Question #1 Response
According to the textbook, marketing strategy is a plan that is capable of creating value on a sustained basis, and it involves two major activities: (1) targeting a specific market segment and figuring out the desired positioning of the product in target consumers’ minds, and (2) Laying out the plan for various marketing activities, in an effort to achieve the desired positioning in consumers’ minds (Silk, 2006). Segmentation, Targeting, and Positioning (STP)
Segmentation, Targeting, and Positioning are grouped in the first stage of developing a marketing strategy because marketing is all about creating value for customers, and value is only created when customers’ needs are met (Silk, 2006). Thus STP serves as the pre-requisite to the development of the rest of marketing strategy (Silk, 2006). Segmentation:
According to professor Andrzejewski’s lecture marketing segmentation is “a process of dividing a larger market into smaller pieces based on one or more meaningful shared characteristics.” And characteristics that divide the market into groups are called segmentation variables, which usually include demographics, geography, psychographics, and behavior-based variables (Andrzejewski, 2011). Accurate marketing segmentation is crucial to the success of the marketing strategy just like a skyscraper needs a solid corner stone, because if the segmentation study does not reflect the real marketing segmentation, then the target market selection and product positioning will unlikely contribute to the success of the marketing strategy as a whole. Targeting:
The definition for targeting is “a process marketers evaluate the attractiveness of each potential segment, and decide in which segments they will invest resources to try to turn them into customers” (Andrzejewski, 2011). A successful segmentation study will identify multiple possible market segments that can be targeted, and firm’s selection on which segments to serve is critical because “the firm’s selecting a target market is similar to choosing the rules of the game, which is dictated by the customers.” (Silk, 2006) So before making the choice on target segments, firms should consider (1) firm’s strength, weakness, and competencies when facing competitions in the target market (2) firm’s corporate goals and the fit of the segment with these goals (3) if the firm has necessary resource to market successfully to the target segment (4) the need for appropriate collaborators to market successfully (5) the likely financial returns from the segment (Silk, 2006). Even though there may not be a segment that seems to be the best fit for all five criteria, firms should choose the market segment that it is most capable of playing under the rules set by customers. Positioning:
Positioning is defined as the process of “developing the image of the product in the mind of the customer relative to competition on important attributes.” (Andrzejewski, 2011). Positioning is extremely important not only because the image of the product in consumers’ minds will directly influence their purchasing decisions, but also because appropriate positioning can help the firm to gain more grips on the marketing mix (Silk, 2006). Product, Place, Promotion, and Pricing (4Ps)
According to the textbook “a product is not the thing itself, but rather the total package of benefits obtained by customers.” (Silk, 2006) Since marketing strategy’s main purpose is to create value for customers on a sustained basis, product serves as the vehicle that delivers value to customers simultaneously (Silk, 2006). Place: Marketing Channels
Marketing Channel is the set of mechanisms or the network via which a firm goes to market, which involves two major processes (1) channel design (2) channel management. Channel design deals with both the length and breadth of the...