Marketing Strategy Chapter 5

1
Marketing Strategy(Chapter 5)

• business strategy and marketing strategy
• STP (segmenting, targeting, positioning)
• marketing strategies for online and/or offline

2
Assessing the Fit Between Business-Unit Strategy
and Marketing Strategy
Goal Alignment
Implementation Alignment
Resource Alignment
Fit
Activity Alignment
Exhibit 5-1
3
Marketing Strategy Decisions
Marketing Strategy Decisions
Product
Promotion
Positioning and Target-Market Selection
Price
Distribution
Exhibit 5-2
4
Key Concepts in Marketing Strategy
Marketing Strategy
Targeting
Segmentation
Positioning

• Divide market into useful sub-units of consumers
  who are similar in what they value within the
  product category, in terms of their cost to
  serve, or in characteristics that make them
  accessible to a particular marketing program

• The target market is the segment (or segments) of
  the market most attractive to the firm based on
  profitability, cost to serve, accessibility
  and/or growth potential

• The benefits of the product are strategically
  communicated to the target market in order to
  secure a strong position in terms of consumer
  perceptions of the offering

5
Marketing Strategy Formulation
Pure-Play Firm
Bricks-and-Mortar Firm
Online Business-Unit Strategy
Business-Unit Strategy

• Overall
• Online
• Offline

Marketing Strategy for Online Business
Integrated Marketing Strategy
Marketing Strategy for Offline Business
Marketing Strategy for Online Business

• Choices
• 1. Segmentation
• 2. Target market selection
• 3. Positioning

• Choices
• 1. Same vs. different segment
• 2. Same vs. different target market
• 3. Same vs. different positioning

Exhibit 5-3
6
Marketing Strategy in the Networked-Economy Firm

• The Internet affects marketing strategy for
  networked-economy firms in four broad ways
• finer gradations of segmentation
• faster cycle time of marketing strategy
  development
• increased accountability of marketing efforts
• increased integration of marketing strategy with
  business strategy and operations

7
Bricks-and-Mortar Segmentation Scenarios
Change in Segmentation Characteristics Due to
Internet

• Reclassified Expansion

Yes

• Market Expansion

Changes in Size of Market Segments
No

• Market Reclassification

• No Change

Exhibit 5-6
No
Yes
8
Bricks-and-Mortar Targeting Scenarios
Customer Similarity
Different Customers
Same Customers
Blanket Targeting
Be-Different Targeting
Entire Segment
Focus of Effort
Beachhead Targeting
Bleed-Over Targeting
Portions of a Segment
Exhibit 5-7
9
Bricks-and-Mortar Positioning Scenarios and
Guidelines
Customer Similarity
Different Customers
Same Customers
Blanket Targeting
Be-Different Targeting

• Borrow heavily from existing offline positioning
• Tout basic advantages of the Internet
  convenience and accessibility

• Reposition entirely
• Position differentiations that cater to the new
  segment

Entire Segment
Focus of Effort
Beachhead Targeting
Bleed-Over Targeting

• Also borrow from offline positioning
• Focus more, however, on needs of the smaller
  group
• Stress value-added of the Internet

• Use dual positioning
• Leverage existing positioning
• Position added benefits, such as augmented
  offerings via the Internet (e.g., increased
  product customizability)

Portions of a Segment
Exhibit 5-8
10
Positioning Plan for Pure-Play Internet Firms
Pure-play firms should follow the following five
steps when creating a positioning plan
2. Determine Ideal Product Position
1. Identify ActualProduct Positioning
3. Develop AlternativeStrategies for
AchievingIdeal Product Position
4. Select andImplement theMost
PromisingAlternative
5. Compare New Actual Position with Ideal
Position

• Source Paley, Norton. The Managers Guide to
  Competitive Marketing Strategies. New York
  AMACOM, 1989.

11
Offering-Based Segmentation of Auction Market
Amazon Yahoo Egghead.com ePage
Cityspree Qool DealDeal
eBay uBid
BidZ eWanted
Mass
Type of Offering
Dell Auction AuctionLaptops
Collectors Car Auction
Manheim Autos
Niche
Multi-Type (Auction Retail)
P2P
B2C / B2B
Auction
Exhibit 5-9
Breadth of Business
12
Marketing Strategy Conclusion

• Marketing strategy has three main components
• Segmentation, or identifying relevant market
  segments with specific needs
• Targeting, or choosing an attractive segment
  consistent with the firms resources and goals
• Positioning, or strategically communicating the
  products benefits to the target segment
• The Internet affects marketing strategy in
  networked-economy firms through
• Finer segmentation
• Faster development of marketing strategy through
  faster information gathering
• Increased tracking and accountability of
  marketing efforts
• Increased integration with business strategy and
  operations