Managing the Value Chain
Contents Introduction 3 Definitions 3 Market Segmentation 3 Value Chain Management 4 Supply Chain 4 Discussion& Conclusion 5 TESCO: A case study in supermarket excellence & Cluster-derived segmentation strategy of Kotler. 6 References 9
MVC-Portfolio1
Introduction
Recently in the global market dramatic changes have happened thanks to the segmenting and targeting the market. Firms realize that they cannot appeal to all customers in the market, or at least not in the same way! (Armstrong and Kotler, 2006) Technology improvements and market fragmentations bring the flood of customer demands which are not homogeneous anymore. So market offerings vary till they become able to fulfill the demands of customers (Baker, 2003). Thus strategies have been shifted from mass marketing to target marketing among companies (Armstrong and Kotler, 2006). For being able to compete with other rivals, the firms focus on the customers who are keen on buying the values that firms produce best. In this essay I am going to discuss the importance of market segmentation strategy for effective value chain management. First some definitions will be mentioned and then the importance of the matter from different authors will be discussed and I will conclude the research.
Definitions
Market Segmentation
Market segmentation means dividing a market into smaller groups (segments) of customers with similar needs and characteristics which will be served by a special strategy (Armstrong and Kotler, 2006). According to Kotler (1997) one of the most efficient ways of marketing strategies is segmenting the markets.
In supply chain producers treat customers in a way which can be varied between following strategies: 1. Customers are entirely homogeneous. 2. Customers are treated as individuals.
Considering customers in first group will result in mass marketing and second group will result in mass customization (Kotler, 1999). The two ends of this continuum
MVC-Portfolio1
Introduction
Recently in the global market dramatic changes have happened thanks to the segmenting and targeting the market. Firms realize that they cannot appeal to all customers in the market, or at least not in the same way! (Armstrong and Kotler, 2006) Technology improvements and market fragmentations bring the flood of customer demands which are not homogeneous anymore. So market offerings vary till they become able to fulfill the demands of customers (Baker, 2003). Thus strategies have been shifted from mass marketing to target marketing among companies (Armstrong and Kotler, 2006). For being able to compete with other rivals, the firms focus on the customers who are keen on buying the values that firms produce best. In this essay I am going to discuss the importance of market segmentation strategy for effective value chain management. First some definitions will be mentioned and then the importance of the matter from different authors will be discussed and I will conclude the research.
Definitions
Market Segmentation
Market segmentation means dividing a market into smaller groups (segments) of customers with similar needs and characteristics which will be served by a special strategy (Armstrong and Kotler, 2006). According to Kotler (1997) one of the most efficient ways of marketing strategies is segmenting the markets.
In supply chain producers treat customers in a way which can be varied between following strategies: 1. Customers are entirely homogeneous. 2. Customers are treated as individuals.
Considering customers in first group will result in mass marketing and second group will result in mass customization (Kotler, 1999). The two ends of this continuum
References: * Armstrong, G. and Kotler, P. (2006) Principles of marketing. 14thed. New Jersey: Pearson Prentice Hall. * Baker, M. (2003) The Marketing book. 5th ed. Oxford: Elsevier Butterworth-Heinemann. * Canever, M., Trijp, H. and Lans, I. (2007) Benefit-feature segmentation: a tool for the design of supply-chain strategy. Journal of Marketing Intelligence & Planning, 25(5), pp. 511-533. * Christopher, M. (1992), Logistics & Supply Chain Management, London: Pitman Publishing. * Kotler, P. (1997), Marketing Management: Analysis, Planning, Implementation, and Control, Prentice-Hall, Englewood Cliffs: NJ. * Kotler, P. (1999), Marketing Management: The Millennium, Prentice-Hall, Englewood Cliffs, NJ. * McDonald, M. and Dunbar, I. (2004), Market Segmentation: How to Do It, How to Profit from It, Oxford: Elsevier Butterworth-Heinemann. * Moris, T. (2004) TESCO: a case study in supermarket excellence [online] available from: http://www.coriolisresearch.com/pdfs/coriolis_tesco_study_in_excellence.pdf [accessed 6th Feb 2012] * Porter, M * Ramsay, J. (2005) The real meaning of value in trading relationships, International Journal of Operations & Production Management, 25(3), pp. 549, 2005. * Walley, K.E., Custance, P.R. and Parsons, S.T. (2000), “UK consumer attitudes concerning environmental issues impacting the agrifood industry”, Business Strategy and the Environment, 9(2), pp. 355-366. * Wedel, M. (1990), Clusterwise regression and market segmentation: developments and applications, PhD thesis, Wageningen University, Wageningen.