Market-Driven Acquisitions Theory - AngJamesS_ChenYingmei (2002)
Market Driven Strategy - Rof's Blog – Another Place to Share · 5/12/2012 · Consumer Research...
Transcript of Market Driven Strategy - Rof's Blog – Another Place to Share · 5/12/2012 · Consumer Research...
Development of Marketing Concept
Production
Concept
Product
Concept
Selling
Concept
Marketing
Concept
Marketing
Marketing
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large.
(AMA 2007)
Marketing at Strategic Level
• Positivist (quantitative)
• Interpretivist (qualitative)
Consumer
Research
• common needs or
characteristicsSegmentation
• One or more segments to
pursueTargeting
• benefits
• unique selling propositionPositioning
Capabilities for learning about customers and markets
Market-driven strategy is a market sensing and
learning processes
Competitive strength come from superior customer
knowledge
To deliver a customer experience, less formal research,
more one-to-one communication
Consumer Village
Watch people activity
Understand what it is like to live on $50/month
Social networking sites
Market Driven Strategy
Market sensing processes Building Open-minded inquiry processes
Analyzing competitors’ actions
Listening to front-line employees
Searching for latent customer needs
Scanning the peripherary of the market
Encouraging experimentation
Market Sensing Process
Marketing information and knowledge resources1. Scanning processes
2. Specific marketing research studies
Internal and external marketing information resources
In-company resources
Open source resources
Research agency resources
Marketing Information and Knowledge Resources
A Framework for Market SensingProbability of the Event Occurring
Effect of the
Event on the
Company
High LowMedium
1
2
3
4
5
6
7
* 1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal
Utopia Field ofDreams
Things toWatch
DangerFutureRisks
Market Sensing Grid
Marketing research project Defining the problem
Understanding the limitations of the research
Quality of the research
Costs
Evaluating and selecting suppliers
Research methods
Marketing Research Consideration
Research
Project and Scope
Research
Objectives
Research
Questions
Planned
Outcomes
OLD NEW
CONSUMERS Passively receiver Empowered media users
control and shape content
ASPIRATIONS To keep up with To standout from the
the crowd crowd
TV CHOICE Three networks Hundreds of channels
plus video on demand
MAGAZINES Age of the big Age of the special interest
glossies: Time, magazine for every age
Life, Newsweek and affinity group
ADS Everyone hums Talking to a group of one
BRANDS Rise of the big, Niche brands, product
ubiquitous brands extensions and mass
from Coca-Cola customization mean many
to Tide product variations
Source: Anthony Bianco, “The Vanishing Mass Market”, Business Week, July 12 2004, 58-62
Why Segmentation: From Mass Markets to Micro Markets
SegmentationRequirements
Response
differences
Identifiable
segments
Actionable
segments
Favorable
cost/benefitStability
over time
Segmentation
Levels and types of market segmentation
OperationalSegmentation
ManagerialSegmentation
StrategicSegmentation
Vision
Strategic intent
Product benefitsResource allocation
Alignment
Planning
Marketing programs
- Advertising
- Sales
- Distribution
Market Segmentation Levels
Segmentation and Market-Driven Strategy
Segments
Value
Opportunities
Capabilities/
Segment
Match
Target(s)
Positioning
Strategy
Strategic market segmentation (5)1. Identifying market segments
Segmentation variables
Characteristics of people and organizations
Consumer markets
Organizational markets
Product use situation segmentation
Buyers’ needs and preferences
Purchase behavior
2. Strategic analysis of market segments
Customer analysis
Competitor analysis
Positioning analysis
Estimating segment attractiveness
Segmentation “fit” and implementation
Segmentation Strategy
Illustrative Segmentation Variables
Characteristics
of people/
organizations
Consumer
Markets
Industrial/
Organizational Markets
Age, gender, income,
family size, lifecycle
stage, geographic
location,
lifestyle
Type of industry, size,
geographic location,
corporate culture, stage of
development, producer/
intermediary
Use situation Occasion, importance of
purchase, prior
experience with product,
user status
Application, purchasing
Procedure (new task,
modified rebuy, straight
rebuy
Buyers’ needs/
preferences
Brand loyalty status, brand
preference, benefits sought,
quality, proneness to make
a deal
Performance requirements,
brand preferences, desired
features, service
requirements
Purchase
behavior
Size of purchase,
frequency of purchase
Volume, frequency
of purchase
Market Segments Identification
Best Buy segmentation strategy Jill’s - “soccer moms”
Barry’s - wealthy professionals
Buzz’s - “tech enthusiasts”
Ray’s – “the family man”
Mr Storefront – “the small business customer”
Carrie’s – “young, single females”
Helen and Charlie’s – “older couples whose
children have left home”
Market Segment Example
Illustrative Example: Gasoline Buyers
Road
Warriors
True
Blues
Generation
F3 (Fuel,
Food & Fast)
Homebodies
Price
Shoppers
Higher-income, middle-aged men, drive 25-
50000 miles a year… buy premium with a
credit card … purchase sandwiches and drinks
from the convenience store… will sometimes
use carwash
16% of
buyers
Men and women with moderate to
high incomes, loyal to a brand and
sometimes a particular station …
frequently buy premium, pay in cash
16% of
buyers
Upwardly mobile men and women -
half under 25 years of age -
constantly on the go … drive a lot
snack heavily from the convenience store
27% of
buyers
Usually housewives who shuttle
children around during the day and
use whatever gas station is based on
town or on route of travel
21% of
buyers
Not loyal to brand or station and
rarely buy premium … frequently on
tight budgets.
20% of
buyers
Illustrative Consumer Perception Map
Low
Quality
High
Quality
Expensive
Inexpensive
GROUPI
GROUPV
GROUPIII
GROUPII
GROUPIV
• Brand E
• Brand D
• Brand C
• Brand B
• Brand A
Perceptual Mapping
Segmentation “Fit” for Implementation
Internal Compatibility
Market Segment
Attractiveness
High Low
High
Low
Attractive segmentsthat match with
companycapabilities
Attractive segmentsbut with poor match
with companycapabilities
Unattractive segmentsthat do not match withcompany capabilities
Unattractive segmentsbut with match to
companycapabilities
Finer segmentation strategies
Logic
Customized offerings
Diverse customer base
Close customer relationships
Finer segmentation strategies
Micro-segmentation
Mass customization
Variety-seeking strategy
Barriers to market learning
Managers reject new insights/information
Rigid organizational structures and inflexible information
systems
Politics favour the status quo
Overwhelming pressure of existing business operations
Tendency to “active inertia”
Market Sensing Barriers
Market Targeting Strategy
The Marketing Targeting Decision Identities the People or
Organizations in a Product-Market Toward Which a Firm Directs
Its Positioning Strategy Guided by an understanding of:
• The product-market
• Its buyers
• Firm’s capabilities resources
• Competition
Effective targeting and positioning strategies are essential in
gaining and sustaining superior performance
Market Targeting Alternatives
Selective
TargetingExtensive
Targeting
Segments Clearly Defined
Differentiated But Segments
Not Clearly Defined
TargetSelectedNiche(s)
TargetMultipleSegments
ProductVariety
ProductSpecialization
Targeting Alternative
Targeting in an Emerging Market
Buyer Diversity
Segmentation limited due to similarity of buyers’ preferences
Industry Structure
Typically small new organizations
Limited access to resources
Capabilities and Resources
Unique benefit (differentiation) strategy rather than low-cost
First-mover advantage
Targeting Strategy
Single target or a few broad segments
TARGET MARKET
POSITIONING
EFFECTIVENESS
POSITIONING
STRATEGY
How well
management’s
positioning objectives
are achieved for the
market target
POSITIONING CONCEPT
The desired positioning of the
product (brand) by targeted buyers
The combination of
marketing actions
used to communicate
the positioning
concept to targeted
buyers
Strategic Positioning Initiatives
1. The positioning concept applies to a specific brand rather
than all the competing brands that compose a product
classification
2. The concept is used to guide positioning decisions over the
life of the brand
3. Multiple concepts are likely to confuse buyers and may
weaken the effectiveness of positioning actions
Positioning Issues
Positioning Errors Under-positioning – customers have only vague ideas
about the company and do not perceive anything distinctive about it
Over-positioning – Customers have too narrow an understanding of the company, product, or brand
Confused positioning – Frequent changes and contradictory messages confuse customers
Doubtful positioning – claims made for the product or brand are not regarded as credible
Positioning Errors
Product Strategy
Promotion
Strategy
Price Strategy
Distribution
Strategy
Market Target
Positioning Strategy
Targeting and Positioning
Methods for Determining Positioning
Effectiveness
Analytical
Positioning Models
Test Marketing
Customer and Competitor Research
Exercise
1. Read a brief story of a product example in an emerging market
2. Gather an additional information as needed than discuss the situation with your team mate
3. Make a perceptual map to illustrate the situation, consist of related brands positioning and consumer clusters
4. Select the appropriate target market and positioningsrategy for the product situation
5. Determine several actions should be taken on eachmarketing mix components related to the target marketand positioning strategy