STPD STRATEGIES

Pillars of Marketing

SEGMENTATION STRATEGIES

 There are many ways in which a market can be segmented. A marketer will need to decide which strategy is best for a given product or service. Sometimes the best option arises from using different strategies in conjunction. Approaches to segmentation result from answers to the following questions: where, who, why and how?

 Approaches to subdivision of a market or population into segments with defined similar characteristics. Market Segmentation Strategies How a market is segmented is based on variables used for segmentation; behavioral, demographic, psychographic and geographical differences.

Five major segmentation strategies are

Behaviour segmentation, Benefit segmentation, Demographic segmentation, Geographic segmentation, and Psychographic segmentation

Behavioural Segmentation:
Behavioural segmentation is based on the customer's needs and subsequent reaction to those needs or toward the purchase of intended products and/or services. This study is conducted on all variables that are closely related to the product itself, like loyalty to a particular brand, cost effectiveness in terms of benefits and usage, circumstances responsible for the purchase, whether the customer is a regular, a first timer or and has the potential to become a customer, and whether the readiness to buy is linked to status.

Psychographic Segmentation
Segmenting people according to their lifestyles and values, and how they translate into consumption or purchases of products of services is what psychographic segmentation is all about. How one's interest, opinions, values, attitude and the activities they perform, all affects how and why a group of people would lean towards one product more than others. A high status would translate into an expensive flying habit, while a thrift value will translate into an economy flight.

Geographical Segmentation
Geographical segmentation is done by dividing people (markets) into different geographical locations. The country, state, or neighborhood, the king of gentry, climate, size of a place segmented into size of its age wise population, etc. all play a role in devising market strategies. This helps the producer and the marketers to understand what will sell and what won't, for example, a market for winter wear would definitely not work in warm regions.

Demographic Segmentation
Demographic segmentation refers to a wide study of the potential customers. While marketing a product many variables like age, gender, education, income, size of the family, occupation, socioeconomic status, culture and religion, language and nationality are taken into account. There are many instances where such a segmentation has worked very profitably, toys and clothes for every age group, certain food products that do well in certain counties and don't in some, either due to cultural or religious reasons. Demographic segmentation plays a vital role in determining whether a product can be mass marketed or designed for specific clientele.

Targeting Strategies

 Targeting strategies are generally used in terms of advertising as ways to maximize sales profits by directing marketing projects directly at the most likely consumer base. There are several different targeting strategies but the basic goal of each remains the same, to identify the target market or audience who is most likely going to be interested in buying your product so that you reach the people who will make a purchase. In general, the aim is to spend money reaching only consumers who want your services instead of a wide audience out of which only a few people may be interested in your services or products.

Some of the most popular and frequently used targeting strategies are : Consumer marketing strategy, Behavioural targeting, Contextual targeting, and Segment marketing The common link of most of these targeting strategies is based around identifying the needs of your target audience and tailoring your marketing efforts so that you meet their needs and wants.

Consumer Marketing Strategy

Consumer marketing strategy is the best way to optimize your advertising and pr team. In order to maximize your profits from advertising you need to ensure that your target audience is receiving the proper information about your product or service. At the core of consumer marketing strategy is a focus on your consumers wants and needs. They need to feel as if you are concerned with their well being and see this reflected in the product offerings you have for them.

Behavioural Targeting
Behavioral targeting is a technique used by online publishers and advertisers to increase the effectiveness of their campaigns. Behavioral targeting uses information collected on an individual's web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual. Practitioners believe this helps them deliver their online advertisements to the users who are most likely to be interested.

Contextual targeting
Contextual targeting is the practice of aiming your advertising efforts directly at the audience who is interested in your product. The aim of contextual targeting is to place your advertisements on web pages that deal specifically with your product so that you reach only consumers who are interested in your product or service instead of a wide range of people who may have little interest in what you are selling.

Segment marketing
Segment marketing is the practice of defining your customers needs and wants by placing them in specialized groups that receive different attention and different levels of marketing. The way customers are segmented by a company can vary from business to business but generally include areas such as income, regional location, sex, socioeconomic factors, and previous buying or business associations. Once the groups are designed, the object of segment marketing becomes unified; to offer customers marketing strategies and offers that are designed with their group characteristics in mind to produce profitable results for the company. .

 The concept behind segment marketing is that if you can identify the needs of your consumers by groups then you can direct your marketing efforts to make a larger impact Segment marketing is aimed at addressing consumers needs without forcing them to look for items that they desire. When you place the appropriate service or project dressed in a marketing effort they appreciate and with a price tag that meets their expectations you can watch your marketing sales profits skyrocket, but it is not an overnight process.

 The process of target marketing is the manipulation of the marketing mix such that a distinctive product is made available for each chosen market segment. It involves formulating market coverage policies that determine the segments of the market that present the best opportunities.

 Target marketing processes identify the particular direction the company wants to follow in accordance with its understanding of market segmentation. It leads to the development of market positioning strategies.

 A decision is required about which of the following market coverage strategies will produce the best results: Undifferentiated marketing ignoring segments and attacking the whole market, aiming to satisfy the common needs of customers. Differentiated marketing operating in several segments of the market and designing separate offers for each. Concentrated marketing aiming for a large share in one or a few segments.

The decision will be influenced by the following factors:

Company resources, which will determine the extent of coverage that is achievable. Product and market homogeneity the more homogeneous the product or market, the greater the pressure for undifferentiated targeting. Product stage in the lifestyle it might be appropriate to go for wide coverage in the initial stages and to target specific segments as the product matures. Competitors segmentation strategies the company may wish to target market segments neglected by competitors

Positioning Strategy

 Positioning is a strategy of differentiating your product from that of the competition, in the mind of the prospect. A positioning strategy may be developed from the products attributes, its specific uses, the type of uses, the product class or category, or the competition. Each of these represents a different approach to developing a positioning strategy. However, all of them have the ultimate objective of developing or reinforcing an image in the minds of the audience.

Developing a Positioning Strategy

While a company can create many differences, each difference created has a cost as well as consumer benefit. A difference is worth establishing when the benefit exceeds the cost. More generally, a difference is worth establishing to the extent that it satisfies the following criteria. Important: The difference delivers a highly valued benefit to a sufficient number of buyers. Distinctive: The difference either isn't offered by others or is offered in a more distinctive way by the company. Superior: The difference is superior to the ways of obtaining the same benefit. Communicable: The difference is communicable and visible to the buyers. Preemptive: The difference cannot be easily copied by competitors. Affordable: The buyer can afford to pay the higher price Profitable: The Company will make profit by introducing the difference.

Positioning
Positioning is the result of differentiation decisions. It is the act of designing the company's offering and identity (that will create a planned image) so that they occupy a meaningful and distinct competitive position in the target customer's minds. The end result of positioning is the creation of a market-focused value proposition, a simple clear statement of why the target market should buy the product.

Different positioning strategies or themes

Attribute positioning: The message highlights one or two of the attributes of the product. Benefit positioning: The message highlights one or two of the benefits to the customer. Use/application positioning: Claim the product as best for some application. User positioning: Claim the product as best for a group of users. - Children, women, working women etc. Competitor positioning: Claim that the product is better than a competitor. Product category positioning: Claim as the best in a product category Ex: Mutual fund ranks Lipper. Quality/Price positioning: Claim best value for price

There are six basic strategies for product positioning:

By attribute or benefit- This is the most frequently used positioning strategy. For a light beer, it might be that it tastes great or that it is less filling. For toothpaste, it might be the mint taste or tartar control. By use or application- The users of Apple computers can design and use graphics more easily than with Windows or UNIX. Apple positions its computers based on how the computer will be used. By user- Facebook is a social networking site used exclusively by college students. Facebook is too cool for MySpace and serves a smaller, more sophisticated cohort. Only college students may participate with their campus e-mail IDs. By product or service class- Margarine competes as an alternative to butter. Margarine is positioned as a lower cost and healthier alternative to butter, while butter provides better taste and wholesome ingredients. By competitor- BMW and Mercedes often compare themselves to each other segmenting the market to just the crme de la crme of the automobile market. Ford and Chevy need not apply. By price or quality- Tiffany and Costco both sell diamonds. Tiffany wants us to believe that their diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and that only a chump will pay Tiffany prices.

Differentiation Strategy

Differentiation
Definition: is the act of designing a set of meaningful differences to distinguish the company's offering from competitor's offerings.

Five Dimensions of Differentiation

Product Services that accompany marketing, sales and after sales services. Personnel that interact with the customer Channel Image

Differentiating a Product
Features Quality: performance and conformance Performance - the performance of the prototype or the exhibited sample, Conformance - The performance of every item made by the company under the same specification Durability Reliability Reparability Style Design

Services differentiation
Ordering ease Delivery Installation Customer training Customer consulting Miscellaneous services

Personnel Differentiation
Competence Courtesy Credibility Reliability Responsiveness Communication

Channel differentiation
Coverage Expertise of the channel managers Performance of the channel in ease of ordering, and service, and personnel

Image differentiation
First distinction between Identity and Image - Identity is designed by the company and through its various actions company tries to make it known to the market. Image is the understanding and view of the market about the company. An effective image does three things for a product or company. It establishes the product's planned character and value proposition. It distinguishes the product from competing products. It delivers emotional power and stirs the hearts as well as the minds of buyers. The identity of the company or product is communicated to the market by Symbols Written and audiovisual media Atmosphere of the physical place with which customer comes into contact Events organized or sponsored by the company.