Module 6 in Marketing Management

Marketing Strategy and Marketing Mix

The strategic plan defines the company’s overall mission and objectives. Marketing’s role is shown in
Figure 2.4, which summarizes the major activities involved in managing a customer-driven marketing
strategy and the marketing mix.

Consumers are in the center. The goal is to create value for customers and build profitable customer
relationships. Next comes marketing strategy—the marketing logic by which the company hopes to
create this customer value and achieve these profitable relationships. The company decides which
customers it will serve (segmentation and targeting) and how (differentiation and positioning). It
identifies the total market and then divides it into smaller segments, selects the most promising
segments, and focuses on serving and satisfying the customers in these segments.

Guided by marketing strategy, the company designs an integrated marketing mix made up of factors
under its control—product, price, place, and promotion (the four Ps). To find the best marketing
strategy and mix, the company engages in marketing analysis, planning, implementation, and control.
Through these activities, the company watches and adapts to the actors and forces in the marketing
environment.

Customer Value-Driven Marketing Strategy

To succeed in today’s competitive marketplace, companies must be customer centered. They must win
customers from competitors and then engage and grow them by delivering greater value. But before it
can satisfy customers, a company must first understand customer needs and wants. Thus, sound
marketing requires careful customer analysis.

Companies know that they cannot profitably serve all consumers in a given market -- at least not all
consumers in the same way. There are too many different kinds of consumers with too many different
kinds of needs. Most companies are in a position to serve some segments better than others. Thus, each
company must divide up the total market, choose the best segments, and design strategies for profitably
serving chosen segments. This process involves market segmentation, market targeting, differentiation,
and positioning.

Market Segmentation

The market consists of many types of consumers, products, and needs. The marketer must determine
which segments offer the best opportunities. Consumers can be grouped and served in various ways
based on geographic, demographic, psychographic, and behavioral factors. The process of dividing a
market into distinct groups of buyers who have different needs, characteristics, or behaviors and who
might require separate marketing strategies or mixes is called market segmentation.

Every market has segments, but not all ways of segmenting a market are equally useful. For example,
Tylenol would gain little by distinguishing between low-income and high-income pain-relief users if both
respond the same way to marketing efforts. A market segment consists of consumers who respond in a
similar way to a given set of marketing efforts. In the car market, for example, consumers who want the
biggest, most comfortable car regardless of price make up one market segment. Consumers who care
mainly about price and operating economy make up another segment. It would be difficult to make one
car model that was the first choice of consumers in both segments. Companies are wise to focus their
efforts on meeting the distinct needs of individual market segments.

Market Targeting

After a company has defined its market segments, it can enter one or many of these segments. Market
targeting involves evaluating each market segment’s attractiveness and selecting one or more segments
to enter. A company should target segments in which it can profitably generate the greatest customer
value and sustain it over time.

A company with limited resources might decide to serve only one or a few special segments or market
niches. Such nichers specialize in serving customer segments that major competitors overlook or ignore.

Most companies enter a new market by serving a single segment; if this proves successful, they add
more segments. For example, Nike started with innovative running shoes for serious runners. Large
companies eventually seek full market coverage. Nike now makes and sells a broad range of sports
apparel and equipment for just about anyone and everyone in about every sport. It designs different
products to meet the special needs of each segment it serves.

Market differentiation and Positioning

After a company has decided which market segments to enter, it must determine how to differentiate
its market offering for each targeted segment and what positions it wants to occupy in those segments.
A product’s position is the place it occupies relative to competitors’ products in consumers’ minds.
Marketers want to develop unique market positions for their products. If a product is perceived to be
exactly like others on the market, consumers would have no reason to buy it.
Positioning

is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing
products in the minds of target consumers. Marketers plan positions that distinguish their products from
competing brands and give them the greatest advantage in their target markets.

Such deceptively simple statements form the backbone of a product’s marketing strategy. For example,
from its founding, Southwest Airlines has positioned itself as “The LUV Airline,” a positioning recently
reinforced by the colorful heart in its new logo and plane graphics design. As recent Southwest
advertising affirms, “Without a heart, it’s just a machine.” The airline has “always put Heart in
everything it does.”

In positioning its brand, a company first identifies possible customer value differences that provide
competitive advantages on which to build the position. A company can offer greater customer value by
either charging lower prices than competitors or offering more benefits to justify higher prices. But if the
company promises greater value, it must then deliver that greater value. Thus, effective positioning
begins with differentiation—actually differentiating the company’s market offering to create superior
customer value. Once the company has chosen a desired position, it must take strong steps to deliver
and communicate that position to target consumers. The company’s entire marketing program should
support the chosen positioning strategy

ACTIVITY: WRITE YOUR ANSWERS IN A YELLOW PAD.

Deadline: May 20, 2023

QUESTION: ANALYZE FIGURE 2.4 AS SHOW ABOVE AND PUT YOUR UNDERSTANDING INTO
NARRATIVE.