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Elements of Marketing Strategy

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Title: Elements of Marketing Strategy


1
Elements of Marketing Strategy
  • David Forlani
  • University of Colorado at Denver and Health
    Sciences Center

2
Presentation Overview
  • Marketing Strategys
  • Place in the Organization
  • Elements Defined and Illustrated
  • Defining Markets,
  • Segmenting Markets,
  • Targeting Market Segments and
  • Positioning within Targeted Segments

3
Decision Level
  • What industries to compete in is a
    corporate-level strategic decision.
  • What product-markets to compete in is a
    business-unit-level strategic decision.
  • What marketing program to implement in a given
    product-market is a marketing-level strategic
    decision.

4
Marketing Programs
  • Marketing Strategy is the Unifying Part of a
    Marketing Program. It determines the target
    market and positioning objectives.
  • The Marketing Mix is the Action of the Marketing
    Program. It implements the strategy through its
    elements, the 4 Ps (Product, Price, Place and
    Promotion).

5
Establishing BoundariesDefining Product-Markets
  • Broadest The market is the industry.
  • Narrowest The market is one user.
  • Useful Set of current and potential users of the
    need/want satisfaction you plan to offer.

6
P-M Evolution Full-Size Fade
7
Market Segmentation Defined
  • Market segments are distinct subsets of people
    with similar needs, circumstances and
    characteristics that lead them to respond in a
    similar way to a particular product or service
    offering, or to a particular strategic marketing
    program (text, p 17).

8
Segmentation Criteria
  • SizeIs the segment big enough to be profitable?
  • StabilityIs there enough time to enter and make
    a profit?
  • AccessibilityCan we communicate with the people
    in this segment as it is defined?
  • Differential ResponseHow do we need to change
    the marketing mix to participate in each segment?

9
SegmentationFinding Differential Response
  • Identify actionable characteristics such that
  • Groups of users within a level of that
    characteristic respond similarly to a given
    marketing program, AND
  • Groups of users at other levels of the
    characteristic respond differently.

10
Typical Segmentation Variables
  • Demographics External characteristics of a
    population, e.g., age, gender, income
  • Psychographics Internal indicators of a
    population, e.g., activities, interests, opinions
  • Benefits Sought Motivation for purchase, e.g.,
    new, replacement, improvement
  • Usage Situation Where is the need being
    fulfilled, e.g., home, vacation, work

11
Segmentation MethodsData Visualization
12
Segmentation Methods Fords Generational
Segments
  • For 1997 Model Year
  • Redesign F-150, best selling vehicle in US.
  • Dont mess up like we did on the 1996 Taurus.
  • Provide a foundation for a large SUV (Expedition).

13
Basement-Designer, James Bulin
  • Forget benchmarking (Dodge Ram) in favor of
    automotive anthropology--20th century values.
  • We developed a way of crawling inside the heads
    and hearts of tomorrows customers.
  • The growing up experience of each generation
    establishes the rules they live by.
  • Generational research identifies macro-level
    changes in consumers desires and tastes.
  • These elements set the values of those growing up
    during an era and shape their purchasing behavior.

14
Bulins Generational Segments
15
Generational Segments Work
  • 1999 F-150 sales hit record 869,000 units, double
    those of the Dodge Ram.
  • 1998 Bulin leaves to create the Bulin Group, a
    marketing consultancy that uses generational
    research methods to
  • understand the emotional elements in individuals
    that drive purchase decisions, then tailor
    products that pull at those heartstrings.

16
Targeting Market Segments
  • After Segmentation Decision
  • Decide which segments to target with a unique
    marketing mix
  • Consider each segment in terms of its
    attractiveness and your ability to compete for
    that group of customers

17
Competitive Position -- Industry Attractiveness
Matrix
INDUSTRY ATTRACTIVENESS
18
Targeting Applied VW
  • VW moves up-market by targeting the well-heeled
    buyer of luxury cars.
  • The New 70,000 VW Phaeton
  • Battling BMW Buys Bentley

19
Targeting Applied e-Machines
  • Defined the product market as consumer desk-top
    users
  • Segmented along traditional lines e.g., price
    sensitivity and technological sophistication
  • Identified an attractive segment, where they felt
    they could compete.
  • What segment did they target?

20
Positioning
  • Positioning refers to both the place a product or
    brand occupies in customers minds relative to
    their needs and competing products or brands, and
    to the marketers decision making intended to
    create such a positioning (text p 201).

21
Positioning Process
  • ID competitors serving target market
  • Determine Determinant Attributes
  • Sample for perceptions of attributes brands.
  • Plot in targets product space
  • ID desirable place(s)
  • Map perceived attributes to Marketing Mix
    elements
  • Solidify with a positioning statement

22
Positioning Non-RX Pain Relievers among
Headache Suffers
  • ID Main Competitors
  • Determine Determinant Attributes
  • Sample for perceptions of brands and plot
  • ID Desirable Place(s)
  • Map perceived attributes to Marketing Mix
    elements that can create that perception

23
Perceptual Map of Non-RX Pain Relievers (Headache
Segment)
Harsh
Excedrin PM
Excedrin
Anacin
Bayer
ES Tylenol
Weak
Strong
Anacin 3
Panadol
Tylenol
Gentle
24
Positioning Statement
  • The mental image you want the target market to
    have of your product relative to competitors
    offerings.
  • For targeted segment using/owning your
    product is most important claim because most
    significant support.
  • For lazy pizza eaters, getting Dominos pizza
    delivered is the fastest way to tame your
    hunger because we deliver in 30 minutes or its
    free.

25
Repositioning Always Difficult
  • Oldsmobiles Woes, GMs oldest division, Until
    the oil embargo, a luxury-performance leader.
  • In the 80s, perceived as a Grandpa car.
  • Enter the Silhouette, Spokesman Spock, and the
    its not your fathers Oldsmobile tag.
  • 1990s Enter 37-year old Karen Francis the
    Intrigue, Alero, Aurora and promotions in Drew
    Carey, Hard Rock Café Rockfest and X-Files.
  • 2004 was Oldsmobile's final year.
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