Session 13 MG 220 Marketing Management BBA Sec C

1. Part 3: Connecting with Customers > Market Targeting Part 4: Building Strong Brands > Overall review of Part 4 > Discussion on Term Project Class Presentation | Session 13 | 29 Sep 2010

2. Market Targeting Marketers job is to identify segments and select which ones to target Segments are identified => Now selecting which ones to target More and more refinement helps identify smaller, more focused segments and Better target them MG 220 Marketing Management 2

3. Market TargetingEffective Segmentation Criteria Market segments must rate favorably on following criteria: Measurable Size, purchasing power, characteristics can be measured easily It should not be vague Substantial Large & profitable enough to serve Worth going after with a tailored marketing program/effort Accessible Can be effectively reached and served Differentiable Conceptually distinguishable Respond differently to different marketing-mix elements Actionable Effective programs can be formulated for that particular segment MG 220 Marketing Management 3

4. Market TargetingEvaluating and Selecting the Market Segments Evaluation process Based on five criteria (mentioned previously) Vis-à-vis two factors: Segment’s overall attractiveness Company’s objectives and resources A company must evaluate segments carefully by answering all criteria clearly and ensuring that it is favorable MG 220 Marketing Management 4

5. Market TargetingEvaluating and Selecting the Market Segments Selecting Market Segments Selection is done based on evaluation of market segments Five different patterns are used: Single-segment concentration Selective Specialization Product Specialization Market Specialization Full Market coverage (illustrations ahead are in a grid pattern showing M-Market vs. P-Product) MG 220 Marketing Management 5

6. Market TargetingEvaluating and Selecting the Market Segments 1. Single-segment concentration Pick only one segment Focus on it and achieve leadership and thus Have high returns of investment Downside: Too much dependency implies increased risk Generally: Companies tend to operate in more than one segment Helps diversify and absorb costs in a better way Concept of Supersegments: Segments sharing exploitable similarities: Companies try to operate in supersegments too MG 220 Marketing Management 6

7. Market TargetingEvaluating and Selecting the Market Segments 2. Selective Specialization Pick different segments having no synergy Each is objectively attractive and appropriate Different approaches can be: Different products in different markets (as in fig.) Different segments (totally isolated from each other)picked for one product MG 220 Marketing Management 7

8. Market TargetingEvaluating and Selecting the Market Segments 3. Product Specialization Focus on one product Offered across all markets (segments) Too much focus on product alone What if product is replaced by a betterproduct or technology? Example: Kodak’s camera films MG 220 Marketing Management 8

9. Market TargetingEvaluating and Selecting the Market Segments 4. Market Specialization Focus on one market Focus is on serving as many needs of that market Again, too much dependency on one area What if this market is not able to grow? Example: Institutes too much focused onaccounting market (CA, ACCA, CAT etc.) Had to diversify into finance programs (CFA, CISA) MG 220 Marketing Management 9

10. Market TargetingEvaluating and Selecting the Market Segments 5. Full Market Coverage Serve all customer segments for all their needs Very hard to do. Generally large firms can do it only E.g. Microsoft (software market) Two broad strategies/approaches: Undifferentiated Marketing: Firm ignores segmentdifferences and offers one product to all Coke’s 300 ml bottle example applies here Differentiated Marketing: Different products fordifferent segments – still covering all segments Microsoft targeting different segments in software market differently MG 220 Marketing Management 10

11. Market TargetingEvaluating and Selecting the Market Segments Managing Multiple Segments Using segment managers Each is responsible for growth and profitability of own segments Differentiated Marketing Costs In differentiated marketing (targeting different segments with different products), higher sales are possible than undifferentiated marketing but costs are also increased. Product modification costs Manufacturing costs Administrative costs Inventory costs Promotion costs Marketers need to understand the trade-off and be cautious of segmentation (particularly over-segmentation) MG 220 Marketing Management 11

12. Market TargetingAdditional Considerations Segment-by-Segment invasion plans Recommended: enter one segment at a time Add more with time Segment-by-segment invasion plans should be kept as confidential as possible Companies at times fail todevelop these plans How to enter blocked markets:Concept of megamarketing MG 220 Marketing Management 12

13. Market TargetingAdditional Considerations Updating Segmentation schemes Market segmentation analysis should be done periodically because business environment change How consumer attributes change and understanding of it helps update market segmentation Ethical choice of market targets Ensuring that marketing efforts are not exploiting vulnerable groups in society OR promoting harmful products MG 220 Marketing Management 13

14. Part 4: Building Strong Brands > Overall review: Part 4 Class Presentation | Session 13 | 29 Sep 2010

15. Part 4: Building Strong Brands Chap 9: Creating Brand Equity What is Brand Equity? Building Brand Equity Measuring Brand Equity Managing Brand Equity Devising a Branding Strategy Chap 10: Crafting the Brand Positioning Developing and Creating a Positioning Strategy Differentiation Strategies Product Life-cycle marketing strategies Market Evolution Chap 11: Dealing with Competition Competitive forces Identifying Competitors Analyzing Competitors Competitive Strategies for Market Leaders Other Competitive Strategies Balancing Customer and Competitor Orientations MG 220 Marketing Management 15

16. Discussion on Term Project Two Projects 10% Individual Project 3% Project Report Individual Presentation (5 mins.) 2-weeks beginning Oct 5, 2010 1 x deliverable | 1 x presentation Team Project 7% Teams of 4 individuals each Project Report Team Presentation 4-weeks project beginning Oct 19,2010 3 x deliverables | 1 x presentation MG 220 Marketing Management 16

17. Part 4: Building Strong Brands > What is Brand Equity? > Building Brand Equity > Measuring Brand Equity > Managing Brand Equity > Discussion on Mid-Term I Class Presentation | Session 14 | 5 Oct 2010