in new segments.
Changes in product strategy, methods ofdistribution, and promotional strategies
may be necessary.
Changing the MarketScope
Targeting is likely to change to includenew targets.
Positioning strategy must be developedfor each new target.
Repositioning Should not have a major effect ontargeting strategy.
Product, distribution, price, andpromotion strategies may be affected.
Value Chain Integration Should have no effect on targetingstrategy.
Primary impact on channel, pricing andpromotion strategies.
Diversification Targeting strategies must be selected innew business areas.
Positioning strategies must be developed(or acquired for the new business areas.
Strategic Alliance Targeting strategy may be affectedbased on the nature and scope of the
alliance.
Operating relationships and assignmentor responsibilities must be established.
-
5/21/2018 CHAPTER 6.ppt
30/30
Product Strategy
PromotionStrategy
Price Strategy
DistributionStrategyMarket Target
Positioning Strategy
Targeting and Positioning