by Opportunity Analysis
- A careful analysis of the marketplace should lead to alternative market opportunities for existing product lines in current or new markets, new products for current markets, or new products for new markets
- Market opportunities are areas where there are favourable demand trends, where the company believes customer needs and opportunities are not being satisfied, and where it can compete effectively.
Competitive Analysis
- In developing the firm’s marketing strategies and plans for its products and services, the manager must carefully analyse the competition to be faced in the marketplace. For example, recently the U.S. market has seen significant growth in the high-end luxury market, with more consumers spending more of their money on luxury goods than ever before. High-end products from Coach, Tiffany’s, and Ralph Lauren are all benefiting from this change in consumer spending habits.
- This may range from direct brand competition (which can also include its own brands) to more indirect forms of competition, such as product substitutes.
- An important aspect of marketing strategy development is the search for a competitive advantage, something special a firm does or has that gives it an edge over competitors.
Target Marketing
Identifying Markets
Target market identification isolates consumers with similar lifestyles, needs, and the like, and increases our knowledge of their specific requirements.
The more marketers can establish this common ground with consumers, the more effective they will be in addressing these requirements in their communications programs and informing and/or persuading potential consumers that the product or service offering will meet their needs.
Market Segmentation
Dividing up a market into distinct groups that have common needs and will respond similarly to a marketing process. The Process involves the following steps:
- Finding ways to group consumers according to their needs
- Finding ways to group the marketing actions—usually the products offered available to the organization
- Developing a market-product grid to relate the market segments to the firm’s products or actions
- Selecting the target segments toward which the firm directs its marketing actions
- Taking marketing actions to reach target segments
Market Positioning
Positioning has been defined as “the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.” Positioning strategies generally focus on either the consumer or the competition.
Developing a Positioning Strategy: To create a position for a product or service, managers must ask themselves six basic questions:
- What position, if any, do we already have in the prospect’s mind?
- What position do we want to own?
- What companies must be outgunned if we are to establish that position?
- Do we have enough marketing money to occupy and hold the position?
- Do we have the guts to stick with one consistent positioning strategy?
- Does our creative approach match our positioning strategy?
Developing the marketing planning program
The development of the marketing strategy and selection of a target markets tell the marketing department which customers to focus on and what needs to attempt to satisfy. The next stage of the marketing process involves combining the various elements of the marketing mix into a cohesive, effective marketing program. Each marketing-mix element is multidimensional and includes a number of decision areas. Likewise, each must consider and contribute to the overall IMC program.
Product decisions
An organization exists because it has some product, service, or idea to offer consumers, generally in exchange for money. This offering may come in the form of a physical product (such as a soft drink, pair of jeans, or car), a service (banking, airlines, or legal assistance), a cause (United Way, March of Dimes), or even a person (a political candidate). The product is anything that can be marketed and that, when used or supported, gives satisfaction to the individual. The term product symbolism refers to what a product or brand means to consumers and what they experience in purchasing and using it.
Price Decisions
The price variable refers to what the consumer must give up to purchase a product or service. While price is discussed in terms of the dollar amount exchanged for an item, the cost of a product to the consumer includes time, mental activity, and behavioural effort. From an IMC perspective, the price must be consistent with the perceptions of the product, as well as the communications strategy. Higher prices, of course, will communicate a higher product quality, while lower prices reflect bargain or “value” perceptions.
Distribution Channel Decisions
One of a marketer’s most important marketing decisions involves the way it makes its products and services available for purchase. A firm can have an excellent product at a great price, but it will be of little value unless it is available where the customer wants it, when the customer wants it, and with the proper support and service. Channel decisions involve selecting, managing, and motivating intermediaries such as wholesalers, distributors, brokers, and retailers that help a firm make a product or service available to customers. The distribution strategy should also take into consideration the communication objectives and the impact that the channel strategy will have on the IMC program.
Developing Promotional Strategies:
Promotion to the trade includes all the elements of the promotional mix. Company sales representatives call on resellers to explain the product, discuss the firm’s plans for building demand among ultimate consumers, and describe special programs being offered to the trade, such as introductory discounts, promotional allowances, and cooperative ad programs. The company may use trade advertising to interest wholesalers and retailers and motivate them to purchase its products for resale to their customers. Trade advertising usually appears in publications that serve the particular industry.
A push strategy tries to convince resellers they can make a profit on a manufacturer’s product and to encourage them to order the merchandise and push it through to their customers. Sometimes manufacturers face resistance from channel members who do not want to take on an additional product line or brand. In these cases, companies may turn to a promotional pull strategy, spending money on advertising and sales promotion efforts directed toward the ultimate consumer. The goal of a pull strategy is to create demand among consumers and encourage them to request the product from the retailer. Seeing the consumer demand, retailers will order the product from wholesalers which in turn will request it from the manufacturer. Thus, stimulating demand at the end-user level pulls the product through the channels of distribution.
Role of Advertising and Promotion
Marketers use the various promotional-mix elements; advertising, sales promotion, direct marketing, publicity/public relations, and personal selling to inform consumers about their products, their prices, and places where the products are available. Each promotional mix variable helps marketers achieve their promotional objectives, and all variables must work together to achieve an integrated marketing communications program. The development and implementation of an IMC program is based on a strong foundation that includes market analysis, target marketing and positioning, and coordination of the various marketing-mix elements.
