MKTG 3650 19th Edition Lecture 19 Outline of Last Lecture I. Requirements for Effective SegmentationII. Target MarketingOutline of Current Lecture III. Targeting StrategiesCurrent LectureWhich Targeting Strategies Make the Most Sense When? - When resources are limited, concentrated – or niche - makes the most sense.- An undifferentiated marketing approach makes more sense when variability amongcompetitors’ products is low, as is typically the case with steel.- A product’s life cycle stage (as discussed soon) also influences the “best targetingstrategy” to choose. o If your firm is marketing a “Brand-New-to-the-World” product (a disruptiveinnovation) - targeting the market through an undifferentiated strategy may bemore logical.  That is because then your firm - because your product is it - is creating anew market. A market which it “owns” – at least temporarily. o For more mature products - differentiated targeted approaches (targeting multipletarget segments) almost certainly make more sense.- When necessary resources exist to pursue the strategy effectively, firms usually shouldengage in a differentiated target marketing strategy. Topic 3 - Positioning: - The age of shotgun-like marketing is over. The age of rifle-like marketing hasbegun. (It is highly unlikely to ever go away.) When a firm has selected two or three market segments as worthy of targeting, its next goalshould be to create a unique - and uniquely desirable - position in the minds of thecustomers/prospects comprising the respective targeted segments. - Say, a restaurant targets three different segments who, by turns, want “healthy food”,“lower-priced options” and a “good time.” These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.How can firms achieve such positioning? - Through managing (their) marketing mixes... o What values - solutions - the firm builds into its products, says about itsproducts in terms of promotions, what others say about the firm’s products,how the firm prices the product priced, where it is sold (retail-level). Positioning is executed for purposes of achieving differentiation, or earning and maintaining asustainable competitive advantage. - An SCA – is something, or some resource or capability – that one firm does better than itscompetitors. The something-it-does-better allows the firm to deliver more attractivevalue to targeted segments. From consumers’ perspective, positioning may be described as: - The way a product is defined by consumers on important attributes; - The “place” a product occupies in consumer’s minds relative to the places occupied byother, competing products.o Cadillac versus Mercedes versus Lexus … From marketers’ perspective, positioning … - … involves implanting products’ (or brands’) unique benefits and differences (i.e., aproduct’s differentiating value) in the minds of customers. All of any firm’s marketing efforts; that is, all the ways the firm manages or maneuvers itsmarketing mix should be executed mindful of the purpose of and need to develop a “unique anduniquely desirable position” for its product(s)/brand(s). - Customers position products in their own minds regardless of whether marketersattempt to do it for them. o But obviously, marketers should attempt to control this process. a) When “positioning”, marketers seek to “differentiate” a “product (brand)” by building the “perception” (in the market’s collective mind) that a “unique and uniquely-desirable set of desirable benefits” will be delivered by the product/brand that is being positioned. b) This “unique set of benefits” should be delivered through the firm’s marketing mix. c) This set of benefits should be designed to appeal directly to the wants, needs, (or problems) of specifically-targeted segments. d) This set of benefits should work together to make the brand appeal cooler, more desirable, not just different but also better and perhaps, in the end, worth acquiring even at often higher prices.Choosing a Positioning Strategy - - The goal is to differentiate a product/brand by building a unique bundle of benefits thatappeal to a substantial portion within a targeted segment. These benefits can be primarilyperceptual or entirely real. When positioning, three steps are in play:1) Firms should identify and actually be capable of delivering a set of possible (sustainable)competitive advantages that will deliver more value - or superior solutions/benefits - totarget (customer) segments than can their competitors’ products can deliver to those samesegments. a. The firm that delivers more value – i.e., merely perceived or absolutely genuinevalue – will win. 2) Firms should choose the right (proper) competitive advantages to promote and deliver(i.e., position) to targeted customers. a. Note: the constituents of different segments will be attracted to or influenced bydifferent values. 3) Firms should select an overall positioning strategy for their product/brand, then allocatethe resources necessary to create and maintain the position. a. Ideally, the position should be based on differences that are “determinant”. i. Determinant means “differences” that are “important” to consumers in thechoices they make. Companies, products, or brands (all of which can be positioned), can be differentiated on thebasis of:a) Characteristics associated with the Product itself a. Cars are positioned this way, b. For example, if you have kids, love your kids, and don’t want to kill your kids in acar wreck, which brand is uniquely positioned to satisfy your particular needs? b) Services associated with the Product. a. Hyundai c) The ‘channels’ used to Distribute or Promote the Product (discuss channels later)a. You are a women’s apparel designer and … d) People associated is some shape, way or form with the product. a. The type of people who use the product; remember the influence of social groupsor reference groups. e) Image that exists or is strategically constructed for the product. f) Symbols that are affiliated with or are strategically attached to the product. g) Animals – yes, animals, a surprising number of animals are