Textbook Notes (362,796)
Canada (158,054)
Commerce (580)
COMM 131 (63)
Prof. (7)

COMM 131 Sessions 5-6 Textbook Notes

8 Pages
Unlock Document

Queen's University
COMM 131

WEEK 3 Chapter 7 Pg. 258-276 Market Targeting -evaluate each segment and decide how many and which segments it can serve best Evaluating Market Segments: 3 factors to evaluatesegment size and growth, segment structural attractiveness, and company objectives and resources -interested in the segment with the right size and growth characteristics -‘right size and growth’ is relativelargest and fastest-growing segments aren’t always the most attractive ones for every company; not compatible with resources, skills, etc. -examine major structural factors that affect long-run segment attractiveness (i.e. number and aggressiveness of competitors) -existence of actual or potential substitute products may limit prices and the profits that can be earned in a segment -the relative power of buyers also affects segment attractiveness -strong bargaining power=certain price control, stronger service demands, and more aware of competitors’ benefits -segment may be less attractive if it contains powerful suppliers who can control prices/reduce the quality or quantity of ordered goods/services -if it’s the right size and growth, with attractive structure, company must evaluate the company’s resources and objectivesmay be abandoned if they do not mesh with the long- term objectives of the company Selecting Target Market Segments: decide which and how many segments to target -target market: set of buyers who share common needs or characteristics that the company decides to serve -undifferentiated marketing/mass-marketing: ignore market segment differences and target the whole market with one offerfocuses on what is common in needs than what is different -can market target at various levels; 3 levels 1. Differentiated Marketing: decides to target several market segments and designs separate offers for each -offering variations to segments, hopes for higher sales and stronger position within each market segment -stronger position within several segments=more total sales than undifferentiated marketing -differentiated marketing=higher cost of doing business -developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion and planning, and channel management -company must weigh increased sales against increased costs when deciding on a differentiated marketing strategy 2. Concentrated Marketing: instead of going after a small share of a large market, the firm goes after a large share of one or a few smaller segments or niches -achieves a strong market position because of its greater knowledge of consumer needs in the niches and the special reputation it acquires -market more effectively by fine-tuning to the needs of carefully defined segments -market more efficiently by targeting only consumers who are profitable -niche markets normally attract only one or two competitors; smaller companies can focus on their limited resources on serving small groups who may be overlooked by larger competitors -many companies start as niche marketer to get a foothold against larger competitors and then grow into broader competitors -as markets change, some mega-marketers develop niche products to create sales growth 3. Micromarketing: tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments -differentiate and concentrated marketers use this; do not go as far as to customize their offers to each individual customer -consists of: 1. Local marketing: tailoring brands and promotions to the needs and wants of a small group of people in the same geographical region or shop at the same store. -practised by convenience stores, etc. -drawbacks: drive up manufacturing and marketing costs by reducing economies of scale, create logistics problems from meeting various requirements of different regions, brand image may be diluted due to variations in various areas. -as new tech, advantages often outweigh drawbacks -meets the needs of the company’s first-line customer 2. Individual Marketing/Mass Customization: in the extreme, tailoring products and marketing programs to the needs and preferences of individual customers -eliminates the need for human interaction, mass customization has made relationships with customers is important Choosing a Targeting Strategy: the best strategy depends on company resources, product variability and product’s life-cycle stage, market variability, and competitors’ marketing strategies. Socially Responsible Target Marketing -target marketing helps company’s efficient and effective, and benefit specific groups of consumers -generate controversy/concern: targeting of vulnerable or disadvantaged consumers or potentially harmful products -issue is not in who is targeted but rather how and for what -controversies arise when marketers attempt to profit at the expense of targeted segments and socially responsible marketing calls for segmentation and targeting that serve not just the interests of the company but also the interests of those targeted Differentiation and Posting -company must decide the value proposition of its products, how to create differentiated value for targeted segments and what positions it wants to occupy -product position: the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products -consumers are overloaded with info; they can’t evaluate products every time they make a buying decision -consumers organize products, services and companies into categories and ‘positions’ in their minds, based on their perceptions, impressions and feelings compared to competing productsthey do so without the help of marketers -marketers must therefore plan positions that will give them the greatest advantage Positioning Maps -perceptual positioning maps prepared to show consumer perceptions of their brands versus competing products on important buying dimensions Choosing a Differentiation and Positioning Strategy -differentiation and positioning task consists of 3 steps: identifying a set of differentiating competitive advantages for advantage, choosing the right competitive advantage, and selecting an overall positioning strategy. Identifying Possible Value Differences and Competitive Advantages: to the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage -if a company’s position its product as offering the best quality/service, it must actually differentiate the product so that it delivers the promised quality/service -finding points of differentiation: think through customer’s entire experience, find ways to differentiate at every point of contact with the customersproducts/services, channels, people, image, etc. -product differentiation on features, performance, or style and design, services that accompany the product (i.e. speed, convenience, careful delivery, etc.) -Channel differentiation: advantage in coverage, expertise, and performance -people differentiation: hiring and training better people than the competitors -image differentiation: convey the product’s distinctive benefits and positioningcreativity and hard work Choosing the Right Competitive Advantages: chose one that builds its positioning strategyhow many differences to promote and which ones HOW MANY DIFFERENCES TO PROMOTE: company should develop a unique selling proposition for each brand and stick to it. -each brand should pick an attribute and build to be number 1 on that attribute because consumers tend to remember #1. WHICH DIFFERENCES TO PROMOTE: each difference has potential to create company costs as well as customer benefits -worth establishing: importance, distinctive, superior, communicable, pre-emptive, affordable, and profitable. SELECTING AN OVERALL POSITIONING STRATEGY: full positioning of a brand is value proposition—full mix of benefits where the brand is differentiated and positioned Price Benefits More The Same Less More More for more More for the same More for less The Same (losing value proposit(marginal proposition)The same for less Less (losing value proposit(losing value propositLess for much less The 5 winning value propositions: 1. More for More: providing upscale product or service and charging a higher price to cover the higher cost; offers prestige to the buyer -often the price differences exceed the actual increment in quality -sellers offering ‘only the best’ can be found in every category -companies should lookout for opportunities to introduce a more-for-more brand in any underdeveloped product or service category -can still be vulnerable; invite imitators who claim the same quality at a lower price -luxury products may suffer in economic downturns 2. More for the Same: introducing a brand offering comparable quality (to more for more) at a lower price 3. The Same for Less: powerful value proposition; good deals by offering items at a deep discount based on superior purchasing power and lower-cost operations 4. Less for Much Less: market almost always exist for products that offer less, therefore costing less -few people need/want/can afford the very best and would settle for less than optimal performance in exchange for a lower price -meets consumers’ lower performance or quality requirements at a much lower price 5. More for Less: winning value proposition and can be achieved in the short run -difficult to sustain in the long run—offering more usually costs more, making it difficult to deliver ‘for less’ -may end up losing out to competitors Developing a Positioning Statement: Form: To (target segment and need) our (brand) is (concept) that (poi
More Less

Related notes for COMM 131

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.