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 consumers 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?

Holistic Marketing

Views on the Marketing Processes

5-C Analysis
Customer
Competitor
Company
Collaborators
Context

S-T-P Marketing
Segmentation
Targeting
Positioning

4 Ps Marketing Plan
Product
Pricing
Promotion
Place

The Functional View

Competition
Price
based

Location
Based

Competi
tion

Time
based

Quality
based

Views on the Marketing

Processes
Understanding
Customer
Value

Creating
Customer
Value

Capturing
Customer
Value

Delivering
Customer
Value

The Process View

Sustaining
Customer
Value

Understanding Customer Value

Psychological

Functional

Economic

Value Delivery System

2010
Customer
Type E
Customer
Type D

2020
VDS E
VDS A

Customer Type A

VDS D

Customer
Type C
Customer
Type B

Traditional Understanding of Market Spaces

VDS C

VDS B

Ideal Understanding of Market Spaces

Value Delivery System

Demand is never for a particular product; it is always
for the value being delivered
VDSs look at the entire value chain and not at only
the end customers
Estimate the future potential wealth of the VDS
rather than the future potential revenue from the
customers
A market space is usually defined by a large set of
related potential VDSs
Other competing VDSs should always be kept in
mind while evaluating a particular VDS (analogous to
Threat of Substitutes in Porters Five Forces)

12

B2C Buying Cycle

B2B Buying Cycle

Steps in Market Segmentation,

Targeting,and Positioning
Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Market
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Market
Positioning
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
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.
Break
market
down

2.
Group
into
segments

3.
Choose
target
market

TARGET MARKET

Basic Market-Preference Patterns

Quality

(c) Clustered
preferences

Economy

(b) Diffused
preferences

Economy

Economy

(a) Homogeneous
preferences

Quality

Quality

Bases for Segmenting Consumer

Markets
Demographic
Socio-graphic
Lifestyle
Geographic
Behavior
Consumption
Predispositions

VALS Framework

Bases for Segmenting Business

Markets
Geography
Organizational charateristics
Purchase behavior
Usage patterns
Organizational predispositions

Step 1. Market Segmentation

Requirements for Effective Segmentation

Measurable

Accessible
Substantial
Differential
Actionable

Size, purchasing power, profiles

of segments can be measured.
Segments can be effectively
reached and served.
Segments are large or profitable
enough to serve.
Segments must respond
differently to different marketing
mix elements & programs.
Effective programs can be
designed to attract and serve
the segments.

Step 2. Market Targeting

Market Coverage Strategies

Company
Marketing
Mix

Market
A. Undifferentiated Marketing

Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3

Segment 1
Segment 2
Segment 3

B. Differentiated Marketing

Segment 1

Company
Marketing
Mix

Segment 2
Segment 3
C. Concentrated Marketing

Step 2. Market Targeting

Choosing a Market-Coverage
Strategy
Company Resources
Product Variability

Products Stage in the Life Cycle

Market Variability
Competitors Marketing Strategies

Step 3. Choosing a Positioning

Strategy
Products 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
Differentiation
i.e. Features,
Performance, Style &
Design, or Attributes
Image
Differentiation
i.e. Symbols,
Atmospheres, Events

Services
Differentiation
i.e. Delivery, Installation,
Repair Services, Customer
Training Services
Personnel
Differentiation
i.e. Hiring, Training
Better People Than
Competitors Do

Five Patterns of Target Market Selection

Single-segment
concentration

Product
specialization

Selective
specialization

M1 M2 M3

M1 M2 M3

M1 M2 M3

P1

P1

P1

P2

P2

P2

P3

P3

P3
Market
specialization

Full market
coverage

M1 M2 M3
P = Product
M = Market

M1 M2 M3

P1

P1

P2

P2

P3

P3

Segment Cross-Classification: Aerobic Shoes

Gender

Geography

F
Japan
Western
Europe
U.S.

14 - 21

Age

22 - 29

Positioning: Tea - Late 1990s

Traditional flavor
Tetley Rounds

Lipton Rounds

Tetley
Lipton

Iced

Hot
Lipton Natural Teas
Nestea

Lipton Flavored

Unique flavor

4 Ps of Marketing

33