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Marketing Strategy

Market Segmentation and Target Strategy

A market consists of people or organizations with wants,money to spend,and the willingness to spend it.However,within most markets the buyer' needs are not identical.Therefore,a single marketing program starts with identifying the differences that exist within a market,a process called market segmentation, and deciding which segments will be pursued ads target markets.

Marketing segmentation enables a company to make more efficient use of its marketing resources.Also,it allows a small company to compete effectively by concentrating on one or two segments.The apparent drawback of market segmentation is that it will result in higher production and marketing costs than a one-product,mass-market strategy.However, if the market is correctly segmented,the better fit with customers' needs will actually result in greater efficiency.

The three alternative strategies for selecting a target market are market aggregation,single segment,and multiple segment.Market-aggregation strategy involves using one marketing mix to reach a mass,undifferentiated market.With a single-segment strategy, a company still uses only one marketing mix,but it is directed at only one segment of the total market.A multiple-segment strategy entails selecting two or more segments and developing a separate marketing mix to reach segment. Positioning the Product

Management's ability to bring attention to a product and to differentiate it in a favorable way from similar products goes a long way toward determining that product's revenues.Thus management needs to engage in positioning,which means developing the image that a product projects in relation to competitive products and to the firm's other products.

Marketing executives can choose from a variety of positioning strategies.Sometimes they decide to use more than one for a particular product.Here are several major positioning strategies:

1.Positioning in Relation to a competitor

For some products,the best position is directly against the competition.This strategy is especially suitable for a firm that already has a solid differential advantage or is trying to solidify such an advantage.To fend off rival markers of microprocessors,Intel Corp.launched a campaign to convince buyers that its product is superior to competitors.The company even paid computer makers to include the slogan,\Inside\in their ads.As the market leader,Coca-Cola introduces new products and executes its marketing strategies.At the same time,it keeps an eye on Pepsi-Cola,being sure to match any clever,effective marketing moves made by its primary competitor.

2.Positioning in Relation to a Product Class or Attribute

Sometimes a company's positioning strategy entails associating its product with(or distancing it from)a product class or attributes.Some companies try to place their products in a desirable class,such as\in the USA.\the words of one consultant,\is a strong emotional appeal when you say,'Made in the USA'\a small sportswear manufacturer,Boston Preparatory Co.is using this positioning strategy to seek an edge over large competitors such as Calvin Klein and Tommy Hilfiger,which don't produce all of their products in the U.S..

3.Positioning by Price and Quality

Certain producer and retailers are known for their high-quality products and high prices.In the retailing field,Sake Fifth Avenue and Neiman Marcus are positioned at one end of the price-quality continuum.Discount stores such as Target and Kmart are at the other.We're not saying,however,that discounters ignore quality;rather, they stress low prices.Penney's tired—and for the most part succeeded in—repositioning its stores on the price-quality continuum by upgrading apparel lines and stressing designer names.

The word brands is comprehensive;it encompasses other narrower terms.A brand is a name and/or mark intended to identify the product of one seller or group of sellers and differentiate the product from competing products.

A brand name consists of words,letters,and/or numbers that can be vocalized.A brand mark is the part of the brand that appears in the form of a symbol, design,or distinctive color or lettering.A brand mark is recognized buy sight bu cannot be expressed when a person pronounces the brand name.Crest,Coors,and rider for Ralph

Lauren's Polo Brand.Green Giant(canned and frozen vegetable products)and Arm&Hammer(baking soda)are both brand names and brand marks.

A trademark is a brand that has been adopted by a seller and given legal protection.A trademark includes not just the brand mark,as many people believe,but also the brand name.The Lanham Act of 1946 permits firms to register trademarks with the federal government to protect them from use or misuse by other companies.The Trademark Law Revision Act,which took effect in 1989,is tended to strengthen the the registration system to the benefit of U.S. Firms.

For sellers,brands can be promoted.They are easily recognized when displayed in a store or included in advertising.Branding reduces price comparisons.Because brands are another factor that needs to be considered in comparing different products,branding reduces the likelihood of purchase decision based solely on price.The reputation of a brand also influences customer loyalty among buyers of services as Pricing

Pricing is a dynamic process,Companies design a pricing structure that covers all their products.They change this structure over time and adjust it to account for different customers and situations.

Pricing strategies usually change as a product passes through its life cycle.Marketers face important choice when they select new product pricing strategies.The company can decide on one of several price-quality strategies for introducing an imitative product.In pricing innovative products,it can practice market-skimming pricing by initially setting high prices to\maximum amount of revenue from various segments of the market.Or it can use market penetration pricing by setting a low initial price to win a large market share.

Companies apply a variety of price-adjustment strategies to account for differences in consumer segments and situations.One is discount and allowance pricing,whereby the company decides on quantity,functional,or seasonal discounts,or varying types of allowances. A second strategy is segmented pricing, where the company sellers a product at two or more prices to allow for differences in customers, products, or locations. Sometimes companies consider more than economics in their pricing decisions,and use psychological pricing to communicate about the product's

well as customer goods.Finally,branding can differentiate

commodities(Sunkist oranges,Morton salt,and Domino sugar,for example).

quality or value.In promotional pricing,companies temporarily sell their product bellow list price as a special-event to draw more customers,sometimes even selling below cost.With value pricing, the company offers just the night combination of quality and good service at a fair price. Another approach is geographical pricing, whereby the company decides how to price distant customers, choosing from alternative as FOB pricing,uniform delivered pricing, zone pricing, basing-point pricing, and freight-absorption pricing. Finally, international pricing means that the

company adjusts its price to meet different world markets. Distribution Channels

Most producers use intermediaries to bring their products to market.They try to forge a distribution channel—a set of interdependent organizations involved in the process of marking a product or service available for use or consumption by the consumers or business user.

Why do producers give some of the selling job to intermediaries?After all,doing so means giving up some control over how and to whom the products are sold.The use of intermediaries results from their greater efficiency in marking goods available to target markets.Through their contacts, experience, specialization, and scales of operation,intermediaries usually offer the firm move value than it can achieve on its own efforts.

A distribution channel moves goods from producers to customers.It overcomes the major time, place, and possession gaps that separate goods and services from those who would use them. Members of the marketing channel perform many functions. Some help to complete transactions:

1.Information. 2.Promotion.

3.Contact:finding and communicating with prospective buyers.

4.Matching:fitting the offer to the buyer's needs, including such activities as manufacturing and packaging.

5.Negotiation:reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.Other help to fulfill the completed transferred.

1.Transporting and storing goods. 2.Financing.