Elements of Marketing Strategy

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Elements of Marketing Strategy

• David Forlani
• University of Colorado at Denver and Health
  Sciences Center

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Presentation Overview

• Marketing Strategys
• Place in the Organization
• Elements Defined and Illustrated
• Defining Markets,
• Segmenting Markets,
• Targeting Market Segments and
• Positioning within Targeted Segments

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Decision Level

• What industries to compete in is a
  corporate-level strategic decision.
• What product-markets to compete in is a
  business-unit-level strategic decision.
• What marketing program to implement in a given
  product-market is a marketing-level strategic
  decision.

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Marketing Programs

• Marketing Strategy is the Unifying Part of a
  Marketing Program. It determines the target
  market and positioning objectives.
• The Marketing Mix is the Action of the Marketing
  Program. It implements the strategy through its
  elements, the 4 Ps (Product, Price, Place and
  Promotion).

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Establishing BoundariesDefining Product-Markets

• Broadest The market is the industry.
• Narrowest The market is one user.
• Useful Set of current and potential users of the
  need/want satisfaction you plan to offer.

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P-M Evolution Full-Size Fade
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Market Segmentation Defined

• Market segments are distinct subsets of people
  with similar needs, circumstances and
  characteristics that lead them to respond in a
  similar way to a particular product or service
  offering, or to a particular strategic marketing
  program (text, p 17).

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Segmentation Criteria

• SizeIs the segment big enough to be profitable?
• StabilityIs there enough time to enter and make
  a profit?
• AccessibilityCan we communicate with the people
  in this segment as it is defined?
• Differential ResponseHow do we need to change
  the marketing mix to participate in each segment?

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SegmentationFinding Differential Response

• Identify actionable characteristics such that
• Groups of users within a level of that
  characteristic respond similarly to a given
  marketing program, AND
• Groups of users at other levels of the
  characteristic respond differently.

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Typical Segmentation Variables

• Demographics External characteristics of a
  population, e.g., age, gender, income
• Psychographics Internal indicators of a
  population, e.g., activities, interests, opinions
• Benefits Sought Motivation for purchase, e.g.,
  new, replacement, improvement
• Usage Situation Where is the need being
  fulfilled, e.g., home, vacation, work

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Segmentation MethodsData Visualization
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Segmentation Methods Fords Generational
Segments

• For 1997 Model Year
• Redesign F-150, best selling vehicle in US.
• Dont mess up like we did on the 1996 Taurus.
• Provide a foundation for a large SUV (Expedition).

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Basement-Designer, James Bulin

• Forget benchmarking (Dodge Ram) in favor of
  automotive anthropology--20th century values.
• We developed a way of crawling inside the heads
  and hearts of tomorrows customers.
• The growing up experience of each generation
  establishes the rules they live by.
• Generational research identifies macro-level
  changes in consumers desires and tastes.
• These elements set the values of those growing up
  during an era and shape their purchasing behavior.

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Bulins Generational Segments
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Generational Segments Work

• 1999 F-150 sales hit record 869,000 units, double
  those of the Dodge Ram.
• 1998 Bulin leaves to create the Bulin Group, a
  marketing consultancy that uses generational
  research methods to
• understand the emotional elements in individuals
  that drive purchase decisions, then tailor
  products that pull at those heartstrings.

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Targeting Market Segments

• After Segmentation Decision
• Decide which segments to target with a unique
  marketing mix
• Consider each segment in terms of its
  attractiveness and your ability to compete for
  that group of customers

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Competitive Position -- Industry Attractiveness
Matrix
INDUSTRY ATTRACTIVENESS
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Targeting Applied VW

• VW moves up-market by targeting the well-heeled
  buyer of luxury cars.
• The New 70,000 VW Phaeton
• Battling BMW Buys Bentley

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Targeting Applied e-Machines

• Defined the product market as consumer desk-top
  users
• Segmented along traditional lines e.g., price
  sensitivity and technological sophistication
• Identified an attractive segment, where they felt
  they could compete.
• What segment did they target?

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Positioning

• Positioning refers to both the place a product or
  brand occupies in customers minds relative to
  their needs and competing products or brands, and
  to the marketers decision making intended to
  create such a positioning (text p 201).

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Positioning Process

• ID competitors serving target market
• Determine Determinant Attributes
• Sample for perceptions of attributes brands.
• Plot in targets product space
• ID desirable place(s)
• Map perceived attributes to Marketing Mix
  elements
• Solidify with a positioning statement

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Positioning Non-RX Pain Relievers among
Headache Suffers

• ID Main Competitors
• Determine Determinant Attributes
• Sample for perceptions of brands and plot
• ID Desirable Place(s)
• Map perceived attributes to Marketing Mix
  elements that can create that perception

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Perceptual Map of Non-RX Pain Relievers (Headache
Segment)
Harsh
Excedrin PM
Excedrin
Anacin
Bayer
ES Tylenol
Weak
Strong
Anacin 3
Panadol
Tylenol
Gentle
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Positioning Statement

• The mental image you want the target market to
  have of your product relative to competitors
  offerings.
• For targeted segment using/owning your
  product is most important claim because most
  significant support.
• For lazy pizza eaters, getting Dominos pizza
  delivered is the fastest way to tame your
  hunger because we deliver in 30 minutes or its
  free.

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Repositioning Always Difficult

• Oldsmobiles Woes, GMs oldest division, Until
  the oil embargo, a luxury-performance leader.
• In the 80s, perceived as a Grandpa car.
• Enter the Silhouette, Spokesman Spock, and the
  its not your fathers Oldsmobile tag.
• 1990s Enter 37-year old Karen Francis the
  Intrigue, Alero, Aurora and promotions in Drew
  Carey, Hard Rock Café Rockfest and X-Files.
• 2004 was Oldsmobile's final year.