Marketing Assignment
Chapter No. 7
Question #1 Briefly describe the four steps in designing a customer
driven marketing strategy?
Instead of scattering their
marketing efforts, firms are now focusing on the buyers who have greatest in
the values they create best.
Below are four major steps in
designing a customer driven marketing strategy.
In the first two steps, the
company selects the customers it will serve.
Marketing segmentation: this step
involves dividing a market into smaller groups of buyers with distinct needs,
characteristics, or behaviors that might require separate marketing strategies
or mixes. The company identifies different ways to segment the market and
develops profile of the resulting market segments.
Market targeting: targeting
consists of evaluating each market segment’s attractiveness and selecting one
or more marketing segments to enter.
In the final two steps, the
company decides upon a value proposition, on how it will create value for
target customers.
Differentiation: it involves actually
differentiating firm’s marketing offering to create superior customer value
Positioning : positioning consists
of arranging for a market offering to occupy a clear, distinctive and desirable
place relative to competing products in the minds of targeted customers.
Question #2 Name and describe the
four major sets of variables that might be used in segmenting consumer markets.
Which segmenting variables do you think Pizza hut is using?
There is no single way to segment
a market. A marketer has to try different segmentation variables alone and in
combination, to find the best characteristics affecting consumer behavior
Here are some major geographic,
demographic, psychographic and behavioral variables.
Geographic Segment
This segment calls for dividing the
market into different geographical units such as in one or a few geographical
areas or to operate in all areas but pay attention to geographical difference
in needs and wants.
Many companies are today are
localizing their products, advertising, promotion and sales efforts to fit the
needs of individual region, cities and even neighborhoods.
For example, most of Pizza hut
branches are located in posh areas and we could not find any Pizza hut branch
in Orangi Town or Lyari.
Demographic segmentation
This segment divides the market
into groups based on variables such as gender, family size, family life cycle,
income, occupation, education, religion, race, generation and nationality.
Demographic factors are the most popular bases for segmenting customer groups.
One reason is that consumer needs, wants and usage rates often vary closely
with demographic variables. Another is that demographic variables are easier to
measure than most other types of variables. Even when marketers first define
segments using other bases, such as benefit sought or behavior, they must know
segment demographic characteristics in order to assess the size of the target
market and to reach it efficiently.
For example, Piazza hut targets
younger lot and offered variety of delicious piazza with multiple choices of
topping that make Piazza most favorite food for younger generation.
Behavior Segment
Behavior segments divides buyer
into group based on their knowledge, attitudes, uses or responses to a product.
Many marketers believe that behavior variables are the best starting point for
building market segments.
Occasion
Buyers can be grouped according to
occasions when they get the idea to buy, actually make their purchase, or use
the purchased item. Occasion segmentation can help firms build up product
usage.
For example, Piazza hut introduce
their ‘eat for all’ campaign in the month of Ramazan to attract maximum number
of customer in this month. Similarly Piazza hut also offer different packages
on occasion such as birth day celebration and make special arrangements on
Valentine day.
Benefit Sought
A powerful form of segmentation is
to group buyers according to different benefits that they seek from the
product. It requires finding the major benefits people look for in the product
class, the kinds of people who look for each benefit and the major brands that
deliver each benefit.
For example: Piazza hut introduces
‘Mid-Night deal’ during this timing all
of their products are sold at 50% off rates, this is a good opportunity for
that kind of people who seek economical benefits in product.
Psychographic segment
This segment divides buyers into
different groups based on social class, life style, or personality
characteristic. People in the same demographic group can have very different
psychographic makups.
For example: Piazza hut targets a
particular social class and once visiting Piazza hut used to considered as a
part of luxurious life style.
Question #4 Compare and contrast undifferentiated, differentiated,
concentrated, micromarketing targeting strategies, which strategy is best?
The company must decide which and
how many segments it will target. A target market consists of a set of buyers
who share common needs or characteristics that the company decides to serve.
Market target can be carried out at several different levels, companies can
target very broadly (undifferentiated marketing), very narrowly
(micromarketing) or some where in between (differentiated or concentrated
marketing)
Undifferentiated marketing
Using undifferentiated marketing
or mass marketing, a firm might decide to ignore market segment differences and
target the whole market with one offer. This mass marketing strategy focuses on
what is common in the needs of consumer rather than on what is different. The
company designs a product and a marketing program that will appeal to the
largest number of buyers.
Most modern marketers have strong
doubts about this strategy. Difficulties arise in developing a product or brand
that will satisfy all consumers. Moreover mass marketers often have trouble
competing with more focused firms that do a better job of satisfying the needs
of specific segments and niches.
Differentiated Marketing
Using a differentiated marketing
(or segmented marketing) strategy, a firm decides to target several market
segments and designs separate offers for each. By offering product and
marketing variations to segments, companies hope for higher sales and a
stronger position within each market segment. Developing a strong positing
within several segments creates more total sales than undifferentiated
marketing across all segments.
But differentiated marketing also
increase the cost of doing business. A firm usually finds it more expensive to
develop and produce. Developing separate marketing plans for the separate
segments require more marketing research, forecasting, sales analysis,
promotion planning and channel management.. and trying to reach different
market segments with different advertising campaigns,
Concentrated marketing
Using a concentrated marketing
also increases, instead of going after small share of a large market, the firm
goes after a larger share of one or few smaller segments of niches. Yet the
smaller, upscale retailer is growing faster and more profitably than its giant
rivals.
Through concentrated marketing,
the firm achieves a strong market position because of the greater knowledge of
consumer needs in the niches it serves and the special reputation it acquires.
It can market more effectively by fine tuning its products, price and programs
to the needs of carefully defined segments. It can also market more
efficiently, targeting its products or services, channels and communication
programs toward only consumer that it can serve better and most profitable.
Whereas segments are fairly and
normally attract several competitors , niches are smaller and may attract only
one or a few competitors. Niching lets smaller companies focus their limited
resources on serving niches that may be unimportant or overloaded by larger
competitors. Many companies start as niches to get a foothold against larger,
more resourceful competitors then and then grow into broader competitors.
Micro marketing
Differentiated and concentrated
marketers tailor their offers and marketing programs to meet the needs of various
market segments and niches. At the same time, they don’t customize their offers
to each individual customer. Micro marketing is the practice of tailoring
products and marketing programs to suit the tastes of specific individuals and
locations. Rather than seeking a customer in every individual, micro marketers
see the individual in every customer. Micro marketing includes local marketing
and individual marketing.
Individual marketing
It involves tailoring brands and
promotions to the needs and wants of local customer groups, cities,
neighborhoods and specific stores.
Advancement of communication
technology have given rise to a new high tech version of location based
marketing. By coupling mobile phone services with GPS devices, many marketers
are now targeting customers wherever they are with what they want.
Individual marketing
In the extreme, micro marketing
becomes individual marketing, tailoring products and marketing programs to the
needs and preferences of individual customers. Individual marketing has also
been labeled one-to-one , mass customization and markets of one marketing.
After discussing different
marketing types, the best marketing strategy in my opinion is differentiate
marketing, because of some logical reasons, one of that is in this marketing type, marketer target
more than one segments and make products and marketing plan which suits
multiple segments which helps increase sales and a stronger position within
different segments.
Question # 5 what is products ‘position’ and how do marketers know what
it is?
The way the product is defined by
customers on important attributes, the place the product occupies in consumer
minds relative to competing products.
Consumers are overloaded with
information about products and services. Thy cannot reevaluate products every
time they make a buying decision. To simplify the buying process, consumer
organizes products or services and companies into categories and positions them
in their minds. A product position is the complex set of perceptions,
impressions, and feelings that customer has for the product with competing
products.
Below statement from positioning
experts clearly let us know what is positioning and it’s significance for them
“Products are created in
factories, but brands are created in the mind”
Question #6 Name and define the five winning value propositions,
describe in the chapter. Which value proposition describes big bazaar/Macro
Habib. Explain your answer.
The full positioning of a brand is
called the brand’s value proposition. The full mix of benefits upon which the
brand is differentiated and positioned. It is the answer to customer question
“why should I buy your product”/
Below are possible value
propositions upon which a company might position its products.
More for more
This positioning involves
providing the most upscale products or service and charging a higher price to
cover the higher cost. Not only is the market offering high in quality, it also
give prestige to the buyer. It symbolizes status and loftier life style. Often
the price difference exceeds the actual increment in quality.
More for the same
Companies can attack competitors
more-for more positioning by introducing a brand offering comparable quality
but at a lower price
The same for less
Offering “the same for less” can
be powerful value proposition, every one likes a good deal. Discount store such
as Big Bazar of India and Macro Habib in
Pakistan use this positioning . the don’t claim to offer different or better
products. Instead they many of the same brands as department stores specialty
stores but at deep discounts based on superior purchasing power and lower cost
operation. Other companies develop initiatives but lower-priced brands in an
effort to lure customers away from the market leaders.
Less for much less
A market always exists for
products that offer less and therefore cost less. Few people need, want or can
afford the very best in everything they buy. In many cases consumers will
gladly settle for less than optimal performance in exchange of lower price.
Less for much less positioning
involves meeting consumers lower performance or quality requirements at a much
lower price.
More for less
Off course, the winning
proposition would be to offer more for less. Many companies claim to do this.
And in the short run, some companies can actually achieve such lofty position.
Ye t in the long run companies will find it very difficult such best of both
positioning. Offering more usually cost more, making it difficult to deliver on
the “for less” promise. Companies that try to deliver both may loose out to
more focused competitors.
Question # Explain how marketers can segment international market.
Few companies have either
resources or will to operate in all or even most of the countries that dot the
global. Operating in many countries presents new challenges. Different
countries, even those that are close together can vary greatly in their
economic, cultural and political makeup. Thus, just as they do within their
domestic markets, international firms need to group their world markets into
segments with distinct buying needs and behaviors.
Companies can segment
international markets using one or more combination of several variables. They
can segment by geographic location, grouping countries by regions such as North
America, Western Europe, the pacific Rim, the Middle East, Asia or Africa.
Geographic segmentation assumes the nations close to each other will have many
common traits and behaviors. Although this is often the case, there are many
exceptions. For example, although United States and Canada have much in common,
both differ culturally and economically from neighboring Mexico. Even within a
region consumers can differ widely. For example, some US markets lump all
central and South American countries together. However, the Domican Republic is
no more like Brazil than Italy is like Sweden. Many
Central and South Americans don’t even speak Spanish.
World markets can also be
segmented on the basis of economic factors and countries might be grouped by
population income levels or by their overall level of economic development. A
country’s economic structure shapes its population’s product and service needs
and therefore the marketing opportunities it offers. Countries can be segmented
by political and legal factors such as the type and stability of Government,
receptivity of foreign firms, monetary regulations and amount of bureaucracy.
Cultural factors can also be used, grouping markets according to common
languages, religions, values and attitudes, customs and behavioral patterns.
Segmenting international markets
based on geographic, economic, political, cultural and other factors assumes
that segments should consist of clusters of countries. However, as new
communication technologies, such as satellite TV and the internet, connect
consumers around the world, marketers can define and reach segments of
like-minded consumers no matter where in the world they are. Using intemarket
segmentation (also called cross market segmentation) the form segments of
customers who have similar needs and buying behaviors even though they are
located in different countries.
3 comments:
Hi,
This is really great work. Thank you for sharing such a useful piece of information here in the blog.
thanks for sharing your wisdom with this newbie it is much appreciated!
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