Marketing is simply creating value that satisfies a customer’s need and building strong customer relationships to capture value back in return.
There are several types of market segmentation.
- Geographic Segmentation: Divides the market based on geography (location). The market can be segmented into countries, regions or cities .
Example: Coca cola Ice bottle was only sold in Sahel, where people faced extremely hot weather temperatures on the beach.
- Demographic Segmentation : The market is divided into segments based on different demographic variables such as age, gender, income, occupation, education, religion, marital status, ethnicity and generation.
- Psychographic Segmentation: This type of segmentations relies on the psychology of the consumer. This is related to several factors such as social class, lifestyle, personality and characteristics
Example: While both cars target segments of the same income level, Volvo targets consumers who are interested in safety and are more family oriented, while BMW is more sporty and targets a segment that is living a more active lifestyle.
- Behavioral Segmentation: Segmenting the market according to consumer knowledge, attitudes, uses or response to products and loyalty to the product. EX: Toothpaste
Market Targeting & Positioning
- Mass marketing: The firm decides to ignore market segment differences and go after the whole market with one offer.
- Example: Chipsy
- Segmented marketing: The firm decides to target several market segments and designs separate offers for each
- Example: Samsung
- Niche marketing: The firm goes after a large share of one or a few segments or niches.
- Micro marketing: Tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups. (Dell, Nike- customers customize their own laptop/shoe)
Market and Industry Analysis : SWOT Analysis
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face. Strength & weaknesses are internal factors , which means that they’re related to what’s happening inside the company itself. However, opportunities and threats are external, since they deal with the market in general and how the company copes to the changing market environment
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can’t?
What do people in your market see as your strengths?
What factors mean that you “get the sale”?
Example: Competitive advantage of Careem? Usual promotion
What could you improve?
What should you avoid?
What factors lose you sales?
Example: why did Nokia fail?→ Because they failed in strategic planning
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale.
- Changes in government policy related to your field.
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- Local events.
Example: When Nestle water’s factory was burnt, Dasani used this opportunity to produce more to be available in the market and hence generate more profit.
What obstacles do you face?
What are your competitors doing?
Is changing technology threatening your position?
Example :introduction of Flo water is a threat for Nestle, Dasani and all the existing water brands. Just like how Careem and Uber are main threats for all the taxi drivers.
A competitive analysis helps the business identify ways through which it can differentiate itself from competitors. Competitive analysis involves identifying and evaluating competitors and evaluating their strategies to determine their weaknesses and strengths relative to your own.
Competitors can be:
- Direct: businesses offering similar products or services. For example, Burger King and McDonald’s.
- Indirect: businesses that offer slightly different products or services but target the same group of customers with the aim of satisfying the same need. For example, Mori Sushi and Pizza Hut. Both offer different products but ultimately satisfy the same customer need: hunger.
- Conduct research
- Gather competitive information
- Analyze competitive information
- Determine your own competitive position (the way your business will stand out)
Your analysis should address the following questions:
- Who are your competitors?
- What product/service do they offer?
- Who are their target markets? Do they target the same target market?
- Are they profitable?
- What is each competitor’s market share?
- What are their current strategies?
- What is there competitive edge?
- How do they market their product/service?
- How are they perceived by customers?
- What is each competitor’s weaknesses and strengths?
- What potential threats do competitors pose to your business?
- What potential opportunities can they make available to you?
Marketing Mix, Place
Place or distribution is how you plan on making your product or service available to customers. A product or service is made available through distribution channels. Distribution channels are the processes through which a product is moved from the producer to the consumer.
Distribution channels can be:
- Direct: involves distributing products directly from the manufacturer to the consumer/customer without the use of intermediaries.
- Manufacturer -> Consumer
- Indirect: involves distributing products through the use of intermediaries. Two types of indirect distribution channels:
- Manufacturer -> Retailer -> Consumer: in this channel the manufacturer sells goods to consumers through retailers.
- Manufacturer -> Wholesaler -> Retailer -> Consumer: in this channel, there are two intermediaries.
- Wholesalers: The party that buys large quantities of a product from manufacturers and sells it to retailers. Wholesalers sell goods to other businesses, they do not sell directly to consumers.
- Retailers: The organization that sells products directly to consumers and end users. Goods are sold in small quantities and for consumer personal use.
There are three main types of distribution strategies:
- Intensive distribution: products are sold through as many outlets as possible so that consumers find the product almost anywhere they go. For example, selling soft drinks.
- Selective distribution: using a limited number of outlets to sell the product. For example, the sale of cars through certain specified dealers.
- Exclusive distribution: an extreme form of selective distribution where only one or two distributors are granted the right to sell the product.
Marketing Mix, Promotion
Promotion is advertising a product or brand to generate sales and to create customer loyalty. It involves all the forms of communication an organization uses to establish meaning for its product or service and to influence the buying behavior of targeted customers.
The promotion mix is the specific blend of advertising, sales promotions, public relations, personal selling and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships.
There are five elements of promotion. A business can choose to use one or more to deliver clear and effective messages about their product/service to customers.
- Advertising: involves the use of mass media such as television, radio, newspaper, magazines, billboard, posters, brochures and direct mail. This type is promotion is paid for with little or no personal messages.
- Public relationships and sponsorships: tries to increase positive mention of the product through influential media outlets, which include newspapers, magazines, talk shows and social networks and blogs. Super users, or influencers, are used to test the product and speak positively about it.
- Personal selling: business representatives directly contact potential customers through phone calls, emails or in person.
- Direct marketing: telemarketing, customized letters, emails and text messages.
- Sales promotions: “buy one get one free” options, seasonal discounts, contests, samples and special coupons.