Because markets are rarely homogeneous in benefits wanted , purchase rate , price and promotion strategies. Their response rate to products and marketing program differ. Population growth has slowed and more product markets are maturing. Expanding disposable income , higher education levels and more awareness has created customers with more varied and sophisticated needs , tastes and lifestyle. Increasing trend towards microsegmentation.
Descriptors
Behavioral Geodemographic Demographic
Select market attractiveness and competitive-position factors. Weight each factor Rate segments on each factor Project future position for each segment Choose target segment to allocate resources.
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Simple physically based attributes like quality power or size. Complex physically based attributes like speed of comp. , roominess of car or product or service being user friendly. Essentially abstract attributes like sexiness of perfume , quality of french wine , prestige of car. price
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Identify relevant set of competitive products serving the target market. Identify the set of determinant attributes Collect information from sample Determine products current location Determine customer preference Examine market positioning Write positioning statement
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Pioneer-advantages
Economies of scale and experience High switching cost for early adopters Distribution advantage Pioneer defines the rules of the game Possibility of positive network effects Influence on consumer choice criteria and attitudes
Follower-advantages
Ability to take advantage of pioneers positioning mistakes Product mistakes Marketing mistakes Latest technology Of pioneers limited resources
Appropriate when the product category is likely to experience positive network effects.
Niche penetration
Most appropriate when the new market is expected to grow quickly and there are number of diff benefit segments to appeal to.
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Gaining share is easier Share gains are worth more Price competition is likely to be less intense Early entry is necessary to maintain growth expertise
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Primary marketing objective of all competitors in mature market is to hold their existing customers
Methods of differentiation
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Dimensions of product quality Performance Durability Features Reliability Brand name Dimensions of service quality Tangibles Reliability Responsiveness Assurance Empathy
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No-frills product Innovative product design Cheaper raw material Innovative product process Low cost distribution Reduction in overheads
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Increased penetration strategy Extended use strategy Market expansion strategy Global market expansion-sequential strategies
harvesting strategy
Maximize short term cash flow maintain or increase margins even at expense of market share decline
Maintenance strategy
Maintain market share for the short term Even at the expense of margins
Niche strategy
Strengthen share position in one of few segments with potential for continued profit.
Components of Strategy
Scope Goals and objectives Resource deployments Identification of sustainable competitive advantage Synergy
close to customers and ahead of competition Love the customer more than the product Our legitimacy is based on customer satisfaction Do business the way the customer wants to do it Our mission is to find needs and fill them, not to make products and sell them If were not customer-driven, our products wont be either
Unique business mission Definable set of competitors Integrative planning done independently Responsible for resource management in all areas Large enough but not so large as to become bureaucratic
Corporate Objectives
Components of an objective:
A performance dimension A measure or index for evaluating progress A target or hurdle level to be achieved A time frame within which the target is to be accomplished
Overall scope and mission of the organization Company goals and objectives Source of competitive advantage Development strategy for future growth Allocation of corporate resources across firms various businesses Sources of synergy
Bottom Up
2. Add individual estimates to get total forecast 1. Estimate demand in market segments or from organizational units in the company
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