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1. Formulating Strategy to Fill Identified Needs 2. Segmentation and Positioning. MARK 430 WEEK 4. What we will cover this week. Now we have all that information about customer behaviour and customer needs.... what are we going to do with it?

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1 formulating strategy to fill identified needs 2 segmentation and positioning

1. Formulating Strategy to Fill Identified Needs2. Segmentation and Positioning

MARK 430 WEEK 4

what we will cover this week
What we will cover this week...
  • Now we have all that information about customer behaviour and customer needs....

what are we going to do with it?

  • Formulate a strategy to fill the needs that we have identified
  • Determine which customers to target, and how to position our product/service vis a vis the competition
main strategy tool swot analysis
Main strategy tool: SWOT analysis
  • Goal is to pursue opportunities that use your company’s strengths, while avoiding threats and overcoming weaknesses (Urban p 45)
strategy formulation
Strategy formulation
  • Identify and rank strengths and weaknesses in your company / organization
  • Technique:
    • list key marketing success factors eg.
      • high product quality
      • customer loyalty
      • patent protection
    • rank your position relative to that of your competition against these factors
      • much worse, worse, equal, better, much better
  • Objective is to recognize, then build on your strengths and overcome your weaknesses
slide5
Opportunities eg.

technological change

low entry costs

market growth

unmet customer need

weak competition

customer power.....

Threats eg.

technological change

regulatory changes

price war

new competition

social change

customer power.....

Strategy formulationIdentify and rate opportunities and threats in the external marketing environment
customer power both threat and opportunity
Customer power: both threat and opportunity
  • More information, more options, simpler transactions
    • More knowledge, more sophistication
  • Threat to traditional marketing tactics - push based, one-way
    • marketers must “make” customers buy
  • Opportunity to attract the “new” customer
    • trust-based marketing
    • build mutually beneficial relationship
which strategic approach to follow
Which strategic approach to follow?
  • Which one to use:
    • what kind of customers do you have?
    • what kind of product/service are you providing?
  • Push-based strategy
    • commodities
    • price sensitive
    • deal seekers
  • Pull (trust-based) strategy
    • expensive / complex product
    • information seeking customers
    • customers that value long-term relationship
  • The web is fundamentally a pull medium rather than a push medium
    • Agree?
trust based marketing
Trust based marketing
  • The web is really good an enabling trust building (a paradox?)
  • HPs Online Advisor
  • Acts as an online advisor, that helps people acquire products and services for their home.
    • How does HP benefit?
benefits of trust based marketing
Benefits of trust-based marketing
  • Fits the nature of the web medium
    • Ebay - ratings of buyers and sellers without interference from EBay
    • Amazon - customer ratings of products (does Amazon censor?)
    • Collaborative filtering
    • Reviews, customer ratings sites, blogs
  • Less churn (cheaper to keep a customer than acquire a new one)
  • Cheaper to serve.
what we will cover this week10
What we will cover this week...
  • Now we have all that information about customer behaviour and customer needs....

what are we going to do with it?

  • Formulate a strategy to fill the needs that we have identified
  • Determine which customers to target, and how to position our product/service vis a vis the competition
which customers will you serve segmentation and targeting
Which customers will you serve? Segmentation and Targeting
  • Marketing segmentation
    • the process of aggregating individuals or businesses with similar characteristics
      • that relate to the use, consumption, or benefits of a product or service.
  • Targeting
    • the process of selecting the market segments that are most attractive to the firm
why segment
Why segment?
  • Customers prefer “custom” products
  • The market of one?
  • Cost
  • How many segments should we deliver?
  • What characteristics do we use to group people into market segments
  • How do we know we are reaching those segments?
traditional marketing complaint
Traditional marketing complaint
  • I know I am wasting 50% of my advertising budget, but I don’t know which 50%
  • Did the right segment see the ad?
  • Internet technologies can answer that question much more effectively than traditional advertising media
the internet advantage
The Internet advantage
  • The Internet is the marketer’s dream
  • Ad server companies (eg. DoubleClick) compile and serve much narrower consumer segments than mass media
  • Cost to deliver an ad is much smaller
  • User registration info and cookies provide specific user data
    • including what they did after they saw the ad
      • immediately
      • later
slide16
VALS
  • An example of a Marketing strategy tool (VALS stands for values and lifestyle, but now focuses on personality)
  • segments the market on the basis of personality traits
    • traits assumed to drive consumer behaviour
    • uses a survey instrument
  • The VALS personality types
    • Primary and secondary types
after segmentation positioning
After Segmentation > Positioning
  • Product positioning takes place within a target market segment
  • Position is based on consumer perception
  • What we need to know:
    • What product dimensions/attributes do consumers use to evaluate?
    • How important are these when decisions are made?
    • How do we and our competitors sit relative to these dimensions
  • One tool we can use is a Perceptual Map
perceptual map automobiles
Perceptual Map: Automobiles

Classy

Distinctive

Conservative

Sporty

Practical

Affordable

2 uses for a perceptual map
Mercedes

Honda

Ford

Nissan

Porsche

BMW

Chrysler

VW

Hyundai

Toyota

Cadillac

Dodge

Jeep

Saturn

Kia

Lexus

2 uses for a perceptual map

Identify areas without competitors

Display consumer’s ideal points

  • These points reflect ideal combinations of the two dimensions as seen by a consumer.
  • Use them to identify potential market segments
slide20
The Internet’s big promise is individualized targeting -

giving individual consumers exactly what they want at the right time and place.