MARKETING STRATEGYVidya Panicker Session 3 NOTES ON STPD STRATEGIES Most important and fundamental tools in the marketer’s toolkit: SEGMENTING TARGETING POSITIONING DIFFERENTIATION These tools provide the platform on which most effective marketing programs are built. All must be well considered and implemented if the firm is to be successful in managing a given product-market relationship. SEGMENTATION The first step in the process of product promotion is Segmentation The division of a broad market into small segments comprising of individuals who think on the same lines and show inclination towards similar products and brands is called Market Segmentation. Market Segmentation refers to the process of creation of small groups (segments) within a large market to bring together consumers who have similar requirements, needs and interests. The individuals in a particular segment respond to similar market fluctuations and require identical products. In simpler words market segmentation can also be called as Grouping. Eg. Kids Males Females Youth Students Professionals /office goers Elderly Tourists Patients (suffering from a particular ailment) 1 Nebula. Edge. Raga. rescue vehicles.Anheuser Busch (Budweiser) – premium beer for beer connoisseurs Oshkosh Corporation – emergency crash. organization then targets them. gear & apparels Caterpillar – construction & mining equipment . Once the organization decides on its target market. financial services and insurance Titan – Sonata. This process is called TARGETING. Positioning helps organizations to create a perception of the products in the minds of target audience. POSITIONING Positioning is the last stage in the Segmentation Targeting Positioning Cycle. Once market segments are created. Bandhan. he then devises various marketing strategies and promotional schemes according to the tastes of the individuals of particular segment. 2 . Organizations with the help of various marketing plans and schemes target their products amongst the various segments. Targeting is the second stage and is done once the markets have been segmented. Octane. Fastrack. and Xylys TARGETING Once the marketer creates different segments within the market. They understand their target audience well and each of their handsets fulfil the needs and expectations of the target market. Marketers create a first impression of the product in the minds of consumers through POSITIONING. Ray Ban sunglasses have no takers amongst the lower income group. refuse vehicles etc. Ray Ban and Police Sunglasses cater to the premium segment while Fastrack sunglasses target the middle income group. Regalia. Tata Motors launched Tata Nano especially for the lower income group. it strives hard to create an image of its product in the minds of the consumers. Nike – sports goods. Nokia offers handsets for almost all the segments. usage rate.Daily skin care products. That’s brand positioning. Income. Basis of segmentation 1. buyer readiness stage Why market segmentation ? Not all individuals have similar needs. kids. Race. It helps marketers to devise appropriate marketing strategies and promotional schemes as per the tastes of particular market segments. Marital status. Organizations can adopt a more focussed approach as a result of market segmentation. teenagers. Demographic Gender. office goers. teenagers as well as older generation) Men .Hair colour products. Psychographic Value. occasions. VALS-2) based on social class. usage pattern. user status. lifestyle.Garnier & Nivea offer wide range of merchandise for both men and women. Attitude and Lifestyle segmentation (VALS.Cream to fight signs of ageing. Education. women. Age. Occupation. Males. hair care products Teenagers . wrinkles A female would never purchase a sunscreen lotion meant for men and vice a versa. (Men. Behavioural Segmentation based on loyalty. personality characteristics 4. Ethnic origin 2. Garnier Light (Fairness cream) Older Generation . Deodorant Women . Each of their brands has been targeted well amongst the specific market segments. It helps marketers to understand the needs of the target audience and adopt specific marketing plans accordingly. females. benefits. Geographic Classification of market depending upon geographical areas 3. the elderly have different set of needs Market Segmentation brings together individuals with similar choices and interests on a common platform.Sunscreen lotions. 3 . Geographical segmentation classifies consumers according to their locations.visited by higher mid level executives Nano or Alto – low income group Mercedes or BMW – Top level Executives It helps the organizations to target the right product at the right customers at the right time. It helps the organizations to know and understand their customers better. A Rolex or Omega watch – high income group Zodiac or Van Heusen store . It helps the organizations to concentrate their hard work on the target audience and get suitable results. 4 . VALS SEGMENTATION (used for Psychographic segmentation) VALS FRAMEWORK VALS is a marketing and consulting tool that helps businesses worldwide develop and execute more effective strategies.Why market segmentation ? It gives the customers a clear view of what to buy and what not to buy. The system identifies current and future opportunities by segmenting the consumer market place on the basis of the personality traits that drive consumer behavior. VALS specifically defines consumer segments on the basis of those personality traits that affect behavior in the marketplace. variety and risk taking 5 . The basic tenet of VALS is that people express their personalities through their behaviors. VALS 2 SEGMENTATION Principle oriented – motivated by abstract and idealized criteria Status oriented – buy products to demonstrate their success Action oriented – guided by need for social or physical activity. VALS uses psychology to segment people according to their distinct personality traits.VALS applies in all phases of the marketing process. from new-product development and entrystage targeting to communications strategy and advertising. Rather than segregating people with like activities. 6 .VALS 2 ( VALUES. a system that divided people into three basic lifestyle groups (Need driven. and eagerness to purchase resources that. and Inner directed). Resource dimension includes education. energy level. and variety. Outer directed. VALS-2 was developed by the US consulting firm Stanford Research Institute (SRI) as an improvement on its original VALS (introduced in 1978). (6) Experiencers. increase from youth to middle age decline afterwards. intelligence. (3) Action oriented: seeks activity. The eight basic lifestyle groups are (1) Actualizers. (4) Achievers. (2) Fulfillers. income. (2) Status oriented: influenced by other's thinking. Selforientation is divided into three parts (1) Principle oriented: having set views. (7) Makers. in general. (3) Believers. health. (5) Strivers. and (8) Strugglers. ATTITUDES AND LIFESTYLE SYSTEM) for Segmentation Proprietary psychographic consumer segmentation system that classifies people into eight basic lifestyle groups on the basis of two dimensions: resources and self-orientation. adventure. Their attitude towards a product is often based on social or psychological attributes. Dove. Pepsi.micromarketing involves research about actual attributes. Local marketing 2. Lifebuoy Segmented marketing .Instead of going for a small share of a large market. lifestyle and attitudes of target customers (specific types of wine.. Ezee) Micro marketing . spending habits.Economy Lodging Residence Inn. Vertu. (Lux. 2. Specific communities on Bharat Matrimony) 1. Pepsi. Coke.Different Targeting Strategies Suit Different Opportunities Undifferentiated Marketing (mass marketing) eg.) .The company decides to operate in several market segments and designs separate offerings for each. the company goes for a large share of one or few submarkets or niches (Star Cricket. Harley Davidson (for bike enthusiasts) Micromarketing ( local and individual marketing) . Rexona. 7 . Knorr.Permanent vacationers Fairfield Inn..... Breeze Concentrated Marketing (niche marketing) Luxury brands (elite class). Pears. Individual Marketing Types of Positioning 1.focus is on customization of products Mass Marketing – no segmentation . Dove .Business Travellers HUL (Soap category) : Lifebuoy. Lifebuoy) Concentrated Marketing . Based on technical data rather than on market data. breads etc.Extended Stay Courtyard By Marriott. Lux. Physical Positioning – Involves comparison of only the physical dimensions of alternative offerings .... marketing to all eg.Practice of tailoring products and marketing programmes to suit tastes of specific individuals and locations (Kaya Skin clinic. Perceptual Positioning – Many consumers are concerned with the benefits a product provides rather than the physical attributes. Kissan Differentiated Marketing (segmented marketing) Marriott International Marriott Suites. Determine customer’s most preferred combination of determinant attributes Examine the fit between preferences of market segments and current position of product (market positioning). (Identify positions where additional new products might be placed ) Write positioning statement or value proposition to guide development and implementation of marketing strategy Types of Positioning Strategies Mono Segment Positioning Multi Segment Positioning Imitative Positioning Anticipatory Positioning Adaptive Positioning Defensive Positioning …. Collect information from a sample of customers and potential customers about perceptions of each product on the determinant attributes.. 8 .Steps in the Positioning Process Identify relevant set of competitive products serving a target market Identify the set of determinant attributes that define the “product space” in which positions of current offerings are located.contd…. Determine product’s current location (positioning) in the product space and intensity thereof. Strategic Objectives. This business screen became known as the GE/McKinsey Matrix (as shown below) and is used for Portfolio Analysis. and Resources Allocation 9 . Implications of Alternative Positions within the Market Attractiveness/ CompetitivePosition Matrix for Target Market Selection.In consulting engagements with General Electric in the 1970's. McKinsey & Company developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic business units (SBU). Differentiation can be achieved on the following parameters Form Features Performance quality Conformance quality Durability Reliability Reparability Style Design THANKS 10 .