Markedsføring kapittel 7

How many differences to promote

Some marketers say that a company should develop a unique selling proposition. -> choose one thing-> buyers tend to remember the very first thing. Other marketers think that companies should position themselves on more than differentiator. This may be necessary if two or more firms are claiming to be best at the same attribute. Today, in a time when the mass market is fragmenting into many small segments, companies and brands are trying to broaden their positioning strategies to appeal to three or more segments.

Developing a positioning statement

Company and brand positioning should be summed up in a positioning statement: a statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point difference) Note that the positioning statement first states the product's membership in a category and then shows its point of difference from other members of the category. The case for the brand's superiority is made on its points of difference.

Choosing a differentiation and positioning strategy

The differentiation and positioning task consists of three steps: identifying a set of differentiating competitive advantages on which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy.

Selecting target market segments

A company must decide how many segments it will target. A target market consists a set of buyers sharing common needs or characteristics that the company decides to serve. Companies can target: Broadly: undifferentiated->a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. -> focuses on what is common in the needs instead than on what is different. Very narrowly: micromarketing: tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments.-> local marketing and individual marketing. Local marketing: tailoring brands and marketing programs to the needs and wants of local customer segments. (cities, neighbourhoods, stores etc.) Advances in communication technology have given rise to high-tech versions of location marketing. -> going mobile increasingly -> SoLoMo (social + local + mobile) Can drive up marketing costs by reducing economies of scale/ can create logistic problems when trying to meet varied requirements of different markets. Individual marketing: tailoring products and marketing programs to the needs and preferences of individual customers. (one-to-one/ mass customisation) Mass customisation is the process by which firms interact one to one with masses of customers to design products and services tailor-made to individual needs. -> has made relationships with customers more important. -> provides a way to stand out against competitors. Somewhere in between: differentiated: a firm decides to target several segments and designs separate offers for each. By offering variation to segments -> higher sales and stronger position in market segment. Also increases costs -> requires extra marketing research, forecasting, sales analysis etc. Somewhere in between: Concentrated marketing: a firm goes after a large share of one or a few segments or niches. Through concentrated marketing, the firm achieves a stronger market position because of its greater knowledge of consumer needs in the niches and the special reputation they need. Niching lets smaller companies focus their limited resources on serving niches that may be unimportant or overlooked by big companies. Low cost of setting up shop on the internet is even more profitable to serve miniscule niches. Companies rely on one or few segments for all of their business will suffer greatly if the segment turns sour.

Which differences to promote

A difference is worth establishing to the extent that it satisfies the following criteria. Important: the difference delivers highly valued benefit for buyers. Distinctive: competitor does not offer the dfference Superior: the difference is superior to other ways that customers might obtain the same benefit. Communicable: difference is communicable and visable Preemptive: difference is not easy to copy Affordable: difference is affordable for buyer Profitable: the company can introduce the difference profitable.

Geographic segmentation

Calls for dividing the market into different geographical units, such as nations, regions etc. Many companies today are localising their products, services, advertising, promotion and sales efforts to fit the needs of individual regions, cities etc.

Choosing a target strategy

Companies need to consider many factors when choosing a market-targeting strategy. -> the best depends on many resources: The degree of product variability The product's life-cycle stage Market variability Competitor's marketing strategies

Segmenting business market

Consumer and business marketers use many of the same variables to segments their markets. Business marketers also use some additional variables, such as operating characteristics, purchasing approaches, situational factors, and personal characteristics. Almost every company serves at least some business markets. For example a food markets. Many companies establish separate systems for dealing with larger on multiple-location customers.

Behavioural segmentation

Devides buyers into segments based on their knowledge, attitudes, uses or responses concerning a product. Occasional segmentation: dividing the market into segments according to occasions when they get the idea to actually make their purchase, or use the purchased item. Benefits segmentation: dividing the market into segments according to the different benefits that consumers seek from the products. -> requires finding the major benefits people look for in a product, and who look for the benefit, and the major brands that deliver each benefit. User status: markets can be segmented into nonusers, ex-users, potential users, first time users, and regular users of a product. Marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users. Usage rate: markets can also be segmented into light, medium, and heavy product users. Loyalty status: a market can also be segmented by consumer loyalty. Consumers can be loyal to brands, stores, and companies. Buyers can be divided into groups according their degree of loyalty. Some are completely loyal, somewhat loyal (favour on to three brands or favour one and sometimes buy another.) or not loyal. A company should study its own loyal customers.

Demographic segmentation

Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity and generation. Consumer needs and wants etc often vary closely with demographic variables. Demographic variables are easier to measure. -> age and life-cycle stage: dividing a market into different age and life-cycle groups. Some brands target specific age or life stage groups. Marketers must be careful to guard against stereotypes when using age and life-cycle segmentation. age is often poor predictor of a person's life cycle, health, work or family status, needs and buying power. Gender segmentation has long been used in marketing clothing, cosmetics, toys etc. Income segmentation: dividing the market into different income segment. -> long been used by services and products such as cars, clothing, cosmetic, financial services. Many luxury goods or budget stores

Using multiple segmentation bases

Marketers often use multiple segmentation bases in an effort to identify smaller, better defined groups. Several business information services provide multivariable segmentation systems that merge geographic, demographic, lifestyle and behavioural data to help companies segment their markets. One leading consumer segmentation system is Experian's Mosaic USA system. It classifies U.S. households in 71 lifestyle segments and 19 levels of affluence based on specific consumer demographics, interests, behaviours and passions.

Customer-driven marketing strategy

Most companies have moved away from mass marketing and toward target marketing: identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. In the first two steps of the customer-driven marketing strategy, the company selects the customers that it will serve. Marketing segmentation: dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviour that might require separate marketing strategies or mixes Market targeting: evaluating each market segment's attractiveness and selecting one or more segments to enter. In the final two steps -> decision on value proposition Differentiation: differentiating the market offering to create superior customer value. Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Segmenting international markets

Operating in many countries brings challenges. Different countries, even those that are close together, can vary greatly in their economic, cultural, and political makeup. -> international firms need to group their world markets into segments with distinct buying needs and behaviours. Companies can segment international markets using one or a combination of severall variables. -> geographic location: countries, regions etc. World markets can also be segmented based on economic factors. Countries might be grouped by population income levels or by their overall level of economic development.-> shapes needs of population and therefore the marketing opportunities. Countries can also be segmented by political and legal factors-> government, receptivity to foreign firms, regulations, amount of bureaucracy. Cultural factors can also be used. Common language, religion, values, attitudes, etc. Intermarket segmentation: forming segments of consumers who have similar needs and buying behaviours even though they are located in different countries.

Communicating and delivering the chosen position

Positioning the company calls for concrete action, not just talk. If the company decides to build a position on better quality and service, it must first deliver that position. Companies often find it easier to come up with good positioning strategy than to implement it.

Psychographic segmentation

Psychographic segmentation divides buyer into different segments based on social class, lifestyle, or personality characteristics. Products that people buy reflect their lifestyles. As a result, marketers often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals. Marketers also use personality variables to segments markets. Marketers sometimes refer to brand-focused psychographic segments as 'brand tribes' -> communities with core customers with shared characteristics, brand experiences and strong affinities for a particular brand.

Socially responsible target marketing

Smart Targeting helps companies to choose the best segment. However, target marketing sometimes generates controversy and concern. Biggest issues usually involve the targeting of vulnerable or disadvantaged consumers with controversial or potentially harmful products. Children are seen as especially vulnerable audience. Critics worry that enticing premium offers and high-powered advertising appeals will overwhelm children's. The digital era may make children even more vulnerable to targeted marketing messages. -> marketing in digital media may be subtly embedded within the content and viewed by children on personal, small screens that are beyond the parent's eyes. There are a lot of concerns about targeting via online media. Also concerns about tracking consumers. Though, most attempts to target these vulnerable segments provide benefits for the targeted consumer. In target marketing the issue is not really who is targeted but rather how and for what.

Selecting an overall positioning strategy

The full positioning of a brand I called the brand's value proposition -> the ful mix of benefits on which a brand is differentiated and positioned. There are five winning value propositions: More for more: involves providing the most upscale product or service and charging a higher price to cover the higher costs. Think of rolex, Mercedes, starbucks etc. this strategy ca be risky-> often imitators and risk during economic downturns More for the same: a company can a competitor's value proposition by positioning its brand as offering more for the same price The same for less: offering the same for less can be powerfull -> everyone likes a good deal -> Amazon's kindle tablet instead of Samsung tablet or Ipad. Less for less: offer less for less money -> such as instead of a hotel a bed and breakfast or just hiring a bed in a motel. Less for much less: meeting customers lower performance ir quality requirements at a much lower price. More for less: many company's claim to do this-> work out in the short run but not long term.-> offering more costs more.

Requirements for effective segmentation

There are many ways to segment a market, but not all segmentations are effective. To be useful they must be: Measurable: the size, purchasing power, etc. Accessible: market segments can be effectively reached and served. Substantial: market segments are large and profitable enough to serve. Differentiable: the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. Actionable: effective programs can be designed for attracting and serving the segments.

Identifying possible value differences and competitive advatages

To the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage. If a company positions its product as offering the best quality and service, it must actually differentiate the product so that it delivers the promised quality and service. It can differentiate along the lines of product, services, channels, people or image. Through product differentiation: brands can be differentiated on features, performance, or style and design Service differentiation through speedy, convenient or careful delivery. Channel differentiation through their channel's coverage, expertise and performance People differentiation through hiring and training better people than their competitors do. Image differentiation-> a company or brand image should convey a product's distinctive benefits and positioning. The chosen symbols, characters, and other image elements must be communicated through advertising that conveys the company's or brand's personality.

Differentiating and positioning

Value proposition: how it will create a differentiated value for targeted segments and what positions it wants to occupy in those segments. Product position: the way a product is defined by the consumer on important attributes -> the place the product occupies in consumers' minds relative to competing products. To simplify the buying process, consumers organise products etc. in categories and "position" them. Marketers must plan positions that will give their products the greatest advantage in selected target markets, and they must design marketing mixes to create these planned positions.

Evaluating market segments

in evaluating different market segments, a firm must look at three factors: Segment size and growth: company needs to select segment right size and growth. -> smaller company may target smaller/ less attractive segments that are potentially more profitable for them. Segment structural attractiveness: a segment is less attractive when: many strong/ aggressive competitors; easy for new entrants; existence many substitute products -> limit price and profits; the relative power of buyers; powerful suppliers that can control prices. Company's objectives and resources: a company should only enter a segment in which it can create superior customer value ad gain advantages over its competitors.

Positioning map

in planning their differentiation and positioning strategies, marketers must often prepare a perceptual positioning map. -> show consumer perceptions of their brands versus those of competing products on important buying dimensions.

Segmenting consumer markets

there are many ways to segment a market and a marketer has to find the best way to view market structure. The major variables that might be used in segmenting markets are: Geographic, Demographic Psychographic, Behavioural.