Market Segmentation Strategies
Marketing & Other Functions
Marketing interacts with other business functions:
Purchasing: Raw materials, packaging
R&D: New product development
Manufacturing: Inventory, production
Accounting: Product costing, pricing
Finance: Promo budgets, cash flow
Top Management: Brand planning, SBUs
Marketing Strategy
Key elements: Segmentation, USP, Positioning, Differentiation, Products, Promotion, Place, Price, Customers, Competition, Collaborators, Company Analysis, Research, Strategic Planning, Implementation, Context.
Strategic Leverage Triangulation
Considers customer needs, drivers of choice, core competencies, competitive advantages & vulnerabilities.
STP (Segmenting, Targeting, and Positioning)
Segmentation: Identify bases, develop segment profiles.
Targeting: Measure attractiveness, select segments.
Positioning: Develop positioning & marketing mix for each segment.
Four Key Steps to Marketing Strategy
Define the Market
Segment the Market, Choose attractive segments
Position offering
Design a Marketing Mix to Appeal to the Target Segment(s)
Define the Market
Determine who is likely to buy the product and who is not
Customer Orientation
Marketing Philosophy emphasizing the customer.
Examples:
Lou Gerstner (ex-Chairman IBM) :“I came here with a view that you start the day with customers, that you start thinking about a company around its customers”
Jack Welch (ex-CEO, G.E.):“Stop being a company with its face towards the CEO and back towards the customer”
Steve Jobs (Jandali): “ Get closer to your customers. So close, in fact, that you tell them what they need well before they realize it themselves”
Jeff Bezos (Former CEO, Amazon) : “. . .we start with customers, figure out what they want, and figure out how to get it to them.”
Ethnography
Ethnography: Walking In Their Shoes (W.I.T.S.) Study
Live, Analyze, Market
Cut the Market, Choose Segments
Determine who can delight customers better than competitors.
Select target segments.