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Transcript of Pillars of marketing
PILLARS OF MARKETING – STPD Strategies
Marketing Management V.S.Ramaswamy and S. Namakumari
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PILLARS OF MARKETING
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Formulation of Marketing Strategy consists of four steps STPD
(b) Targeting
(a) Segmentation
Serves as a prelude to target market selection. It brings to fore the various possibilities lying in a heterogeneous market
The target market that is arrived through segmentation shows to whom the unit intends to sell the product
Process by which a market is divided into distinct subsets of customers with similar needs and characteristics that lead them to respond in similar ways to a particular product offering and marketing programme
Requires evaluating the relative attractiveness of various segments in terms of 1. market potential 2. growth rate 3. competitive intensity
Positioning shows how ---using what uniqueness the unit intends to sell the product
Entails designing product offerings and marketing programmes that collectively establish an enduring competitive advantage in the target market by creating a unique image or position in the consumers mind
(c) Positioning
(d) Differentiation
Positioning shows how ---using what uniqueness the unit intends to sell the product
Works on the principle that a firm can make its offer distinctive from all competing offers and win through distinctiveness
Targeting attractive market segments
The need for market segmentation and target marketing
Defining market segments
Choosing attractive market segments
Different targeting strategies
STRATEGIC CHALLENGES
(a) Segmentation
• Market segmentation is the process of dividing a market into Market segmentation is the process of dividing a market into sub-sets of consumers with common needs or characteristicssub-sets of consumers with common needs or characteristics
• Since most companies have limited resources, few companies Since most companies have limited resources, few companies can pursue all of the market segments identifiedcan pursue all of the market segments identified
What is market segmentation ?
Why segment the market ?
•Facilitates right choice of Target properly
•Facilitates effective tapping of the chosen market
•Makes the marketing effort more efficient and economic • Helps identify less satisfied segments and concentrate on them
PREMISES OF MARKET SEGMENTATION
IDENTIFICATION OF CUSTOMERS IN TERMS OF SOME IMOPORTANT CRITERIA
A
EACH MARKET SEGMENT CAN BE MEASUREDAND EVALUATED IN TERMS OF MARKET
ATTRACTIVENESS
B
ISOLATE THE SELECTED MARKET SEGMENTC
NEED FOR MARKET
SEGMENTATION
It identifies opportunities for new product
development
It helps in the design of marketing programmes
It improves the strategic allocation of marketing
resources
Bases for segmentation
Buying Behaviour Psychographics
Socio-culturalsDemographics
Geographics
MARKET SEGMENTATION
GeographicSegmentation
National Markets
Global Markets
Factors
Region State District Urban Rural
Continent Country Region
Climatic Zone
As long as there are clearly identifiable differences between one region and the other, with implications to marketing, geographic segmentation will be useful
Geographic Descriptors
METROSSMALL TOWNSRURAL AREAS
Hence segmenting markets on the basis of geographic locations as
..... sales potential ….. growth rates ….. customer needs ….. cultures ….. service needs ….. competitive structures
Different locations vary in
DemographicSegmentation
Race Religion Community Language Age Gender Marital Status Family size Occupation Income Purchasing capacity Educational level Social status
Demographic Descriptors
Age Nike’s clothes for children
Gender Advertising and events directed towards women
Advertising magazines targeting the rich
Products for working women
Travel, books, magazines, etc
Birthdays, anniversaries, weddings
Income
Occupation
Education
Events
Household lifecycle
Each stage differs in spending pattern
Socio-cultural Segmentation
Culture Social factors
Brings its own pattern of social
conduct
Which influences consumer behaviour
Manifests in the form of Symbols, heroes/icons, rituals
and values
Social groups of varying types exert influence on the consumers
A buyer is a member of several groups both formal and informal
Reference Groups : Intimate groups, Secondary groups, Opinion leaders,
Social class
Cultural Descriptors
Religion
Language
Education
Upbringing
Income
Occupation
Location of residence
Social Descriptors
Development son the global socio-cultural scene
--- The Techno Intoxication of consumer communities
--- Spread of consumerist culture and Americanization
--- Pace of life gets even more rapid
--- The new iGen and New Tweens
--- The advent of the next society
Psychographic Segmentation
Lifestyle Attitude Self-concept Value system
Based on
Facilitates grouping of consumers in such a manner that the group shares a common buying behaviour e.g. Coffee Cafes thrive on Lifestyle segments
Certain cars are sold on lifestyle segment
Psychographic Descriptors
Attitude
--- Timid--- Outgoing--- Aggressive--- Traditional--- Modern
Lifestyle
Buyer Behaviour Segmentation
… Usage status
… Benefits sought from the product
… Volume of purchase/degree of use
… Purchase occasion
… Buyers attitude towards the product
… Their loyalty to the brand
Usage based segmentation
Currently users of the brand
Currently users of competitors brands
Currently non- users of the category as such
Sustain them and make them use more of the brand
To succeed here , he should be able to convince those users about the superiority of the brand
The marketer would attract this segment towards its brand
Benefit segmentation
Segmenting market on the basis of benefits expected by the consumer
Marketer provide value in the form of benefits
Helps the marketer identify segments that are presently less satisfied and are experiencing a big gap between the benefit sought and benefit available
E.g.“Calorie watchers” and “health seekers”
PEPSI : Diet Pepsi Horlicks : Diet Horlicks Mother Dairy : Low calorie ice cream Bread : Whole wheat/Brown bread
BENEFIT SEGMENTATION
TOOTH PASTE
GENERAL BENEFITS THAT CONSUMERSSEEK ARE CLEANLINESS AND HYGENE
IN ALL SEGMENTS.
FLUORIDE HERBALCOSMETIC
Protection Against FoulSmell, Modernity &
Cosmetic Value
COLGATE CLOSE-UPPRUDENT
Family Health, ExtraProtection For
Children
COLGATE FLUORIDECIBACA FLUORIDE
Family Health and Welfare. Traditionally
Good For Health
NEEMDABUR
VAJRADANTI
PERCIEVED BENEFITS
MOTOR CYCLE
BRANDS
PERCIEVED BENEFITS
ENFIELD STURDY VEHICLEFOR OUR ROAD CONDITIONS, GOOD FOR LONG RIDES AND HIGH RESALE VALUE
HERO-HONDA FUEL EFFICIENT, HIGH PICK UP AND STYLISH
KAWASAKI BAJAJ
HIGH PICK UP SLEEK MODEL
SCOOTER BRANDS
PERCIEVED BENEFITS
BAJAJ CHETAK FUEL EFFICIENT, LONG LIFE , HIGH RESALE VALUE
KINETIC HONDA ELECTRONIC IGNITION, EASY TO RIDE, TROUBLE FREE
Volume segmentation
Quantity of purchase --- actual or potential is the base for volume segmentation
… Bulk buyers … Small-scale buyer … Regular buyers … One-time buyers
Purchase occasion segmentation
… Regular buyers… Occasion based buyers
Attitude towards the product segmentation
… Enthusiastic … Indifferent… Negative
Loyalty to the brand
Extent of brand loyalty on the part of consumers could be a segmentation base under buying behaviour
Behavioral Descriptors
Consumer
needs
Benefits sought
Choice criteria
Toothpaste
….. Fresh breath….. Sparkling white teeth….. Ayurvedic
Washing machines
….. Front loading ….. Top loading ….. Automatic ….. Semi-automatic
Consumer
needs
Organizational markets
Product performance in different situations
Computers
….. On time delivery….. Credit terms….. Economy….. Spare parts….. Availability….. Training
Industrial Products
Product related
Behavioral Descriptors
Product usage
Loyalty
Purchase predisposition
Purchase influence
Heavy usersKey
accounts
Patronage of a particular product
Loyal customers
Knowledgeable non users
Likely to become future users
WifeHusband - wifeChildrenFriendsDoctors
Children‘s products drugs ,etc.
General Behaviour
Behavioral Descriptors
Lifestyle Social class
Reflected by
Activities Interests Opinions
Includes
Helps to infer what types of products & services appeal to particular groups and how to communicate with individuals in
the group
Status groups based on
Income Education
Occupation
Helps to infer certain behaviour concerning a given product
Behavioral Descriptors
Organizational/Firm
Purchasing Structure Buying Situation
Centralized Purchasing
Decentralized Purchasing
Global basis Cost saving Minimum risk
Product quality Quick delivery Less cost conscious
1. Straight rebuy: routine situation2. Modefied rebuy: change in some element3. New buying situation: requires considerable situation & evaluation of alternative suppliers
Realities of the market place which necessitate market segmentation
First
Second
…. Population growth has slowed down …. More product markets are maturing …. More intense competition …. Firms seek growth via market share/brand extension
…. Expanding disposable income …. Higher educational levels …. Greater awareness …. Sophisticated needs, tastes & lifestyles
ThirdNew technology such as computer aided designs has enabled many firms to mass customize many products …. Different models of cars on the same production line
FourthEasier to implement sharply focused marketing programmes by more sharply targeting their own services ….. Magazines, TV channels
HOW ARE MARKET SEGMENTS DEFINED
Demographic Descriptors
Geographic Descriptors
Geodemographic Descriptors Behavioral Descriptors
Segmentation Criteria
CHOOSING ATTRACTIVE
MARKET SEGMENTS
(The NIKE Case)
CHOOSING ATTRACTIVE MARKET SEGMENTS
STEP 1 Select market attraction & Competitive –position factors
Market attract-iveness factors
… Consumer needs & behaviour
… Market or market segment growth size
… Macro trends..favourable ?
… Opportunity for competitive advantage
… Firm and competitor capabilities & resources
… Attractiveness of industry in which to compete
Competitive – position factors
STEP 2 Weigh each factor
Assign numerical weight to each factor indicate its relative importance in the overall assessment…. (NIKE)
Weight Rating(0 – 10 scale
Total
MARKET ATTRACTIVENESS FACTORS
Customer needs & behaviour .5 10 5.0
Segment size & growth rate .3 7 2.1
Macro trends .2 8 1.6
TOTAL: 1.0 8.7
COMPETITIVE- POSITION FACTORS
Opportunity for competitive advantage .6 7 4.2
Capabilities & resources .2 5 1.0
Industry attractiveness .2 7 1.4
TOTAL 1.0 6.6
STEP 3 Rate segments on each factor; Plot results on matrices
Collect qualitative & quantitative data ( through marketing research) to objectively assess each of the criteria identified in step 1… ( NIKE )
Market Attractiveness
High ( 8 – 10)
Moderate ( 4 – 7)
Low ( 0 – 3)
Company’s Competitive Position
High ( 8 – 10)
Moderate ( 4 – 7)
Low ( 0 – 3)
.
STEP 4 Project future position of each segment
Determine how market’s attractiveness is likely to change over the next 3 to 5 years by assessing
…. Shifts in consumer needs & behavior …. Entry or exit of competitors…. Changes in their strategies
…. Changes product/process technology…. Shifts in economic climate…. Impact of social political trends…. Shifts in bargaining power of customers
MARKET SEGMENT FOR CARS
A / Entry level/Budget segment
B / Compact segment
C / Family/Mid segment
D / Premium/Executive Sedan segment
E / Super luxury segment
CAR SEGMENT ATION BASED ON LIFESTYLE
CORSA ..”The Achtung Baby”In “C” Segment GM tapped the lifestyle oriented Indians – the rich, successful, young and sophisticated termed “Yuppie Indians” who were keen to make a statement bout their position. It built a lifestyle oriented image for CORSA
FORD IKON ..”The Josh Machine Baby”In “C” Segment FORD targeted the “Yuppie Indians” and classified it as the “Young at heart” segment and incorporated a number of attributes that would appeal to this segment . It was a car with best of looks and good vehicle dynamics
MARUTI S X 4MARUTI’s lifestyle pitch :Pure power, Pure muscle, Pure adrenaline, Pure style, Pure man. The new S X 4 - the man amongst the cars -- is here
S X 4 – MEN ARE BACK
MARUTI ALTO VXIn “B” Segment Maruti built lifestyle imagery around ALTO. Its themes were ; “It is the hottest thing” and “ALTO for the couple”
TARGETING STRATEGIES
Market targetingMarket targeting
• Is selecting one or more of the segments identified for the Is selecting one or more of the segments identified for the company to pursuecompany to pursue
• A target market is a group of people or organizations for which A target market is a group of people or organizations for which a company designs, implements, and maintains a marketing a company designs, implements, and maintains a marketing mix intended to meet the needs of the group resulting in mix intended to meet the needs of the group resulting in mutually beneficial and satisfying exchangesmutually beneficial and satisfying exchanges
Steps in choosing the target marketSteps in choosing the target marketIllustration of Bath SoapsIllustration of Bath Soaps
Step-1
Quick analysis : of the bath soap market will reveal two broad segments:i)The premium segmentii)The popular segmentThe firm has to decide which segment to enter. It has toevaluate the segments, assess their compatibility with thefirms ambition, resource and capabilities
Step-2
Evaluating the two segments: i)Is it sizeableii)Is it growingiii)Is it profitableiv)Is it accessiblev)Is it compatible with the firms ambitions, resources and capabilities
PATTERNS OF TARGET MARKET SELECTIONPATTERNS OF TARGET MARKET SELECTION
Single Segment Concentration
Selective specialization
… Number of segments … Each objectively attractive and appropriate … Each promises to be a money maker … Advantage of diversifying the risk
… Concentrated marketing …Strong knowledge of the segment’s needs … Achieves strong market presence … Enjoys operating economies through specialization in production, distribution, promotion
Small Car Market
Sports Car Market
Radio Broadcasting
PATTERNS OF TARGET MARKET SELECTIONPATTERNS OF TARGET MARKET SELECTION
Product specialization
Market specialization
The firm makes a product that sells to all the segments e.g.
… University … Government
… Commercial laboratories The firm makes variations of the same product for different consumer groups
Microscopes
Products required by university laboratories
The firm concentrates on serving many needs of a particular customer group
The firm gains a strong reputation in serving this customer group and becomes a channel for additional products the customer group can use
Full Market Coverage
The firm attempts to serve all customer groups with all the products that they might need
IBM(Computers)
General Motors(Vehicle Market)
Coca-Cola(Drink Market)
Undifferentiated marketing
Differentiated marketing
Large firms can cover a whole market in two broad ways
Undifferentiated marketing
The firm ignores segment differences and goes after the whole market with one offer
It designs a product and marketing programme that will appeal to the broadest number of buyers
The firm ignores segment differences and goes after the whole market with one offer
It relies on mass distribution and mass advertising
It aims to endow the product with a superior image in people’s mind
The narrow product line keeps down costs of:
R & D
Advertising
Production
Inventory
Transportation
Marketing Research
Product Management
Differentiated marketing
Firm operates in different market segments and designs different products for each segment
General Motors produces cars for;
PursePurpose
Personality
IBM offers many hardware and software packages for different segments in the computer market
Targeting failuresTargeting failures
Levi’s
It had defined its target market as college students in the age group of 15 to 25 years
Levi’s had assumed that a sizeable group of this description would be able to afford the price tag of Rs. 999 to Rs.2,295 willing to buy the jeans at those prices
The number of consumers who could afford the price tag was far less then they had assumedLevi’s failed to define correctly what constituted its target market and what constituted its size.
Targeting failuresTargeting failures
Reebok
Reebok entered India, aiming at the segment with Rs.5,00,000 plus annual income that was generally referred to as high end segment of the Indian footwear market with the price tag between Rs.1300 to Rs.6,500. Volumes were not forthcoming.
Reebok shifted to the next lower segment and introduced its new range CLASSIC, at a comparatively more affordable price of Rs.900 per pair. Sales picked up.
Targeting failuresTargeting failures
Pierre Cardin
It misconstrued the well to do among the Indian middle class as its target
The brand image strongly associated with exclusive apparel the targeting became totally faulty. It was a super luxury apparel brand
The middle class dare not look at a gown that costs Rs.2000 plus, the super affluent found the price too low for their status
The very idea of a classy French Label at affordable prices – was a contradiction in terms, a contradiction with the brands perceived luxury position
POSITIONING STRATEGIES
PositioningPositioning
Is developing a distinct image for the product or service inIs developing a distinct image for the product or service in
the mind of the consumer, an image that will differentiate thethe mind of the consumer, an image that will differentiate the
offering from competing ones and squarely communicate tooffering from competing ones and squarely communicate to
consumers that the particular product or service will fulfillconsumers that the particular product or service will fulfill
their needs better than competing brands their needs better than competing brands
5151
Positioning-principlesPositioning-principles
• 1) Communicating the benefits that the product will provide 1) Communicating the benefits that the product will provide rather than the product’s features (consumers do not buy drill rather than the product’s features (consumers do not buy drill bits-they buy ways to make holes)bits-they buy ways to make holes)
• 2) Because there are many similar products in any market 2) Because there are many similar products in any market place, an effective positioning strategy must develop and place, an effective positioning strategy must develop and communicate a ‘unique selling propositiocommunicate a ‘unique selling proposition’n’
• 3) Most new products introduced by marketers( new flavors, 3) Most new products introduced by marketers( new flavors, sizes) fail to capture a significant market share and are sizes) fail to capture a significant market share and are discontinued because they are perceived by consumers as ’me discontinued because they are perceived by consumers as ’me too’ products lacking a unique image or benefit too’ products lacking a unique image or benefit
MARKET POSITIONING
AFTER IDENTIFYINGTHE TARGET MARKET
THE MARKETER POSITIONSTHE PRODUCT/SERVICE IN THE TARGET CONSUMERS
MIND
BY CREATING AN IMAGE INTHE CONSUMERS MIND OF
THE PRODUCT/SERVICE
SINCE CONSUMERS USE IMAGES WHILE PURCHASING
A PRODUCT/SERVICE
BRANDS HAVE A POWERFULINFLUENCE ON CONSUMERS’
MINDS
THE MARKETER GENERALLYUSES ADVERTISING TO BUILDA BRAND/CORPORATE IMAGE
ADVERTISING IS USED TOMOULD AND REINFORCE THE BRAND CORPORATE
IMAGE
POSITIONING STRATEGIES
HEALTHDRINK
MARKET
COMPLANCOMPLETE PLANNED
FOOD
HORLICS“THE GREAT
NOURISHER” WITH EXTRA CALCIUM
BOURNVITA
“HEALTH STRENGTH & ENERGY” CONTAINSPROTEINS, VITAMINS
MINERALS CARBOHYDRATES
BOOST ENERGY AH ENERGY
VIVA “DOUBLE ACTION DRINK”
Sl.
No
POSITIONING STRATEGY
DEFINITION ADVERTISING CLAIMS
1. POSITIONING CUSTOMER BENEFITS
IT ASSOCIATES A BRAND/PRODUCT WITH
CUSTOMER BENEFITS
THE STRATEGY IS MORE COMMON IN ALL THE PROIDUCT CATAGORIES. ADVERTISING CLAIMS A BENE FIT
2 POSITIONING BY PRICE, QUALITY
A PRODUCT OR SERVICE IS HIGHLIGHTED IN TERMS OF SERVICE, FEATURES OR PERFORMANCE – A HIGHER PRICE TO COMMUNICATE THAT THEY PROVIDE QUALITY
ADVERTISING CLAIMS VALUE FOR MONEY
APPROACH TO POSITIONING STRATEGIES
APPROACH TO POSITIONING STRATEGIES
3 POSITIONING BY APPLICATION
ASSOCIATING THE PRODUCT OR SERVICE
WITH A USE OR APPLICATION
ADVERTISING CLAIMS THE USE OR APPLICATION OR SERVICE
4. POSITIONING BY PRODUCT USER
ASSOCIATING THE OR SERVICE WITH A USER OR CLASS OF USERS
ADVERTISING CLAIMS THAT CINE STRARS OR SPORTS STARS ARE USING THE PRODUCT
APPROACH TO POSITIONING STRATEGIES
5. POSITION BY
PRODUCT CLASS
ASSOCIATING THE PRODUCT OR SERVICE
IN A PARTICULAR PRODUCT CLASS
ADVERTISING CLAIMS WORLD CLASS
PRODUCTS
6. POSITIONING BY CULTURAL SYMBOLS
ASSOCIATING CULTURAL SYMBOLS WITH THE PRODUCT OR SERVICE TYO DIFFERENTIATE FROM COMPETITORS
ADVERTISING CLAIMS AS ROYAL
7. POSITIONING BY COMPETITOR
ASSOCIATING WITH
COMPETITOR PRODUCT BRAND BY COMPARISION
ADVERTISING CLAIMS COMPARES WITH COMPETITORS BRANDS
DETERMINING THE COMPETITIVE POSITIONING STRATEGY
STEP-I IDENTIFY THE STRATEGIC GROUP COMPETING IN THE MARKET
STEP-IIUNDERSTAND THE PERCEPTION OF COMPETITIVE BRANDS OF STRATEGIC GROUP
STEP III DETERMINE CUSTOMER’ NEEDS AND ASPIRATIONS
STEP- IV
DEVELOP TWO OR MORE POSITIONING STRATEGIES AND SELECT THE BEST ONE FOR ADVERTISING CAMPAIGN
STEP- V PERCEPTUAL MAPPING
Personal soap
Family soap
LuxuriousValue for money
.Cinthol.Liril
Lux.Camay.
. Evita
Le Sancy
Moti
Rexona .. .
Perceptual Map of Eight Leading Brands of Toilet Soaps
PERCEPTUAL MAP FOR SOFT DRINKS
COLA
NON COLA
DIET NON DIET
DIET PEPSI
TAP
FRESCA
DIET 7-UP
SPRITE
7 UP
COCA-COLA
PEPSI
MARUTI’S STP FOR ZEN
Segmentation & Targeting
Executive class in the cities as a distinct segment among passenger car buyers
This group formed the core of the compact car segment
It was owner driven segment, mostly
It looked for driving comfort much better than what was provided by Maruti 800
MARUTI’S STP FOR ZEN
Positioning Maruti positioned Zen as “an executive car for city drive”
The offer
It tried to provide in the car what this segment looked for– mainly a good driving positioning lending to smooth driving and a good pick up to acceleration
An example of effective STP
Maruti ensured that the three STP steps connected rightly and that the offer marched the STP Strategy . It ensured that the value proposition too matched the STP and the offer actually offered on the value proposition and the communication conveyed the adequately
HUNDAI’S STP FOR SANTRO
Segmentation & Targeting
Hundai proceeded with its STP Strategy more or less in the same way as Maruti did
Hundai found that the executive group within the compact segment, was a good target to aim at
It also found that the segment matched its own capabilities and ambitions
HUNDAI’S STP FOR SANTRO
Positioning Hundai positioned Santro as a “safe high proof , executive car for city drive with revvy engine
The offer
Hundai saw to it that its offer not only matched the Zen, but delivered better than Zen on certain vital parameters
…Upgraded technology … Superior power and fuel efficiency … More modern design High roof (the tall boy) … Higher ground clearance … More spacious interiors … The safest car in its category
An example of effective STP
The STP had smoothly led to the value proposition and the offer delivered on the value proposition. The buyers did perceive it as a good city car as its torque was nicely matched to the speeds envisaged on city drives. The good revvy nature of the engine contributed to superior performance
(d) Differentiation
DIFFERENTIATION STRATEGIES
PRODUCT DIFFERENTIATION
STRATEGY FOR
SHAPING DEMAND IN THEIR FAVOUR
RETAINING CUSTOMERS
THROUGH ADVERTISING & SALES PROMOTION
OFFERING DIFFERENT VERSIONS OF THE SAME PRODUCT
PRODUCT DIFFERENTIATION
DIFFERENTIATION – ORIENTED STRATEGY
Differentiation – Oriented Strategy with Emphasis on Product
Differentiation – Oriented Strategy with Emphasis on Distribution
Differentiation – Oriented Strategy with Emphasis on Promotion
Differentiation – Oriented Strategy
with Emphasis on Product
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON PRODUCT
Product Attributes
Functionality
Packaging Convenience
Service
Experience
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
Functionality (Microsoft)
Microsoft is synonymous with computer operating systems. It commands 70 % of the revenue generated world wide simply because of its product design and functionality
The ongoing windows family commenced with Windows 98, moved on to Windows 2000, Windows XP and now to Windows Vista
Every new version carried substantial improvements/new features and gave vastly improved feature to the computer user
Windows Vista carried:
Windows Defender & Firewall Instant Search Internet Explorer 7 Aero Desktop Experience Windows Flip 3D Live Thumbernails Mobility Centre for Laptops tablet PC Support Meeting Space Media Centre Extenders Fax & Scan
Packaging Convenience : Firms capture new segments with Chotta Size
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
A bite of Cadburys at Rs.1
One dose of Nescafe at Rs.2
One spoon of Sunsilk at Rs.0.75
Chotta Coke at Rs.5
Chota Cooklite (200 ml) – Godrej at Rs.13
Strategic objective
--- Enhance the market penetration by capturing new segments --- Ramp up volumes --- Play a combination of differentiation and price oriented strategy COKE increased its customer base from 16 crores to 24 crores between 2003 and 2005; Sachets constitute more than 70 % of the total sales of the shampoo industry
Service---- Kingfisher Airlines
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
Kingfisher differentiates itself on service. Some of the special services on which Kingfisher bases its claim to uniqueness is highlighted below:
SERVICE AT THE AIRPORT
SERVICE ON BOARD
SERVICE ON REACHING THE DESTINATION
AT THE AIRPORT
Valet assistance
Available from the time you reach the airport till the time you check-in and on arrival at the destination airports
Check-in
Delay handling
Roving agents
.. Multiple check-in counters .. Presence of efficient staff
Translates into ..less waiting time at counters .. on time departures
… Efforts are made to minimize the inconvenience … Refreshments are offered in case the delay is more than one hour … Meals are offered in case of longer delays
Trained roving agents take care of check-in so that passengers need not wait at the check-in counter a
ON BOARD EXPERIENCE
In-flight entertainment
Guests have the option of Live TV, Fun TV, 10 Audio Channels, with choices appealing to each segments experience
Meal options
… Guests have the choice of opting for vegetarian or non vegetarian meals … Menus are designed considering the guest feedback and are frequently changed
World class crew
The crew undergoes rigorous training in safety, first aid, service delivery and personality development before they are cleared to take on the role of hosts on board
ON REACHING THE DESTINATION
Baggage delivery
… Endeavour the checked-in baggage with the passenger immediately on arrival at the destination
… Their representatives are available at the arrival lounge should their assistance be needed on account of bulky baggage
Delayed/missed baggage
In a situation of misrouted baggage, effort is made to locate and deliver the baggage as soon as possible and deliver is made at the airlines expense
Experience– The New Generation Coffee Cafes
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
The two main elements of the strategy adopted by the Coffee Cafes are:
(i) They choose the lifestyle oriented, well to do, urban consumers as their target, with youth/students as the dominant part.
(ii) They make coffee an experience and provide special “experience” to the chosen segment
(iii) The customers of these cafes do not see the coffee as a product or beverage, but as an experience
(iv) The integrate the ambience of the place with the coffee experience
Café Coffee Day Barista Coffee
Costa Coffee Barnie’s Coffee
Starbucks
Differentiating the experience in many innovative ways
They give the youths/students an impression that something is always happening in the coffee joints and they should be apart of it
Play music of their choice
For those focused on coffee proper, the innovation comes through product
The cafes nuance the coffee experience suiting the climate
Differentiation – Oriented Strategy
with Emphasis on Distribution
Differentiation – Oriented Strategy with Emphasis on DistributionITC’s e-Choupal
ITC’s e-Choupal is a village internet Kiosk serving 3 purposes
---- Provides information to farmers on crops/weather/prices ---- Sells a variety of products to them ---- Buys various farm products from them for ITC’s use
ITC developed the e-Choupal model to tackle the distribution challenge and prohibitive distribution costs arising out of
---- fragmented farms ---- weak infrastructure ---- involvement of numerous intermediaries
By utilizing the scope of IT, e-Choupal linked the firm directly with the ultimate buyer virtually eliminating wasteful intermediation and multiple handling and reducing transaction costs significantly
E-Choupal managed by Local farmers
(Village Sanchalaks)
Sanchalak aggregates the demand for
various products
E-mails the order to ITC
Items are picked up by the Sanchalak at the ITC warehouse hub and supplied to the
consumers
Or it is delivered to the villagers by the local
middleman (Samyojak) co-opted by ITC
The Sanchalak collects cash payment
and remits it to ITC
Differentiation – Oriented Strategy
with Emphasis on Promotion
L’OREAL
L’OREAL :The worlds biggest company in cosmetics also selling Maybelline cosmetics, Garnier Shampoos, Lancome perfumes
PROMOTION STRATEGY
… The L’Oreal range has premium position and is marketed through high power advertising
… Garnier is promoted using celebrity advertising
… Aishwarya Rai has been the Brand Ambassador
… The campaigns are aired during prime time on channels like Zee and Star
… The ads/message do not list out any product attributes; instead splashing the beautiful hair the celebrity film star just says “Because you are worth it”
DINESH SUITINGS
PROMOTION STRATEGY
… The differentiation is built around ‘prestige’ and high power advertising
… In its advertising campaign, an aura is built around the brand by using Sunil Gavaskar as the model.
… The brand and the prestige of the models are nicely combined in the ads.
… The punch line reads; “Dinesh suitings…. the world in your stride”
DINESH SUITINGS
Dinesh is not marketed on any utility or price plank
REID & TAYLOR
… Reid & Taylor also uses the ‘Prestige’ approach for differentiation, with even more telling effect
… Here James Bond is the prestige endorser
… The ad message links the prestige of Bond and the brand
--- Reid & Taylor…. The legend of a cloth
--- James Bond …. The legend of a man
--- Luxury Suitings….. Bond with the best
The suiting is a legend like the endorser, not a piece of cloth
PROMOTION STRATEGY
REID & TAYLOR
In the same product category of suitings
COCA-COLA
… The company has carried out a sustained high budget promotion effort over the decades
… Top rung film stars and sportsmen were consistently used inn its campaigns run through all possible media – TV, print, outdoors and events – to sustain the image built around the brand and keep it contemporary
… Coke was positioned as a welcome image rather than a drink
-- Coca-Cola makes good things better
--- Things go better with coke
--- It’s the real thing
Coke is presented more as a sensation than a product
PROMOTION STRATEGY
COCA-COLAProvides a classic example of a differentiation oriented marketing strategy. It has a great sway on the minds of millions of consumers round the globe
PEPSI
PEPSI Like Coke, Pepsi gives maximum thrust to promotion
… To counter the leader, new themes will figure from time to time in the promotion campaigns
… Pepsi is heavily banking on celebrity advertising and sponsorship of world sports events as its major marketing weapon
… Pepsi cashes in on the cricket frenzy using the cricketers and film stars to project their brand image
Neither Coke nor Pepsi pitch on the properties of their respective colas
PROMOTION STRATEGY
NIKE
NIKE
PROMOTION STRATEGY
… Kike has been projecting the image of a winner and high performer by using sports stars from Michael Jordan and John McEnroe in 1970s till Roger Federrer today
… Nike and success go together. That is the equation between the brand and whoever uses it
… You are made to feel that by wearing Nike, you are in the league of those very special sports personalities you admire
In addition to regular high budget ad campaigns, Nike puts its logo, the swoosh on every possible medium/vehicle--- MP3 players, watches, walkie talkies, and even portable heart monitors
The marketing is built wholly around brand name and promotion