Scanning the Marketing

Environment
prashant@iimcal.ac.in
 Objectives
• Tracking & Identifying Opportunities in the
Macroenvironment
• Demographic, Economic, Natural,
Technological, Political, & Cultural
Developments
 Macroenvironmental Influences on
the Marketing Mix

Physical Science
environ. &
Tech.

Economic
Socio- Marketing
&
cultural Mix Competition

Political
Demo-
&
graphic
Legal
 Macroenvironment:
Physical Environment

• Ecological systems • Geography

• Natural resources • Pollution levels
• Climate – Water & Air
 Demographic Environment

Worldwide Population Growth

Population Age Mix

Ethnic Markets

Educational Groups

Household Patterns

Geographical Shifts in Population

Shift from Mass Market to Micro markets

 Economic Environment

Income Distribution
Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies

Savings, Debt, &

Credit Availability
 Changing Role
of Government

Higher Pollution Natural Shortage of

Levels Environment Raw Materials

Increased Costs
of Energy
Accelerating Pace Unlimited Opportunities
of Change for Innovation

Issues in the Technological

Environment

Varying Increased
R & D Budgets Regulation
 Increased
Legislation

Political-
Legal
Environment

Special-
Interest
Groups
Social/Cultural Environment

Of Of Of
the Universe Oneself Others
Views
That Express
Values

Of Of Of
Nature Society Organizations
Social/Cultural Environment
 s
THE FOUR C

Company
 The Four Cs: Company

• Total organization
• Interactive
• Flexibility
• Entrepreneurial approach
• Intrapreneurial approach
 The Four Cs: Customers -
Economic Utility
• Form Utility
• Place Utility
• Time Utility
• Possession Utility
The Four C : Competitors
s

• Levels
– Product class
– Product category
– Brands
• Type
– Price
– Form
– Time
– Location
 Four Types of Competition

Price-based

Location-based Quality-based

Time-based
 The Four C :Collaborators
s

• Alliances
• Networks
• Informal partnerships
• Suppliers
• Virtual corporations
Segmentation, Target and
Positioning

prashant@iimcal.ac.in
 The Substance of Marketing

Want To Enter the Watch Business!!!

You Must Make A Set Of Important

(Marketing Related) Decisions!!!

WHAT ARE THESE DECISIONS???

The Probable Decisions are…!!!

To which consumer should I sell my

watches?
How should I define the consumer I hope to
serve?
Should I think in terms of geography,
perhaps the country in which my consumer
lives?
Or may be the consumer’s income or sex
or fashion orientation is more important?
The Probable Decisions are…!!!

What Product or Products should I offer?

For example should I offer digital or
analog, ornate or simple, multifunction or
single function?
How much should I charge for each watch?
Should I offer discounts to people who pay
cash or who buy in large amounts?
The Probable Decisions are…!!!
Should I sell direct to consumers or through
stores, and if through stores, what type of
stores?
Do I want to offer my product in several
types of outlet or only in one type?
How do I select and service the particular
outlets I Chose?
Finally, How do I convince the store to carry
my brand?
The Probable Decisions are…!!!

How should I communicate to the

consumers to whom I wish to sell?
Do I use advertising, and if so in what
media?
How do I reach the stores? Do I use sales
people?
Should the salespeople visit the stores or
should they just telephone them?
Views on the Marketing Processes

5-C Analysis
Customer S-T-P Marketing 4 P’s Marketing Plan
Competitor Segmentation Product
Company Targeting Pricing
Collaborators Positioning Promotion
Context Place

The Functional View

Views on the Marketing Processes

Understanding Capturing Delivering Sustaining

Creating
Customer Customer Customer Customer
Customer
Value Value Value Value
Value

The Process View

Understanding Customer Value

Psychological

Functional Economic
 Steps in Market Segmentation,
Targeting,and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Why Segmentation ?
• Not all buyers alike
• Subgroups may be identified
• Subgroups smaller and more
homogeneous
• Easier to satisfy smaller groups
 How to Segment & Target?

1. 2. 3.
Break Group Choos
marke into e
t segment target
down s marke
t

TARGET MARKET
 Basic Market-Preference
Patterns
(a) Homogeneous (b) Diffused (c) Clustered
preferences preferences preferences
Economy

Economy

Economy
Quality Quality Quality
 Bases for Segmenting
Consumer Markets
Demographic
Sociographic
Lifestyle
Geographic
Behavior
Consumption
Predispositions
 Bases for Segmenting
Business Markets

Geography
Organizational charateristics
Purchase behavior
Usage patterns
Organizational
predispositions
 Step 1. Market Segmentation
Requirements for Effective Segmentation

• Size, purchasing power,

Measurable
profiles
of segments can be
measured.
Accessible • Segments can be effectively
reached and served.

Substantial • Segments are large or

profitable enough to serve.
• Segments must respond
Differential differently to different
marketing mix elements &
programs.
• Effective programs can be
Actionable designed to attract and serve
the segments.
Step 2. Market Targeting
Market Coverage Strategies
Company
Marketing Market
Mix
A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3
C. Concentrated Marketing
 Step 2. Market Targeting
Choosing a Market-Coverage
Strategy
Company Resources

Product Variability

Product’s Stage in the Life Cycle

Market Variability

Competitor’s Marketing Strategies

 Step 3. Choosing a Positioning
Strategy
• Product’s 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
• The way consumers perceive the brand
relative to its competition
– ID competitive advantage
– Stress salient characteristics
– Differentiate
Identifying Possible Competitive
Advantages
Product Services
Differentiation Differentiation
i.e. Features, i.e. Delivery,
Performance, Style & Installation,
Design, or Attributes Repair Services,
Customer
Training Services
Image Personnel
Differentiation Differentiation
i.e. Symbols, i.e. Hiring, Training
Atmospheres, Better People Than
Events Competitors Do
 Five Patterns of Target Market
Selection
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Segment Cross-Classification:
Aerobic Shoes
Gender M

Japan
Geography

Western
Europe

U.S.

14 - 21 22 - 29
Age
 Positioning: Tea - Late 1990s
Traditional flavor
● Tetley Rounds ● Tetley

● Lipton Rounds ● Lipton

Iced Hot
● Lipton Natural Teas
● Nestea

● Lipton Flavored
Unique flavor