Chapter 10: The Marketing Challenge
Most people think it refers to the development and delivery of an advertising campaign
o Just last step in the dvlpmt & delivery of marketing strategy – begins way before
Broader process about assessing market dynamics, identifying needs, determine sale price
Also includes ensuring customers have access to the p/s through dvlpmt of distribution
channels, & delivering the message to create awareness and preference for the p/s
In its simplest context, marketing’s purpose is to design, develop, and communicate value
o Value refers to ability of an org to communicate why their p/s meets their needs
Two fundamental principle associated with consumer behaviour to highlight the
importance of this value based approach to understanding the purpose of marketing
1. Customers don’t buy p/s…they buy solutions to problems or needs
2. Customers will not pay for a product if they can get a similar one for less money
The greater the ability an org has to deliver solutions to consumers’ problems which are
interpreted to be higher quality, uniqueness, enhanced importance, or convenience, the
greater the p/s’s value becomes to these consumers compared to competitor’s p/s
o This perceived value is really what differentiates two company’s p/s
o It is what causes customer loyalty and commitment
Value Proposition (tangibles + intangibles) is what creates the value of the p/s
Marketing – It’s Link to Strategy
Marketing is a critical component associated with the successful execution of an org’s
strategy & is largely perceived as the link between an org & its marketplace
o Marketing is fundamentally responsible for connecting customers & p/s, and
reinforcing the needs and desires which are being satisfied
Must understand the six R’s or marketing
o The Right Need to pursue, the Right Solution to offer, the Right Value
Proposition to position the org’s products and services around, the Right
Methodology for Delivery, the Right Price to Charge, and the Right
Communication Method to use
Core Challenges of Marketing
1. Do we understand out targeted customers’ needs and desires?
2. Do we believe that our current/anticipated p/s represents a good solution to the targeted
customers’ needs and/or desires?
3. Can we create a value prop which positions our p/s as the best solution for customers?
4. Is there an existing/potential viable distribution model for delivering our p/s in a manner
which effectively reaches out targeted customers?
5. Can we support the p/s and its delivery to the marketplace at a price point which is
attractive to the targeted customer and which allows us to be profitable?
6. Can we develop & deliver a message which will attract these buyers to our p/s? The Marketing Formula and Marketing’s Impact on Strategy
To be successful in the execution of its overall corporate strategy, an organization must
be successful at both the product strategy level and the business strategy level.
Properly positioned products, combined with a superior (in terms of effectiveness)
marketing effort, lead to organizational profitability and growth.
o In turn, this leads to the achievement of p/s objectives which support the
achievement of business objectives and ultimately the original objectives and the
company’s overall vision and mission
The Concept of Positioning – pg 320 “Positioning to Win”
Positioning is a key fundamental associated with the development of an org’s business
strategy and how it will position its brand and p/s in the marketplace
o In order to execute a successful marketing strategy, a mgnt team must establish an
effective and well-defined market position
Positioning: The ability of an org to develop a unique, credible, sustainable, and valued
place in the minds of customers, for its brand, products and/or services
o It’s how you distinguish yourself from the completion – usually built around prod
features/attributes, functional/emotional benefits, or cultural values – Value Prop.
When customers are trying so solve a need, want them to think of you first – Top of Mind
A key requirement associated with effective positioning is the dvlpmt & validation of
marketing research relating to both market dynamics and customer needs
o Analysis about competitors, customers, potential market segments, and internal
competencies to determine how the org will position its brand, prod and/or servs
Segmentation and Target Marketing
Cannot sell all things to all people because that results in creating a standardized product
that does not meet the needs/expectations of anyone in the market
So, successful marketers try to focus on identifying particular segments within the market
and align their value proposition with that specific segment and meet their specific needs
o Divide the market into notably specific consumer segments pick which
segment that you want to target (target market) and align everything towards them
Market Research – A First Step in the Segmentation Process
It is critical to use market research to understand the needs which current and potential
customers have, and then delivering on these needs, and doing it better than competitors
Segmentation: Determining the best way to divide the market in a manner which will
result in a better understanding of potential customer needs, interests, preferences,
attitudes, and behaviours
o This is generally done through primary and secondary research Primary Research
Information sources which an org develops and/or utilizes to generate information
specific to the org and/or the p/s which it offers Ex, surveys, focus groups…
Firms, or a hired marketing firm, goes out and collects data for the own company - they
collect it themselves - expensive; directly relates to what the org needs from its research
Information sources focus on conducting research of, and drawing conclusions from,
information which has already been conducted by some other company for some other
purpose - available for a small fee Ex. Stats Can, results from other firms’ research…
o Because this research is already conducted it will likely not directly relate to
another firm’s problem – firm’s use it because it is cheaper than primary research
In tying market research to segmentation, marketers and managers strive to create a
profile of the customers within the various segments identified in the market
Developed around four core characteristics
o Demographics – Age, gender, income, race, etc.
o Geographic Clustering – location, reach, etc.
o Psychographics – lifestyle, status, ego, emotion, tastes, trends, etc.
o Behavioral – use, buying patterns, etc.
Info used to decide who to target & in answering to 3 q’s that drive marketing effort
1. What are the key decision criteria, which potential/existing customers use in
determining which p/s they will buy?
2. Given these criteria above, what is the priority/ranking of these criteria? Is there
one that will predominantly influence the purchase decision?
3. How can we best position our p/s to align closely to meeting these key decision
criteria used by our desired customer base when measured against competitors?
Transitioning Segmentation Analysis to Target Marketing
Utilizing marketing research to assist in better understanding the marketplace and how it
is segmented enables marketers and managers to determine which segments are the most
attractive recipients to the marketing message which the org intends to convey
Target Marketing is leveraging the information acquired during the research and
segmentation process and determining which segment(s) to sell to
By defining these targets, the org can develop its value prop around those decision
criteria which the customer values most, thereby tailoring the product to them directly
Target marketing recognizes that not everyone who is aware of the product has the desire,
ability, or willingness to purchase the good – this is a small percentage of the market
T.M. allows firms to focus on those potential customers that are most likely to buy goods
o Firms can concentrate their marketing resources to reach these consumers
Segmentation defines level of need, target marketing defines those most willing to pay Marketing’s Challenge
Focuses on assessing opportunities existing within the market for our current/potential p/s
It means attempting to identify untapped or unmet needs within the marketplace and
leveraging R&D capabilities to develop products/services which will meet such needs
o Have to look at current portfolio and decide where opportunities exist
Also takes into consideration whether emphasis should be placed on new customer
acquisition, further leveraging relationships with existing customers, or a combination
Need to assess the market in two fundamental ways
o Where do opportunities exist?
o What market dynamics present themselves in