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Title: Marketing%20Strategy

Marketing Strategy
Chapter 6 Marketing Strategy Decisions
Market Segmentation Strategies
  • Mass Marketing Strategy
  • Market Segmentation
  • Multisegment Strategy
  • Market Concentration Strategy
  • Niche Marketing Strategy
  • Customized Marketing Strategy

Mass Marketing Strategy
All Customers in the Market
Single Marketing Mix
Mass Marketing Strategy
  • Mass marketing (or undifferentiated marketing) is
    aimed at the total market for a particular type
    of product.
  • Companies that adopt mass marketing assume that
    all customers in the product market have similar
    needs, and that these needs can be reasonably
    satisfied with a single marketing mix.
  • This marketing mix typically consists of a single
    product (or, in the case of retailers, a
    homogeneous set of products), one price, one
    promotional program, and one distribution system.

Market Segmentation
  • Market segmentation involves dividing the total
    market into groups of customers having relatively
    common or homogeneous needs and attempting to
    develop a marketing mix that appeals to one or
    more of these groups.
  • This approach may be necessary when customer
    needs are similar within a single group, but
    their needs differ across groups.
  • Through research, firms can identify the needs of
    each market segment and create marketing mixes
    that best match those needs and expectations.
  • There are a variety of factors that can be used
    to divide markets into homogeneous groupings, but
    most fall into one of three general categories
  • State-of-being segmentation divides markets into
    segments using demographic factors such as
    gender, age, income, and education.
  • State-of-mind segmentation deals with how
    consumers think and feel.
  • State-of-being and state-of-mind segmentation are
    really surrogates for the true issue in market
    segmentation, benefits sought.

Multisegment Strategy
More Than One Market Segment
Multiple Marketing Mixes
Multisegment Strategy
  • Firms using the multisegment option (or
    differentiated marketing) seek to attract buyers
    in more than one market segment by offering
    multiple marketing mixes that will appeal to more
    parts of the total market.
  • The firm can increase its share of the market by
    responding to the heterogeneous wants and desires
    of different segments or submarkets.
  • If the segments have enough buying potential, and
    the product is successful, the resulting sales
    increases can more than offset the increased
    costs of offering multiple marketing mixes.

P G Segmentation - Detergent Market53
market share of the 3.2 billion market
IVORY SNOW - mild, gentle soap for baby clothes
TIDE - Tides in, dirt out
ARIEL - tough cleaner
CHEER - all temperature - Cheer
DREFT - a clean you can trust
BOLD - cleans, soften,and controls static
SOLO - liquid detergent with fabric softener
GAIN - freshens like sunshine
ERA - built-in stain remover
DASH - attack tough dirt
OXYDOL - makes clothes bright
Market Concentration Strategy
Single Marketing Mix
Focused on a Single Market Segment
Market Concentration Strategy
  • Firms using the market concentration approach
    focus on a single market segment.
  • The main advantage of market concentration is
    specialization, as it allows the firm to focus
    all its resources toward understanding and
    serving a single segment.
  • However, by "putting all of its eggs in one
    basket," the firm can be vulnerable to changes in
    its market segment, such as economic downturns
    and demographic shifts.

Niche Marketing Strategy
Focused on a Small Niche Market Segment
Single Marketing Mix
Niche Marketing Strategy
  • Niche marketing narrows the market concentration
    approach even more and focuses all marketing
    efforts on one small, well-defined market segment
    that has a unique, specific set of needs.
  • The key to niche marketing is to understand and
    meet the needs of target customers so completely
    that, despite the small size of the niche, the
    firms substantial share makes the segment highly

Customized Marketing Strategy
Unique Marketing Mixes
Individual Customers
Customized Marketing Strategy
  • Customized (or individual) marketing involves the
    creation of a unique marketing mix for each
    customer in the target segment.
  • This approach is common in business-to-business
    marketing where unique programs and/or systems
    are designed for each and every customer.
  • Such "one-on-one" marketing is more rare in
    consumer marketing.

Developing the Marketing Mix
  • Marketing strategy decisions for the marketing
    mix involve creating a combination of product,
    price, promotion, and distribution that, to the
    greatest extent possible, matches the needs of
    customers in the chosen target market segment(s)
  • In-depth, current data about the target market is
    necessary to provide information on customer
    preferences for product features, attitudes
    toward competitors' products, price/budget
    considerations, and the frequency and intensity
    with which the product is used.
  • With this information, the marketing manager has
    the potential to develop a marketing mix that
    delivers value and customer satisfaction better
    than competitors' mixes.

  • The product is at the core of the marketing
  • Products refer to more than tangible goods and
    are usually some combination of goods, services,
    ideas, and even people.
  • Products in and of themselves are of little
  • The real value a product provides is derived from
    its ability to deliver benefits that enhance the
    buyer's situation.
  • Organizations that keep their sights set on
    developing products, systems, and processes that
    identify and meet needs of the target market are
    more likely to be successful.

Marketing Strategy Options Related to the Newness
of Products
  • Innovation involves the firm in a pioneering
    effort innovations of this type can even result
    in new product categories.
  • New product lines allow a firm to enter new
    markets with a new group of closely related
    product items that are considered a unit based on
    technical, or end-use, considerations.
  • Product line extensions supplement an existing
    product line with new styles or models.
  • Improvements or changes in existing products
    offer customers improved performance or greater
    perceived value this option also includes
    changes to make an existing product "new and
  • Repositioning involves the modification of
    existing products (either real or through
    promotion) so that they can be targeted at new
    markets or segments.
  • Cost reductions involve modified products that
    offer similar performance at a lower price.

  • Price can be the most critical, the most visible,
    and the most over manipulated element of the
    marketing mix.
  • The manager must set the price correctly to
    achieve the right balance between customers'
    needs, alternative solutions, and the firm's need
    to cover its direct and indirect costs, while
    also making an acceptable profit.
  • Price is the most flexible element of the
    marketing mix as it can be adjusted to meet
    changing market conditions.
  • Price is more than a financial or economic issue
    it also has significant social and psychological
  • There are two points of view to consider with
    regard to price.
  • To the marketer, price is the amount of money
    that the firm is willing to accept in exchange
    for a product.
  • To customers, price is anything they are willing
    to give up in exchange for the product.

Marketing Strategy Options related to the Pricing
of Products
  • Companies that employ a competitive pricing
    strategy of operational excellence focus on
    efficiency of operations that lowers costs and
    allows them to deliver goods and services to
    their customers at lower prices and thus a better
    value. Regardless of their appeal, low price
    strategies are frequently not sustainable over
  • Ongoing discount, or everyday low pricing (EDLP)
    strategy, is another commonly employed strategy,
    particularly in retailing.
  • Prestige pricing strategy is the focal point of a
    marketing mix oriented toward a high quality,
    prestige product image. In order for this
    strategy to be successful, customers must
    perceive the firm's product to be of
    significantly higher quality than competing

  • Promotion activities are necessary to communicate
    the features and benefits of a product to its
    intended target market(s).
  • The role of advertising, sales promotion,
    personal selling, and public relations (elements
    of the promotional mix) in a particular marketing
    strategy will vary depending on the nature of the
  • The role of promotion mix elements also varies by
    stage in the product purchase process (awareness,
    interest, desire, and action).
  • Promotion mix decisions are affected by price, as
    lower priced products tend to have a lower
    profitability per unit that would dictate
    advertising while higher priced products include
    a level of margin that makes covering the costs
    of personal selling feasible.

Promotion Strategies
Push Strategy
End Users
Pull Strategy
Marketing Communications
Request Products
Request Products
End Users
Distribution (Place)
  • Distribution refers to both of the following
  • Marketing channelsa system of organizations
    through which a product, resources, information,
    and/or product ownership flows from producer to
  • Physical distributionmoving products to the
    right place in the right quantities at the right
    time, and in a cost-efficient manner.
  • Logistics strategies address physical
    distribution issues, such as transportation,
    storage, materials handling, and the systems and
    equipment necessary for these functions.
  • A good distribution strategy is essential because
    once a channel is selected and commitments are
    made, distribution often becomes highly
    inflexible due to long-term contracts,
    investments, and commitments with channel

Marketing Strategy Options related to the
Distribution of Products
  • There are three basic strategic options for
    distribution in terms of the amount of market
    coverage and level of exclusivity between vendor
    and retailer.
  • Exclusive distribution gives one merchant or
    outlet the sole right to sell a product within a
    defined geographic region (e.g., Rolex,
  • Selective distribution gives several outlets the
    right to sell a product in a defined geographic
    region (e.g., Bose, franchising industry).
  • Intensive distribution makes a product available
    in the maximum number of outlets in each region
    to gain as much exposure and as many sales
    opportunities as possible (e.g., things sold at a
    convenience store).

Differential Strategies Product Descriptors
  • Product features are factual (hopefully)
    descriptors of the product.
  • Advantages are performance descriptors that
    communicate how the features make the product
    behave, hopefully in a fashion that is
    distinctive and appealing to the target
  • Benefits are the positive outcomes or need
    satisfactions people acquire from purchased
  • Another product descriptor that is highly valued
    by customers is quality, which refers to the
    overall characteristics of a product that allow
    it to perform as expected in the satisfaction of
    customer needs.

Differentiation Strategy Image
  • The image of a product, or organization, is the
    overall impression, positive and negative, that
    target customers have of it.
  • This impression includes what the entity has done
    in the past, what it presently offers, and
    projections about what it will do in the future.
  • All aspects of the firm's marketing mix as
    perceived by target customers will affect this
    overall impression.
  • Marketers can manipulate the marketing mix
    elements to position and enhance a product's
    image (typically through promotion activities) in
    consumers' minds.

Positioning Strategies Strengthen Current
  • The key to strengthening a product's current
    position is to constantly monitor what target
    customers want and the extent to which the
    product or SBU is perceived as satisfying those
  • The firm must continue to invest time, money,
    talent, and attention in after-sale service to
    protect its market share and sales from
  • Strengthening positioning is about continually
    "raising the bar" of customer expectations, and
    being perceived by customers as the only firm
    capable of reaching the new height.

Positioning Strategies Repositioning
  • Move yourself to a New Position
  • Declining sales or market share may signal that
    customers have lost faith in a product's ability
    to satisfy their needs. In such cases,
    strengthening the present position may well
    accelerate the downturn in performance a new
    position may be the best response.
  • Repositioning may involve a fundamental change in
    any of the marketing mix elements, and perhaps
    even all of them.
  • Move the Competition to a New Position
  • Sometimes, it is advantageous to attempt to
    reposition the competition rather than change
    your own position.
  • A direct attack on a competitor's strength may
    put its products in a less favorable light, or
    even force the competitor to change its
    positioning strategy.
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