BRANDING AND MARKET STRATEGY

Unit – 1.

Understanding marketing as strategy

A clear marketing strategy should revolve around the company’s value proposition, which
communicates to consumers what the company stands for, how it operates, and why it deserves
its business.

This provides marketing teams with a template that should inform their initiatives across all of
the company’s products and services. For example, Wal-Mart (WMT) is widely known as a
discount retailer with “everyday low prices,” whose business operations and marketing efforts
are rooted in that idea

 Marketing Strategies vs. Marketing Plans

The terms marketing plan and marketing strategy get mixed up sometimes, but they both play
important roles in achieving your marketing goals. Here's a breakdown of the key differences:

Marketing Strategy

 The "Why": A marketing strategy is the big-picture thinking behind your marketing efforts. It
defines your overall goals and outlines how you'll achieve a competitive advantage in the market.
 Key elements:
 Target audience: Who are you trying to reach?
 Value proposition: Why should they care about your product or service?
 Competitive analysis: Who are your competitors, and what sets you apart?

Marketing Plan

 The "How": A marketing plan is the actionable roadmap that translates your marketing strategy
into concrete steps. It outlines the tactics you'll use to reach your target audience and achieve
your goals.
 Key elements:
 Specific marketing channels (social media, email marketing, etc.)
 Content calendar
 Budget allocation
 Campaign timelines and milestones
 Metrics to track success

Analogy: Think of your marketing strategy as your destination (e.g., increasing brand
awareness), and your marketing plan as the roadmap that gets you there (e.g., social media
campaign, influencer marketing).

They work together: A strong marketing plan is built on a solid marketing strategy. Your
strategy provides the direction, and your plan details the execution. You'll likely have multiple
marketing strategies within your overall plan, each targeting specific goals or audience segments.
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The marketing strategy is outlined in the marketing plan—a document that details the specific
types of marketing activities that a company conducts and contains timetables for rolling out
various marketing initiatives.

Marketing strategies should ideally have longer life spans than individual marketing plans
because they contain value propositions and other key elements of a company’s brand, which
generally hold constant over the long haul. In other words, marketing strategies cover big-picture
messaging, while marketing plans delineate the logistical details of specific campaigns.

For example, a marketing strategy might say that a company aims to increase authority in niche
circles where their clients visit. The marketing plan puts that into action by commissioning
thought leadership pieces on LinkedIn.

 Steps involved in Understanding Marketing Strategy

1. Situation Analysis

Sound strategic planning begins before you even start mapping out the plan. You consider where
your company presently sits. Maybe your business meets revenue goals well enough, but you
want to scale up or delve into a new market. Or what if your business isn’t meeting its goals?
You need to make a brutally honest assessment of why the company is stalled. For example,
there is no marketing strategy in the world that can help you if your sales team, the heart that
pumps the lifeblood through the company, feels unmotivated or is poorly trained.

So, marketing strategy begins with getting your house in order through situation analysis. This
analysis also applies to product definition and how it relates to demographic specifics.

The majority of the info you need for this housekeeping can be found in your present business
plan and updated data reports. If it isn’t, it’s time to call in the SWOT team. SWOT stands for
strengths, weaknesses, opportunities, and threats. A meeting should be held so you can ferret out
any problems and take the proper steps toward a remedy. Be brutally honest about what doesn’t
work. Drop any false modesty about what does work and stand these two elements side by side
for a good, close examination. You and everyone in your business should be crystal clear on
makes your company, your people, and your product or service exceptional.

Another part of this initial housekeeping is determining dependencies and risks.

Outline potential risks right from the start. You want as clear a view in front of you as you can
get. Granted, not every “what if” can be predicted in any marketing strategy, no matter how well-
plotted. But every “what is” can.

So frankly assessing what is right in front of you and determining to best of your ability what
may be in store will give your business a big advantage in staying fleet of foot in adapting to
changes or shortcomings as they happen.
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2. Define the Ideal Customer

Sound marketing strategy means you must put in the time and effort to define your ideal
customer. Strategic planning must take into account age, gender, family/marital status, and
financial status. The consumer group you are after has many brands tugging at its wallet not just
yours.

When you have a well-strategized consumer profile mapped out, you have a framework that
allows you to define how your product or service solves a need or desire for those who fit that
profile.

3. Establish Marketing Goals

Here’s the bottom line when it comes to strategic planning. Marketing should lead to sales.
Period. When you don’t complicate the point of your marketing strategy, the focus becomes
laser-focused on how your efforts will improve revenue.

Likewise, marketing goals should be very specific, allowing you to accurately gauge the success
of your strategy. A time frame should be set, along with timeline markers to measure progress.
The markers help track that progress and enable you to react and adjust your strategy as needed.

4. Select Marketing Tools

Now you’ve assessed your company’s current situation, have an excellent bead on who your
target customer is, mapped out sound goals, and set up a working time frame to get you there.
Time for the next step in good marketing strategy: determining your marketing tactics.

There are many tactics, traditional and otherwise, that any strategic marketing planner worth
his/her salt knows how to customize and apply to your business.

Likewise, your strategic planner should determine the sweet spot when it comes to “touches.”

A touch is any element of marketing strategy that comes into direct contact with a potential
customer; a text, email, or direct mail.

Understanding how to utilize both cold and warm lead-generating techniques is equally
important. Social media advertising comes heavily into play here. This is because social media
can so accurately target specific demographics. It also allows for easy adjustments in ad
frequency.

5. Budgeting

Effective marketing strategy costs money and thinking you can get fantastic results on the cheap
is like expecting a 5-star dining experience at the drive-through window. When it comes to
strategy and tactical execution, you get what you pay for. No marketing strategy should turn
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black ink to red. You should expect value and results that increase your bottom line, not deplete
it. But a sound and realistic budget can be planned based on the 4 previous elements.

Your budget should have enough flexibility built in to allow for adjustments, and you want to
make sure to move money away from campaigns that don’t bear fruit.

But you do need to build in a timeline that allows your strategic planning to do its remarkable
magic. Remember that marketing strategy is a broad process that entails goals, objectives,
strategies, and tactics. It’s not an instant fix. Strategic planning is marketing that wins the long
game for your business.

6. Expect the Occasional Stumble

You should anticipate a shortfall here or there. All strategic planning has them, especially early
on as you shape and tweak your marketing strategy. So don’t let this panic you or take you by
surprise.

But when you have the first 5 elements well plotted and in place, these stumbles don’t spiral out
of control. Instead, they become invaluable input to use for making the right changes in direction
and adjustments to the original plan. They have their place as data in your ongoing
measurements and help steer your marketing strategy toward the desired results.

Ubiquity of marketing functions

In this age of Smartphone’s and Internet, it is hard not to notice ads and marketing mailers
whenever we are online. From the web pages that want to send us notifications to alert us to
breaking news and promotional mailers to the spam mail that routinely fills our inboxes,
marketing and advertising seems to be everywhere.

Ubiquitous Marketing refers to adapting and sharing your core marketing message across
multiple platforms for immediate access. Meaning, you want your business information to
be immediately and easily “findable” everywhere (or as many places as possible or relevant)
while retaining the same universal content despite the variety in medium.

The marketing function is truly ubiquitous in today's world. It permeates nearly every aspect of
our lives, from the products we buy to the content we consume. Here's why marketing is so
prevalent:

 Creating Demand: Marketing helps create awareness and interest in products and services. It
influences purchasing decisions by highlighting features, benefits, and the value proposition of a
product or service. Think about those catchy slogans or informative explainer videos you see -
they're all part of a marketing strategy.
 Building Relationships: Marketing fosters relationships between businesses and consumers. It
goes beyond just selling; it's about building trust and brand loyalty. Social media engagement,
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informative blog posts, and loyalty programs are all ways companies use marketing to build
relationships.
 Communication and Information: Marketing serves as a communication channel, informing
consumers about products and services. Whether it's a press release, a social media post, or a
customer service interaction, companies use marketing to communicate with their audience.
 Competition: In a competitive marketplace, marketing helps businesses differentiate themselves
and stand out from the crowd. Companies use marketing to highlight their unique selling
propositions (USPs) and convince consumers why they should choose them over the
competition.

 Why your marketing should be Ubiquitous

Data is ubiquitous. By nature, information exists. With smart phones, people can search for
information whenever they want, where ever they are. It’s an age of information! But just
because someone wants to find information about your business, doesn’t mean it exists where
they’re looking. You have to make it exist! You’re hurting yourself if people can’t find the
information they want about your business online. With the technological capability to search
for information instantly, you must make sure information about your small business is
accessible. Not to do so is a mistake. A missed opportunity.

Websites should be the ultimate trove of information, but many consumers use other platforms to
access information. Your business should not only have a website, but be accessible through a
variety of internet platforms. The more “internet realty” you possess, the greater your odds of
being noticed. If someone is looking for your business, you want them to be able to find you. To
do this, your marketing must be ubiquitous.

In today's digital age, consumers are bombarded with messages and choices. To stay relevant and
rise above the noise, your marketing needs to be ubiquitous. Here's why:

 Cut Through the Clutter: With so much competition vying for attention, ubiquitous marketing
increases the chances of your target audience encountering your message across various
touchpoints. Imagine seeing ads, social media posts, and blog articles about a new product all
within a short span - that's ubiquity at work!
 Brand Reinforcement: Repeated exposure to your brand through different channels strengthens
brand recognition and recall. The more people see your brand logo, messaging, or product
placements, the more familiar and trustworthy it becomes.
 Seamless Customer Journey: Ubiquitous marketing fosters a cohesive customer journey. By
strategically placing your message across different touchpoints (website, social media, physical
stores), you can guide consumers seamlessly through the buyer's funnel.
 Multiple Exposures Drive Action: Ubiquitous marketing increases the likelihood that potential
customers will not only remember your brand but also take action, whether it's visiting your
website, subscribing to a newsletter, or making a purchase.
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 Adaptability and Relevance: Reaching consumers across various channels allows you to tailor
your message to fit the specific platform and audience. This adaptability ensures your marketing
stays relevant and resonates with your target demographic.

However, ubiquity should not be confused with being intrusive.

The key is to be strategically present across relevant channels, delivering valuable content that
resonates with your audience and avoids overwhelming them with unnecessary messages.

Marketing Organization
The Marketing organization is the vehicle for making decisions on all marketing areas viz.
products, marketing channels, prices, physical distributions and promotions. It establishes the
authority relationships among marketing personals and specialists who are responsible for
making marketing decisions and planning that are essential for the success of any business firm.

Hence, we can say that marketing organization is an organizational structure which implements
the policies of the enterprise, helps in taking decisions regarding production, packing, price,
advertisement, sales promotion, brand, trade mark and channels of distribution etc. and helps in
making marketing activities of the enterprise suitable to the needs and specifications of the
marketing and helps in implementing the decisions so that predetermined objectives of the
enterprise may be achieved.

 Need for Marketing Organization

In the technological arena, modern marketing activities are consumer oriented. Thus, to sustain
in the competitive market, the business enterprise requires a marketing organization that can take
decision on the marketing factors viz. product, price, promotions, etc. to satisfy the needs and
desires of customers and maximize profit of the enterprise.

Therefore, a sound marketing organization is the pillar for success for any business enterprise
and provides a framework to establish an authority among the sub ordinates, locate
responsibility, establish sales routines, enforces proper supervision of sales force, avoid
repetitive duties and enable the top executives to devote more time for planning policy matters.

 Principles of Organization

Following are the important principles of organization which are mentioned here:

 Unity of Objectivity

The attainment of objectives is the main purpose of the organizing. An organization and every
part of it should be directed towards the accomplishment of objectives. Every member of the
organization should be familiar with the common objectives or goals. Thus, the organizational
goals, departmental goals and individual goals must be clearly defined.
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 Efficiency

An organization is efficient if it is able to accomplish pre-determined objectives at minimum

possible cost. An organization must also provide maximum possible satisfaction to its employees
and should also contribute to the welfare of the community.

 Division of work

For the sound and effective organization, the total task should be divided in such a manner that
the work of every individual in the organization is limited and the work should be assigned to the
right person according to his physical, mental and psychological capacities.

 Span of control

Due to limitation of time and ability, no executive can effectively supervise more than a
particular number of subordinates. Therefore, every executive should be asked to supervise a
reasonable number of executives depending upon his ability, his job, the complexities of duties
of his sub-ordinates, the nature and importance of work to be supervised, etc.

 Scalar Principle

It is sometimes also known as the chain command. According to the principle, the authority and
responsibility should be in a clear line from the top to the bottom of the organization. The more
clear the line of authority in an enterprise, the more effective will be communication and
responsible decision making.

 Delegation

The authority delegated to an individual manager should be adequate to enable him to

accomplish results expected of him.

 Functional Definition

The duties, responsibilities, authorities and organizational relationships of an individual working

on a particular position should be clearly defined so that there is no confusion. The clearly
defined duties and authorities of an individual will contribute towards the accomplishment of
objectives more effectively.

 Authority and responsibility

It is the tool by which a manager is able to create an environment for individual performance.
Thus, the authority and responsibility of each manager and supervisor should be clearly defined.
Every manager should be held responsible for the acts of his subordinates as well as his own
acts.
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 Unity of command

The subordinates should receive orders from only one supervisor and no one should be
accountable to more than one boss at a time. This will avoid confusion, disorder and indiscipline.
Thus, this principle creates the feeling of personal responsibility and avoids the problems of
conflicts.

 Unity of direction

For the sound and effective organization, there must be one head and one plan for group of
activities directed towards the same objectives.

 Co-ordination

There must be an orderly arrangement of group effort and unity of action and co-ordination of
activities at various levels.

 Flexibility

The organization structure should be flexible so that it can be easily adjusted to changing
conditions. The organization structure should permit expansions, mergers and replacements, etc.
without disturbing the basic design.

 Continuity

The organization should be so structured as to have continuity of operations.

 Communication

For the sound and effective organization, the effective communication is necessary. It is the
process of transformation of information from one person to another of different levels. It
involves the systematic and continuous process of telling, listening and understanding opinions
ideas, feelings, information, views, etc. of employees of the organization.

 Simplicity

For the better communication and co-ordinations, the levels of the organization should be kept as
minimum as possible. This principle focuses on the simplicity of an organizational structure.

Consultative selling (marketing)

Today, consultative selling has become the number one sales strategy. Instead of one-and-done
transactional salespeople, 89% of buyers describe sales reps they worked with as "trusted
advisors."
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Due to the proliferation of information and on-demand data, the sales process has evolved into
what is known as consultative sales.

Consultative selling is an innovative sales approach that centers on establishing trust and
building relationships with customers. This trust is established by listening to the
customer's needs, pain points, and goals.

Unlike traditional selling, consultative selling isn't focused on pushing a service or product. It's
all about the customer and helping them find the best solution. This transforms the role of a sales
professional into more of a consultant — thus consultative sales.

However, consultative selling isn't appropriate for all sales situations. It's more applicable in
complex sales, such as purchasing a computer, buying a car, or even choosing a mobile phone.
Consultative sales are often appropriate when the customer doesn't have a clear understanding of
what is available or what they need.

In these instances, sales professionals must work to get to know the customer, identify their
needs, understand their pinpoints, and connect the solution that checks these boxes.

To help the customer make the best decision, sales professionals can provide valuable insight,
content, and helpful tools. Doing so can help establish the sales reps as experts, valuable
resources, and trusted advisors.

 Why is consultative selling important?

Traditional sales or product-pushing was all about the here, now, and making a sale. The
consultative sales approach centers on building a lasting relationship with the customer.

It prioritizes the customer's needs and offers tailored solutions to address those needs. This more
modern and thoughtful sales process can open the door to many benefits:

Build lasting relationships with customers. Considering that it can cost up to five times more to
acquire a new customer than to keep an existing one, it makes dollars and sense to build
relationships with customers. This can help foster increased loyalty and trust, which are
cornerstones for referrals and repeat business.

 Improve customer satisfaction: Everyone likes to be understood. When you show your
customers you understand their needs by providing tailored solutions, they will feel like
they're receiving more value for their investment.
 Create a competitive advantage: When sales professionals take a consultative selling
approach, they will stand out from those only focused on pushing services or products.
Educating the customer with valuable resources and insights can further position
consultative selling sales reps as experts and trusted advisors.
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 Bolster sales outcomes: Consultative selling is more efficient and can lead to better sales
outcomes. 53% of sales reps believe following a consultative sales process can make
sales more efficient.

Strategic implications of marketing decisions

Your marketing strategy is potentially the most essential factor in growing your business. It can
help you create products and services that connect to your target market and maintain customer
loyalty. So, without one, you may struggle to expand or fail for good.

But having a strategy doesn't always lead to a 100% success. This is because internal and
external forces can influence the marketing environment. If you want to beat those odds, you
have to know what those forces are.

Here, we highlight the six factors that can affect your marketing strategy.

 Internal factors

The internal factors are the only aspects of marketing that you can control. Much of your
marketing endeavours will stem from there. So, failure to understand how internal factors can
influence your efforts to reach out to your potential and existing customers will hurt your
business.

There are many internal influences, but one is your business' financial position. Your
profitability, cash flow, and liquidity can all directly affect the scope and scale of your marketing
activities.

It will be hard to meet the demand of your target market if you have a limited budget. The good
thing is, there are financing options you can tap anytime to fund your marketing plan. You can
use websites like creditninja.com to apply for additional business financial resources.

Other internal factors you need to consider include the following:

 Corporate objectives
 Human resources
 Communication tactics
 Operational issues
 Business culture
 Social factors

Your marketing strategy should be prepared for potential changes in the structure and attitudes of
society. Social media is one of the best ways to understand and meet the needs and preferences
of customers. No matter how good your product and service are, people are unlikely to buy a
product or service if they don't resonate with your target market.
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Note that people usually follow certain values and norms when making purchasing decisions.
The rise in social media usage has affected how people buy things. Bearing this in mind can
allow you to make better use of social media when marketing your products and services.

 Competition factors

Competition is inevitable in every market sector. If you want to create a winning marketing
strategy and stay one step ahead, you need to understand how your competitors are reacting to
customer needs and changes in the industry.

Remember that you're selling similar products and services to your competitors. It's always
important to adjust your marketing plan to gain a competitive advantage over them. You can
introduce new functions and features to your products or use pricing. But whatever you do, make
sure that you don't lose sight of your marketing objectives.

Bigger competitors are likely to spend much more marketing their products or services. So be
careful when planning your strategy and make sure you don't overstretch your budget. At the end
of the day, your customers should still be the main focus of every marketing strategy and your
business in general.

 Economic factors

Recession (and factors like the ongoing pandemic) can affect your marketing strategy. In that
scenario, it's likely you will have a smaller budget and fewer resources. It's also worth noting that
consumers are less likely to make purchases if they don't feel confident in the economy or their
financial situation.

During an economic downturn, unemployment rates may rise, and consumers may not have a
stable income. That could mean their purchasing power is reduced. With less disposable income,
consumers tend to reduce expenditure and priorities their outgoings.

Therefore, it's crucial you consider your target customers' finances in your strategy. Consider
marketing your product or service as essential to a consumer's lifestyle and show them how
making a purchase will benefit them.

 Regulatory factors

Laws and regulations can influence your marketing strategy at the national or local level. Rules
connected to health and safety, product labelling, and consumer rights can all impact your ability
to market and sell your goods. Regulatory factors can differ by region, but they're all designed to
protect consumers and businesses.

It's extremely important to ensure that your marketing activities don't breach any of them. You
need to know what is and isn't legal if you are to market your product or service successfully.
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 Technological factors

The technological landscape is constantly changing, and it can affect your marketing in many
different ways. There are always new ways to produce, distribute, and market your products and
services.

Keeping an eye on these trends will give you the opportunities to better communicate with your
target market and deliver products that will match their lifestyle and preferences. Remember,
people always consider convenience in addition to price.

In other words, it’s about bringing your marketing plan to life. Instead of living on paper, it starts
living on a day-to-day calendar because it’s translated into action. According to Statista, 71% of
marketing professionals believe their marketing strategy is effective. While that sounds
promising, it still leaves almost a third of marketers feeling unsuccessful. With marketing
implementation, it becomes a lot easier to identify if the issue is with the way a strategy is
executed, or with the strategy itself.

Valued customer
Valued customer is best defined as how much a product or service is worth to a customer. It’s a
measure of all the costs and benefits associated with a product or service. Examples include
price, quality, and what the product or service can do for that particular person. There are also
monetary, time, energy, and emotional costs that consumers consider when evaluating the value
of a purchase.

 How is customer value created?

Customer value isn’t only about money. It’s typically created through the solution that a product
or service provides, not only to the buyer but to their organization as well. Keep in mind that
customer value is subjective. Price is universal—it will cost every customer the same amount to
purchase your product or service. But the value will be different for every buyer because it
involves so many variables, including customer experience.

For example, say you offer an ecommerce platform where businesses can post items for sale.
You get two new customers—an online-based corporation and a mom-and-pop shop that, until
now, has been brick and mortar. The cost is the same for both companies. But for the
corporation, a new ecommerce site in and of itself may not drastically change their business. For
the mom-and-pop store, however, going online could radically increase their sales. So, your
company’s value will likely be much higher for them than for the corporation.

Similarly, if you’re selling software to multiple companies, your customer value will be higher
for a business that relies on your product to run every department than for a business that only
uses your product within one department.
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Value Proposition
A value proposition in marketing is a concise statement of the benefits that a company is
delivering to customers who buy its products or services. It serves as a declaration of intent, both
inside the company and in the marketplace.

The term value proposition is believed to have first appeared in a McKinsey & Co. industry
research paper in 1988, which defined it as "a clear, simple statement of the benefits, both
tangible and intangible, that the company will provide, along with the approximate price it will
charge each customer segment for those benefits

 Components of a Value Proposition

A company's value proposition communicates the number one reason why a product or service is
best suited for a customer segment. Therefore, it should always be displayed prominently on a
company's website and in other consumer touch points. It also must be intuitive, so that a
customer can read or hear the value proposition and understand the delivered value without
needing further explanation.

Value propositions that stand out tend to make use of a particular structure. A successful value
proposition typically has a strong, clear headline that communicates the delivered benefit to the
consumer. The headline should be a single memorable sentence, phrase, or even a tagline. It
frequently incorporates catchy slogans that become part of successful advertising campaigns.3

Often a subheadline will be provided underneath the main headline, expanding on the
explanation of the delivered value and giving a specific example of why the product or service is
superior to others the consumer has in mind. The subheading can be a short paragraph and is
typically between two and three sentences long. The subheading is a way to highlight the key
features or benefits of the products and often benefits from the inclusion of bullet points or
another means of highlighting standout details.

This kind of structure allows consumers to scan the value proposition quickly and pick up on
product features. Added visuals increase the ease of communication between business and
consumer. In order to craft a strong value proposition, companies will often conduct market
research to determine which messages resonate the best with their customers.

Value network
A value network is a set of connections between organizations and/or individuals interacting
with each other to benefit the entire group. A value network allows members to buy and sell
products as well as share information. These networks can be visualized with a simple mapping
tool showing nodes (members) and connectors (relationships).

 Types of Value Networks

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The main types of value networks include the Clayton Christensen network, the Fjeldstad, and
Stabells network, Normann and Ramirez constellations, and Verna Allee's networks.

Clayton Christensen Network

The Clayton Christensen network describes relationships that already exist externally and that
any new entrants into the network will be molded to fit the current network or business model's
shape. New entrants will have a difficult time to break through and/or provide new ideas or
implement changes because the new entrants will most likely end up accommodating and falling
in line with the current network.1

Fjeldstad and Stabells Network

Fjeldstad and Stabells believe that the most important parts of a network are (1) customers, (2)
services, (3) service providers and, (4) contracts that allow access to services. This theory states
that customers are essential to the network and their involvement provides the added value.2 The
most common example is social media, e.g. Facebook, YouTube, Instagram, and TikTok, where
customers sign up, agree to terms in the contract, and add the value to the network.

Normann and Ramirez Constellations

The Normann and Ramirez constellations value network believes networks to be fluid setups that
allow for constant change and improvement. It is up to members in the network to analyze the
current relationships and look for openings and opportunities as a way to add value.3

Verna Allee's Networks

Verna Allee's networks believe that networks create both tangible and intangible values and
that value network analysis should be incorporated into all facets of a business to extract the
most value in every stage.

 Benefits of a Value Network

The benefit that a value network provides comes from the way a business or individual applies
the resources, influence, and insight of others to whom they are connected. A startup, for
example, may look to its external connections, such as its investors and mentors, to provide
experienced guidance on how to approach the development and growth of the business.

While many founders have a deep understanding of the product or service they develop, bringing
that service to market, finding customers, and scaling up the business may be unfamiliar to them.

To make up for this shortcoming, they may seek the advice of trusted stakeholders with
experience on such matters, which is considered an intangible benefit of their relationship. They
might also look to groups that specialize in assisting startups, such as incubators and
accelerators, to increase their exposure to potential mentors and investors.
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Understanding strategic relevance of market segmentation,

Market segmentation strategies allow companies to divide their customers into categories with similar
profiles. This can help marketing teams personalize their campaigns, expand their reach and increase
sales. If you work in marketing or sales, it might be helpful to learn more about creating a market
segmentation strategy.

A segmentation strategy is a marketing concept that refers to a company's plan for identifying each
section of its target market. Businesses develop a segmentation strategy to appropriately categorize their
customers and choose the best niches for their products and advertising. A segmentation strategy can be a
simple description of your target segments or an in-depth guide to short-term and long-term plans for
engaging with different audiences. A market segment can be based on almost any criteria,
including demographics, customer behavior, location, lifestyle and personality. A good segmentation
strategy can focus on multiple, specific segments or overlapping segments that consider different
combinations of variables. For example, one company's segmentation strategy could be to target their
customers based on where they live. Another company might create business segments based on cross
segments of age and lifestyle interests.

 How to choose a market segmentation strategy

Marketing professionals need to be able to create a customized market segmentation strategy to capture as
many customers as possible using targeted product messaging. Learn how to select the right market
segmentation strategy for your business using these steps:

1. Consider who needs your products

Start by identifying the primary need for your product. Your entire potential customer base is united by
their need or want for whatever your company is selling. All of your customers have some type of
problem that they need your product to solve. Within that group are the different market segments that
describe what qualities and experiences your consumers have in common with one another. Think about
who might find your products or services useful and start thinking about ways you could sort them into
categories.

2. Gather data about your customers

Collect information about your audience by performing market research about your product. Use surveys,
polls, focus groups and interviews to develop a database of information about your customers that you
can use to identify trends. Digital analytics tools can help you gain additional insights into consumer
behaviors. This will help you gather information about how much customers spend, what they buy and
how they align with your market segments. The more data you can collect about your consumers, the
easier it will be to identify core segments and test different categories for your market segments.
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3. Look for underserved segments

When deciding how to segment your market, research new opportunities and underserved markets that
could generate new business. Your segmentation strategy should allow you to identify multiple segments
based on your criteria, using a combination of reliable, established audience segments and new or
experimental segments. When planning your market segmentation strategy, include smaller segments to
explore audiences that don't have products specifically suited for them. This step can help you identify
marketing niches that find new uses for your current products and services.

4. Research audience behaviors

When preparing your segmentation strategy, you need to understand how your various market segments
make purchasing and lifestyle decisions to determine how to appeal to those actions. Gathering details
about how your consumers behave can help you identify which types of customers you can persuade to
purchase your products. This includes collecting information about how each target audience group would
learn about your products, view your advertising and interact with one another.

5. Develop buyer personas

Visualize your audience by creating buyer personas for each possible segment. A buyer persona is a
description of a hypothetical customer that represents a consumer audience. You can use buyer persona
details to summarize your market research about audience demographics, behaviors, interests and
communities. These fictional people can help you identify the most relevant sub-groups within your entire
audience so you can start thinking about how to appeal to them. Reviewing buyer personas enables you to
determine which types of customers should be a central part of your segmentation strategy.

6. Consider positioning options

Positioning is the overall branding and perception associated with a product or company. Businesses
might position their products in multiple contexts depending on their segmentation strategy. For example,
a business may have a luxury product line that involves positioning its items as high-end and high-quality.
Think of the different ways you could market your product to each group in your segment strategy. If you
can't think of ways to specifically engage a specific segment, it may not be an ideal part of your
segmentation strategy.

7. Review your profit potential

You also want to ensure that you can make a significant profit from working with each group in your
segmentation strategy. Consider ways to categorize your market that focuses on the most profitable
consumer groups. Look at how much money each segment spends, including total revenue, average sale
price and purchasing frequency. Project how you could capture more profit from your current segments or
how marketing to new segments could increase your income.
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8. Study the competition

Review how your competitors categorize and appeal to segments using their promotional mix. Having a
unique segmentation strategy can help you differentiate your business from companies that offer similar
products. Consider how your business and products compare to key competitors, then identify ways that
you could make your brand the most appealing option to various segment groups.

9. Define your criteria

After considering all of the elements that influence market segmentation, create a set of criteria that
explains each segment. Write a statement directly explaining who qualifies for each segment. You can
refer back to your segmentation criteria when planning future marketing initiatives and gathering
additional research about your audience.

10. Name your segments

Come up with a short phrase that summarizes the identity of each segment. This could refer to the
customers' demographics or shopping habits. Assigning a descriptive name to each segment can help you
discuss specific marketing strategies and consumer research more easily.

11. Test your appeal with each segment

Once you have your segmentation strategy in place, it's important to remember that customer behaviors
can change over time. You can track the effectiveness of your segmentation strategy by collecting
customer data and monitoring key metrics that measure engagement. Actively find ways to connect to
each segment, tracking how your audience demographics and interests change over time to ensure your
market segmentation strategy remains relevant.

Positioning maps
A positioning map is a concept that helps a brand determine how it positions itself in the market.
It illustrates the range of “positions” that a product or brand can take in the market based on two
dimensions that are important to customers.
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 Why Use Positioning Mapping?

To illustrate the positioning of your brand, take a pen and paper, a tablet, or an online
whiteboard. Then, follow these steps:

1. Draw two perpendicular lines: the x and y-axis.

2. Pick two parameters relevant to your market segment. For example, if your brand sells t-shirts,
you can choose quality and design as parameters that indicate purchasing decisions. Ideally, you
should have your market research done to pull data about the consumer's perception.

 Types of dimensions for the positioning map:

The most commonly used dimensions are related to price and quality. But there can be a variety
of other dimensions, such as:

 High or low-volume market

 Necessity or luxury
 Simple or complex
 Healthy or unhealthy
 Low-tech or High-tech
 International or local
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3. Create a list of all your competitors. Find the companies that offer products similar to yours. If
you are unsure how to find your competitors, you should use web and social media listening to
find out who they are.

4. Rate your competitors based on the parameters that you have established for your map and
place them on the graph. This will help with identifying their brand or product positioning.

5. Rate your own brand or products and place them on the graph. Therefore, you will effectively
see your position in relation with your competitors.

6. Interpret the map. This step helps you discover your brand’s strengths and weaknesses,
identify your competitor’s positioning strategies and identify gaps in the market.

 How to Interpret a Positioning Map?

Let’s say that you are trying to figure out the price parameter versus the quality parameter. Now
that you have the illustration in front of you, you can easily see if your brand sells at a higher or a
lower price than your competitors. If there is there a space or gap with little or no competition
illustrated, then this quadrant represents a gap in the market. For instance, there may be a gap in
the quadrant that illustrates a medium product at a medium price range. With the help of product
management, competitive strategy, and marketing campaigns, you can attract potential customers
who are willing to pay a little bit more, for a better quality product.
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Value curve
The concept of value curves was introduced in 1997 by academics W. Chan Kim and Renée
Mauborgne. They believe that an effective strategy needs to have three main factors:

 A clear focus.
 Divergence from the competition.
 A compelling tag line.

The Value Curve model aims to fulfill all of these factors. It provides a useful framework
for comparing your strategy against that of your competitors, by using a simple chart. This
helps you focus sharply on the things that differentiate you from your competitors, and
develop a clear and easily explained value proposition.

Unsurprisingly, the budget airline's proposition is based on affordability. Unlike the

traditional airline, it doesn't offer extra services such as in-flight entertainment, extra
legroom, fine dining, or access to major airports. It does offer things like snacks, drinks, car
hire, hotels, and coach tickets as optional extras, which means that it can still offer its core
product at a low cost that will appeal to customers on a budget.

Advantages and Disadvantages

Value curves help you to test whether your strategy is different enough from your
competitors' to have a real impact. They also provide a clear, visual representation of your
competitors' strategic profiles and the competitive factors present in your industry.
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Essentially, by rating the level at which your organization and your competitors "value"
each competitive factor, you can quickly identify where your strategies diverge. After all,
trying to gain a foothold in an industry by copying a competitor's strategy would likely be a
fruitless task. Instead, gain a competitive edge by making sure that your proposition is
sufficiently different from theirs in a way that matters to your customers. If it isn't, you
might want to think about a change of direction.

Value curves can also help you to identify gaps in the market, for example by assessing
whether there are important competitive factors that you and your competitors have yet to
invest in.

One of the key advantages of using value curves is their simplicity. Anyone can use them
and it's often much easier to refer back to them when making key decisions than it is to read
a lengthy report.

But the simplicity of the tool can also be a disadvantage, as it often means that other, less
tangible factors of competition, such as brand identity, are not taken into consideration.
Similarly, internal sources of value – the value that your organization places on staff
training or on a highly efficient production process, for instance – are not generally
included.

 How to Use the Tool

Use the following steps to apply the model:

Identify the main competitive factors in your industry. These could include price, customer
service or quick delivery, for example.

Write these along the horizontal axis of your graph.

Determine how you and your competitors score for these factors. Now plot these points on
your graph for yourself and your competitors, and draw lines to connect these points. These
are the value curves for your industry.

Now review your market position against that of your competitors. Do you have a clear
market position? Is it likely to matter to your customers? And are there any gaps in the
market that you could exploit?