THE RIGHT MARKET FOR

THE RIGHT PRODUCT

THE MARKETING MANAGEMENT
PROCESS(EXHIBIT 2-1)
Whole-Company
Strategic
Marketing Management
Planning Planning

Control Marketing Implement Marketing

Plan(s) and Program Plan(s) and Program
2-2
A MARKETING STRATEGY

The
marketing mix

TARGET
MARKET

2-3
 ALL FOUR PS CONTRIBUTE TO THE
WHOLE

Product

Place Selection
of Target
Market
Promotion

Price

Understanding
2-4
the Target Market Leads to Good Strategies!
ELEMENTS OF A FIRM’S MARKETING
PROGRAM (EXHIBIT 2-8)
Target
Market
= Marketing
+ Strategy
Marketing Marketing
Mix + = Plan
Time- A Firm’s
Related + = Marketing
Details Program
Other
Marketing
Plans
2-5
ATTRACTIVE OPPORTUNITIES

Breakthrough
Opportunities

Avoid Hit-or-Miss Competitive

Marketing Advantage

2-6
 OVERVIEW OF MARKETING STRATEGY
PLANNING PROCESS(EXHIBIT 2-9)

External Market Environment

Customers

S. Segmentation and
Targeting
W.
Company TARGET
O. Differentiation and
MARKET

T. Positioning

Competitors

2-7
 MARKETING STRATEGY PLANNING:
COMPETITORS, COMPANY, & EXTERNAL
MARKET ENVIRONMENT (EXHIBIT 3-1)

Company Competitors External Market Environment

• Objectives • Current • Economic
• Resources • Prospective • Technological
• Political & Legal
• Cultural & Social

Evaluating Opportunities
• Screening criteria
• Planning grids
• Planning for multiple products

Best opportunities to pursue

 THE MARKETING ENVIRONMENT
Customers
Resources Competitive
and Objectives Environment
of the Firm Direct Marketing
Environment

Cultural and
Social Economic
Target Environment
Environment

External Marketing
External market
Environment
environment
Political and Technological
Legal Environment Environment
 SOCIAL TECHNO

Understand each factor

and its scope: OTHERS ECONOMIC

POLITICAL

STEP 1 - UNDERSTAND STEP FACTORS

 SOCIAL
 cultural and demographic aspects to determine
whether the business can compete in the market.
 assess consumer needs which compel them to make SOCIAL
a purchase.
 Age distribution,
 lifestyle changes,
 population growth,
 demographics,
 environmental,
 health and educational consciousness

STEP 1 - UNDERSTAND STEP FACTORS

 TECHNOLOGICAL
 factors which affect the means it can bring its
product or service to the market.
SOCIAL TECHNO
 technology available that make it easy or tough
to improve the production level or enter the
industry.
 government expenditure on technology,
 technological advancements,
 lifecycle of technology available,
 role of internet and the changes to it (if any)

STEP 1 - UNDERSTAND STEP FACTORS

 ECONOMIC
 economic aspects to determine whether or not
they can play a role in the success of a SOCIAL TECHNO
business.
 economic growth,
 unemployment policies, and ECONOMIC
 business cycle of the country, as well as
 economic,
 interest and inflation rates

STEP 1 - UNDERSTAND STEP FACTORS

 POLITICAL
 how legal issues and government regulations
affect the probability of a business being SOCIAL TECHNO
successful and profitable.
 political stability,
 employment laws, ECONOMIC
 safety regulations and
 trade regulations.
POLITICAL

STEP 1 - UNDERSTAND STEP FACTORS

 gather as much as relevant data you SOCIAL TECHNO

can about the external environment

of the business.
OTHERS ECONOMIC
 You can find most of the information on
the internet.
POLITCAL

STEP 2: GATHER RELEVANT DATA

EXAMPLES OF STEP FACTORS
 evaluate and identify any opportunities
these changes can

 for example, could it open up new markets?

 help you develop new products?
 or make processes more efficient?

STEP 3: IDENTIFY OPPORTUNITIES

 Elementsthat are undermining your business. This
would allow you to prevent problems, or at least
reduce their intensity.
 Current and Potential alternatives
 Price sensitivity

STEP 4: IDENTIFY THREATS

 Evaluate your organizations Strengths
 Relevant to Opportunities and Threats
 Use to take advantage of these Opportunities
 Use to counteract Threats

 Evaluate your organizations Weaknesses

 Relevant to Opportunities and Threats
 Invest in Combatting Threats
 Invest in developing capabilities and strengths

STEP 5: IDENTIFY YOUR STRENGTHS

AND WEAKNESSES
 takeadvantage of opportunities by including them in
your business plan.
 take
appropriate steps and measures to eliminate or
manage threats.

STEP 6: TAKE ACTION

 TOWS Strategic Alternatives Matrix
External Opportunities External Threats
O1 T1
O2 T2
Internal Strengths SO ST
"Maxi-Maxi" Strategy "Maxi-Mini" Strategy
S1

Strategies that use strengths to maximize Strategies that use strengths to minimize
S2
opportunities. threats.

Internal Weaknesses (W) WO WT

W1 "Mini-Maxi" Strategy "Mini-Mini" Strategy

Strategies that minimize

Strategies that minimize
W2 weaknesses by taking advantage of
weaknesses and avoid threats.
opportunities.

BUILD YOUR SWOT MATRIX

FOCUSING MARKETING STRATEGY WITH
SEGMENTATION AND POSITIONING
(EXHIBIT 4-1)

Segmentation
•Defining markets
•Dimensions to use
•Identifying segments
•Identifying segments to target Positioning
•Segmentation approaches •Understanding customer’s view
•Positioning techniques
•Evaluating segment preferences
•Differentiating the marketing mix
•Relationship between
positioning & targeting
SEGMENTATION IS A TWO-STEP
PROCESS

Naming broad
product-markets

and

Segmenting
markets to selecting
target markets and
develop marketing
mixes
MARKETERS NEED INFORMATION
ABOUT COMPETITORS (EXHIBIT 4-3)
All customer needs
Narrowing
Some generic market down to
specific
product-
One broad market
product-market

Homogeneous Segmenting
(narrow) into possible
product-markets target markets

Single Multiple Combine

Selecting target
target target d target marketing
market markets markets approach
MARKET SEGMENTATION DEFINES POSSIBLE
TARGET MARKETS (EXHIBIT 4-4)

Broad product-market (or generic market) name

goes here (The bicycle-riders product-market)

Submarket 1
(Exercisers) Submarket 3 Submarket 4
(Transportation riders) (Socializers)

Submarket 2
(Off-road Submarket 5
adventurers)
(Environmentalists)
 SEGMENTERS AND COMBINERS AIM AT
SPECIFIC TARGET MARKETS (EXHIBIT 4-6)

A segmenter Single target

market approach The
develops a Strategy
different
marketing
mix for each Strategy two
segment. Multiple target
market approach Strategy
one Strategy three

A combiner aims at two or The

more submarkets with the strategy
same marketing mix.
 RELATION OF POTENTIAL TARGET MARKET
DIMENSIONS TO MARKETING STRATEGY DECISION
AREAS (EXHIBIT 4–7)
Potential Target Market Effects on Strategy
Dimensions Decision Areas

Behavioral needs, attitudes, and

how present and potential goods Affects Product and
and services fit into customers’ Promotion
consumption patterns.

Urgency to get need satisfied and

desire and willingness to seek Affects Place and Price
information, compare, and shop.

Geographic location and other Affects size of Target

demographic characteristics of Markets, Place, and
potential customers. Promotion
 BEHAVIORAL DIMENSIONS FOR
SEGMENTING CONSUMER MARKETS
(EXHIBIT 4-8)
Needs/Occupation/
Information Education Benefits
Required Sought

Type of Thoughts/
Problem- Ethnicity/Social
Behavioral Class
solving
Segmenting
Dimensions
Kind of
Rate of Use
Shopping

Brand Purchase
Familiarity Relationship
DEMOGRAPHIC DIMENSIONS FOR
SEGMENTING CONSUMER MARKETS
Income

Sex
Demographic
Segmentation
Dimensions Age

Family size

Family life cycle

 SEGMENTING BUSINESS MARKETS
(EXHIBIT 4-9)
Kind of Type of
relationship customer

Segmenting
Dimensions
Purchasing for Demographics
methods Business
Markets

How customers
Type of buying
will use the
situation
product
 BASES FOR SEGMENTATION

Copyright 2010 Pearson Education, Inc. 31

Chapter Three Slide
  Difficult due to characteristics of
services
 Intangible
 Variable
 Perishable
 Simultaneously Produced and
Consumed
 SERVQUAL scale used to measure
gap between customers’
expectation of service and
perceptions of actual service

PERCEIVED QUALITY OF SERVICES

32

Copyright 2010 Pearson Education, Inc. Chapter Six

Slide
 The perception of price as an indicator of
product quality (e.g., the higher the price,
the higher the perceived quality of the
product.)

PRICE/QUALITY RELATIONSHIP

33

Copyright 2010 Pearson Education, Inc. Chapter Six

Slide
“PRODUCT SPACE” REPRESENTATION
OF POSITIONING (EXHIBIT 4-11)
High moisturizing

Tone 7
Zest
4
Dove Lever
5 2 2000
Sensitive
Safeguard
Coast
Lux 8
Nondeodorant 3 Deodorant

1
Dial
Lifebuoy
Lava
6

low moisturizing
For (our target market), (our brand) of all (product type) delivers
(key benefits or point of differentiation) because (our brand) is
(reasons to believe).

POSITIONING STATEMENT PROVIDES

DIRECTION FOR MARKETING STRATEGY
For 16–24-year-old males, who embrace excitement, adventure,
and fun, Mountain Dew of all carbonated soft drinks, delivers great
taste that exhilarates like no other because Mountain Dew is
energizing, thirst-quenching, and has a one-of-a-kind citrus flavor.

POSITIONING STATEMENT PROVIDES

DIRECTION FOR MARKETING STRATEGY
RECOGNIZED TRADEMARKS AND
SYMBOLS HELP IN PROMOTION (EXHIBIT
8-3)
ACHIEVING BRAND FAMILIARITY IS
NOT EASY

Brand
Insistence

Brand
Preference

Brand
Recognition

Brand Non-
Recognition

Brand Rejection
CHARACTERISTICS OF A GOOD
BRAND NAME (EXHIBIT 8-4)
• Short and simple • Suggestive of product
benefits
• Easy to spell and read • Adaptable to
packaging/labeling needs
• Easy to recognize and • No undesirable imagery
remember
• Easy to pronounce • Always timely (does not go
out of date)
• Can be pronounced in only • Adaptable to any advertising
one way medium
• Can be pronounced in all • Legally available for use (not
languages (for international in use by another firm)
markets)
PACKAGING PROMOTES, PROTECTS,
AND ENHANCES
Packaging Can Packaging Sends
Enhance the a Message
Product

Packaging Can Packaging Can

Lower Create Value for
Distribution Buyers and
Costs Sellers
CONSUMER PRODUCT CLASSES
(EXHIBIT 8-6)
Staples

Convenience
Impulse
Products

Emergency

Homogeneous
Shopping Products
Heterogeneous
Specialty Products
New Unsought
Unsought Products
Regularly Unsought
NEW-PRODUCT DEVELOPMENT
PROCESS (EXHIBIT 9-4)
1. Idea
generation

2. Screening

3. Idea
evaluation

4.Development

5. Commercial-
ization
STEP 1: IDEA GENERATION

1. Idea
1. Idea generation
generation

Ideas from: 2. Screening

• customers and users
• marketing research
3. Idea
• competitors evaluation
• other markets
• company people,
4.Development
intermediaries, etc.

5. Commercial-
ization
STEP 2: SCREENING
1. Idea
generation

2. Screening
2. Screening

• Strengths and
3. Idea
weaknesses evaluation
• Fit with objectives
• Market trends
4.Development
• Rough ROI estimate
5. Commercial-
ization
STEP 3: IDEA EVALUATION
1. Idea
generation

3. Idea Evaluation
2. Screening

• Concept testing
3. Idea
• Reactions from
evaluation
customers
• Rough estimates4.Development
of
costs, sales, and
profits 5. Commercial-
ization
STEP 4: DEVELOPMENT
1. Idea
generation

2. Screening
4. Development
3. Idea
evaluation
• R&D
• Develop model or
4.Development
service
• Test marketing mix
• Revise plans as5. Commercial-
needed ization
• ROI estimate
STEP 5: COMMERCIALIZATION

1. Idea
generation

2. Screening
5. Commercialization
3. Idea
evaluation • Finalize product and
marketing plan
• Start production and
4.Development
marketing
• “Roll out” in select
5. Commercial-
ization
markets
• Final ROI estimate
 OVERVIEW OF MARKETING STRATEGY
PLANNING PROCESS(EXHIBIT 2-9)

External Market Environment

Customers

S. Segmentation and
Targeting
W.
Company TARGET
O. Differentiation and
MARKET

T. Positioning

Competitors

2-48