Marketing & Social Media

Market targeting (targeting): evaluating each market segment's attractiveness and selecting one or more segments to enter.

Target market: a set of buyers sharing common needs or characteristics and that the company decides to serve.

• Future growth potential
• Strategic significance
• Competitors' marketing activities
• Size and growth characteristics (i.e. purchasing power, market volume)
• Company's resources and capabilities
• Structural attractiveness
• Costs of serving the segment

• A firm produces numerous products and promotes them with a differentiated marketing mix designed to satisfy smaller segments
• Specific products for clearly defined segments
• Competitive advantage due to unique products that meet the needs of target segments
• Profit opportunities due to higher margins of specific products.

• A firm produces only one product or product line and promotes it to all customers with a single marketing mix
• One product for a mass market
• Competitive advantage due to price advantage, superior quality or strong promotions
• Profit opportunities due do economies of scale in production and marketing

You start with targeting broadly

• Undifferentiated (mass) marketing
  • Go after the whole market
  • One size fits all
  • E.g. gasoline, electricity, ford model T
• Differentiated (segmented) marketing
  • Target several segments
  • Design separate offers for each
  • E.g. cars, tourism, retail, procter & gamble
• Concentrated (niche) marketing
  • Go after a large market share of one or very few segments or niches
  • E.g. specialty shop (asian food), läderach
• Micromarketing (local or individual marketing)
  • Customized, tailor-made
  • To the needs and wants of specific individuals or local customer segments
  • Mass customization
  • E.g. my music, my MMs

And you end with targeting narrowly

A customer-driven marketing strategy consists of four steps: Market segmentation, choice of target market, positioning, and differentiation.

Market segmentation is the act of dividing a market into distinct segments of buyers with different needs, characteristics, or behaviors who might require separate products or marketing mixes.

Market targeting evaluates each market segment’s attractiveness and selects one or more segments to serve.

For consumer marketing the major segmentation variables include demographic and geographic criteria, economic and social status, buying behavior, product usage, and personality and lifestyle.

Business markets can be segmented by business demographics, operating characteristics, purchasing approaches, situational factors, and personal characteristics.

The effectiveness of the segmentation analysis depends on finding segments that are heterogeneous, measurable, substantial, accessible, and actionable.

After evaluating the best market segments to target, a company chooses one of four market-targeting strategies – ranging from very broad (undifferentiated or mass marketing) to more or less narrow targeting (differentiated marketing, concentrated or niche marketing, and micromarketing).

Positioning

Product position: the way a product is defined by consumers on important attributes the place the product occupies in consumers' mind relative to competing products.

Positioning statement: a statement that summarizes company or brand positioning. It captures the target segments and their needs, the positioning concept, and the specific points of difference.

Maintaining the existing market position: the company continues to focus on the same target segment(s). The current positioning strategy is maintained.

Necessary conditions:

1. The current product position provides the company now and in the foreseeable future with a comparative competitive advantage in the eyes of the target group(s)
2. The existing target group is economically attractive and sustainable

Necessary Activities:

• Invest to further strengthen the existing market position.
• Adaptations of the marketing mix on an instrumental level. E.g. gillette

Maintain the existing core customer group(s) and simultaneously attract new ones

Reasons for repositioning:

• Shrinking of the existing market segment
• Economic marketing goals cannot be realized withing the existing market segment(s)
• Competitor's' activities
• Claims of other stakeholder groups

Necessary activities:

• Adaptation of the existing positioning strategy
• Qualitative and quantitative adaptation of the marketing mix on an instrumental level

New positioning is equivalent to the launch of a new product or the occupation of a fundamentally new image dimension

Reasons for new positioning

• Target groups have an increasingly negative opinion of the product
• Lack of a comparative competitive advantage; little prospects of catching up with competitors
• Lack of economic attractiveness of existing target group(s)

Necessary activities:

• Strategic reorientation of the company / business unit; based on a new or fundamentally changed target group
• Exploitation of a new product value relevant to customers and previously neglected by competitors

Communicating and Delivering the Chosen Position:

• All the company's marketing mix efforts must support the positioning strategy
• Firm must take care to maintain the position obtained through consistent performance and communication
• Product's position should be monitored and adapted over time to match changes in consumer needs and competitors' strategies.

• The new target group is not reached due to deficiencies in implementing the positioning strategy / consider the message irrelevant etc.
• Risk of losing existing target group / risk of losing existing comparative advantage
• Financial risk / investment in new strategy is not recovered
• Resistance to change / strategy is not implemented
• Confusion of existing customers / consider message irrelevant etc.

Customers are faced with a wide range of offers that can vary more or less regarding price and / or other performance characteristics What matters is: #Are these differences perceived by the customer? #Are they relevant from a customer’s perspective?

Competitive advantage: An advantage over competitors gained by offering greater customer value either by

 –Having lower prices, or

 –Providing more benefits that justify higher prices

Firms can differentiate in terms of product, services, channels, people, or image

Developing a unique selling proposition (USP, UAP, USL) for each brand and sticking to it • Positioning on more than one differentiator

Differentiation

• The objective is to gain a competitive advantage by offering greater customer value through providing more benefits that justify higher prices.
• Key to winning target customers is to understand their needs better than competitors do and to deliver more value.
• Finding points of differentiation requires that marketers examine the entire customer experience.

Differences to promote:

• Important
• Distinctive
• Superior
• Communicable
• Pre-emptive
• Affordable
• Profitable

A competitive advantage is gained by offering greater customer value through lower prices.

Sources of Cost Advantages

• Economies of Scale
• Economies of Learning
• Process technology and design
• Product design
• Input costs
• Capacity efficiency
• Organizational efficiency

It is horizontal and vertical growth completed with lateral growth and co-branding.

Horizontal and vertical growth: existing products will be varied or will be launched by new companies.

Leads to a higher flop risk because..

• There is no market growth, but a fragmented market will arise.
• The new product variants will remove existing consumers from traditional products
• Only a few products will reach such a great volume that they lead to profit.

Lateral growth and co branding: existing product will be combined with a new second product category to a new product.

Advantage: new products and new markets will arise

It is the overlapping of the three areas of Customer Lifecycle, Customer Experience and Customer Value

Marketing involves creating value for customers and building strong customer relationships in order to capture value from customers in return. Goals:

–Attract new customers by promising superior value

–Keep and grow current customers by delivering satisfaction

Marketing consists of creating, maintaining, and growing desirable exchange relationships with target audiences.

 –Marketers build strong relationships by consistently delivering superior customer value.

Delivering superior customer value and satisfaction to build and maintain profitable customer relationships

• Customer-perceived value: Customer’s evaluation of the difference between all the benefits and costs of a marketing offer relative to those of competing offers
• Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s expectations

 Customers form expectations about the value and satisfaction of market offerings.

• Satisfied customers buy again and spread the word.
• Dissatisfied customers switch to competitors and criticize the product to others.

Customer satisfaction: Difference between consumers’ expectations and perceived performance of the good or service purchased.

Cognitive dissonance: Buyer discomfort caused by post purchase conflict

Marketing management: Choosing target markets and building profitable relationships with them. Basic factors to design a winning marketing strategy:

 –Target market

–Value proposition

• Identify latent or current unsatisfied needs
• Reduce barriers to purchase
• Convince customers of the benefits of your own offer

- after-sales-management

Management of customer complaints

Cross-selling

Up-selling

• Having good customer relationship management
• Offering greater variety to current customers
• Creating programs to cross-sell and up-sell to market more products and services to existing customers