Targeting and Positioning .

 TARGETING :

A Target market is a group of customers towards which a business has decided to aim its marketing efforts and ultimately its merchandise. 

A well-defined target market is the first element to a marketing strategy.

STRATEGIES OF TARGET MARKETING:



1.UNDIFFERENTIATED (MASS) MARKETING :

This approach views the market as one group with no individual segments, therefore using a single marketing strategy. 
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. 

It is the type of marketing (or attempting to sell through persuasion) of a product to a wide audience. 
The idea is to broadcast a message that will reach the largest number of people possible. 

Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience.
 

SUITABILITY : 

1. This strategy may be useful for a business or product with little competition where there is no need to tailor strategies for different preferences. 

2. In essential product markets like Rice , Kerosene etc .

3. Companies entering into the market at very late stage of PLC .

4. Uniform Products .


BENEFITS OF MASS MARKETING :


1. Wide audience - 
Since the target audience is broad, the number of successful hits is high despite of the low probability of a single person turning up.
2. Less risky - 
If all the efforts in one particular area goes in vain, still the eventual loss is less compared to a loss in the narrowly focused area.
3. Low Costs -
  • Production costs per unit are low on account of having one production run for homogeneous product.
  • Marketing research cost and advertising cost are relatively low.
  • Higher potentials of sales volume and efficiency of scale in a much larger market.  

2. DIFFERENTIATED MARKETING STRATEGY :

This strategy  the company decides to provide separate offerings to each different market segment that it targets.Each segment is targeted uniquely as the company provides unique benefits to different segments. It increases the total sales but at the expense of increase in the cost of investing in the business.

It is also called multisegment marketing and as is clearly seen that it tries to appeal to multiple segments in the market. 
SUITABILITY : 

1. This approach is used if company needs to focus on two or more well defined market segments and want to develop different strategies for them. 
LIMITATIONS -

1. Risk involved in this strategy is the extra cost in marketing research , product development and various other costs.

2. Higher promotional budgets.


3. CONCENTRATED (NICHE) MARKETING STRATEGY :

This approach focuses on selecting a particular market niche on which marketing efforts are targeted. 

The firm is focusing on a single segment so business can concentrate on understanding the needs and wants of that particular market intimately. 
EXAMPLES--
1. Fast-food Industry-- Subway, and Quiznos. 
(Major players who are aiming at the “sandwich eater” target audience. )


SUITABILITY :

1. It is suitable for small firms as they benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms.
ADVANTAGE-
1. Operating Economies of scale because of the specialization .



4. MICRO MARKETING STRATEGY :
A marketing strategy in which advertising efforts are focused on a small group of highly-targeted consumers. 

Micromarketing requires a company to narrowly define a particular audience by a particular characteristic, such as ZIP code or job title, and tailor campaigns for that particular segment.


EXAMPLE -
1. VESPA 
2. An early example was a Xerox campaign the featured a brochure mailed to a single recipient and featuring the photos and features of the exact automobile model of interest to the recipient.

 PATTERNS OF TARGET MARKETING: 

 



1.Single-segment Strategy - 

One market segment (not the entire market) is served with one marketing mix.  

It is also known as a concentrated strategy.  

A single-segment approach often is the strategy of choice for smaller companies with limited resources.The company may adopt this strategy if it has strong market position, greater knowledge about segment-specific-needs, specified reputation and probable leadership position.

USE-
The company uses this strategy when it produces a typical product for a single type of market like plasma TV. 


EXAMPLES-
Companies like Allahabad Law Agency (only law books) and BPB publications (only Computer books) . 


2. Selective specialization- 

This is a multiple-segment strategy, also known as a differentiated strategy or as multistage coverage because different segments are sought to be captured by the company. 

The company selects a number of segments each of which is attractive, potential and appropriate. There may be little or no synergy among the segments, but this strategy has the advantage of diversifying the firm’s risk.

Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary.

If the company  produces , two different types of products for two different types of markets, then it can be cited as  Selective Segment Specialisation strategy. 

Example,  Bata shoes were mostly in the popular segment until beginning of 1990s. Then, it turned itself into premium segment while still retaining the appeal of popular segment. The taking of select segments of shoe market could not help Bata to gain full control of market. After 1995, it has come back again to the popular segment.



3.Product Specialization- 

The firm specializes in a particular product and tailors it to different market segments.

Product specialisation occurs when a company sells certain products to several different types of potential customers.

If the company produces only a particular type of product like toaster that is consumed by all type of people, they  the company uses Product Specialisation strategy. 

Product specialisation promises strong recognition of customer within the product areas. Super Precision Components supply small nuts and screws for use in military, industry and daily use.


4.Market specialization- 

The firm specializes in serving a particular market segment and offers that segment an array of different products.

Here the company takes up a particular market segment for supplying all relevant products to the target group. In our example, the company X can implement Market Specialisation strategy by producing all sorts of home appliances like TV, washing machine, refrigerator and micro oven for middle class people.

Here the chosen segment is the middle class and the firm specializes in that market only. 
EXAMPLE-
Sudha Publications Pvt. Ltd. publishes and sells books for the students and job-hunters that include competition books (CAT, IIT-JEE, IAS), general knowledge books and personality development books.


5.Full market coverage - 

The firm attempts to serve the entire market. 

This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.


POSITIONING :

A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer.  

Positioning is the development of a service and a marketing mix to occupy a specific place in the minds of customers within target markets.


Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. 

Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. 

STEPS IN POSITIONING STRATEGY :

IT CONSISTS OF 4 STEPS :

STEP 1. IDENTIFYING CUSTOMER VALUE DIFFERENCES :

When a company can position its product or higher value brand as a superior alternative that delivers higher value to competitors ,the company  is believed to have created competitive advantage for the brand in the market.

This uniqueness is  DIFFERENTIATION .

Differentiation is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products.

COMPANIES marketing offer can be DIFFERENTIATED on the basis of :

1. PRICING

Company can differentiate their business through their pricing strategy. 

By pricing the products or services below that of the competition, company can cut into their market share by stealing some of their customers. If employing a low-price strategy, company still has to remain profitable.

Higher pricing can help  cultivate an image of quality or prestige.If company offer higher prices, there is a need to also offer additional services to attract customers, such as free delivery or extended business hours.

 

2. PRODUCTS OR SERVICES

Another way to stand out from the competitors is to offer different products or services than the competition. 

For example, being the first in the  town to open a gourmet coffee shop or a Thai restaurant. 

The key to this type of strategy is to conduct market research to ensure that the unique products or services will be accepted by the local community. 

Company can also expand your product mix to include items that the competitors do not carry.

3. EXPERTISE

The personal or business experiences or credentials may allow company to market their expertise. 

EXAMPLE 
The company may be the only florist in the area with an advanced horticultural degree .

4. FEATURES
 
Any additional features being offered on top of the product becomes a plus point for the customer. 
 
Example -
 
Mobile phones, handsets or any technology product. They are differentiated mainly by the number of customizations or the additional features that they offer. Thus features can be a form of Product differentiation.
 
4. PERFORMANCE QUALITY – 

Performance increases price.  

So BMW is costlier than other cars . Because it has superior performance.

Competition can present a product which does not perform as well but is available at half the price. 
Some of the customers might shift to the competition. This is not true for all customers. Some customers will be looking out for the superior quality products only. 

Thus company can do product differentiation on the basis of the performance of your product.

 
 


STEP 2. CHOOSING THE RIGHT COMPETITIVE ADVANTAGE :
 
A company must decide  " How many differences to promoteand which differences to promote " .
 
It must decide the best price for the benefits added .




STEP 3. DEVELOPING A POSITIONING STATEMENT :

The positioning statement should be an honest reflection of the company's product, service, or brand. 
 
The positioning statement can be :

1. For (target audience) who wants/needs (reason to buy your product/service/brand), the (product/service/brand) is a (frame of reference) that provides (your key benefit). Unlike (your main competitor), the (product/service/brand) provides (your key differentiator).

2. For (target audience), (brand) is the (frame of reference) that delivers (benefit/point of difference) because only (brand name) is (reason to believe).

Developing a positioning statement means completing the seven factors-

1. Target Audience –
  
The demographic or psychographic description of the desired customer. This is the product, service, or brand is intended for, and it includes customers who most closely represent the product, service, or brand’s most fervent users. Be specific.
 
2. Reason to Buy – 
 
Why would the customers want it?
Is it faster, better, cheaper, sexier, cooler, more convenient?
What are they looking for that they cannot find on the market?
 
3. Product/Service/Brand – 
 
What company is marketing.  Is it the product or service itself? Or, is it the company?
 
4. Frame of Reference –
 
The category or market in which the product, service, or brand competes. 
Establishing a frame of reference helps provide context for the brand and relevance to the customers. 
 
The typical mistake here is to create a frame of reference people don't understand. Just say what it is - a phone, a luxury car, security software, a bank, yogurt, whatever.
 
5. Your Main Competitor – 
 
Who are customers buying from today? 
There always is, even if it's a customer building/doing it themselves or using a combination of products.
 
6. Key Benefit –  
The most compelling and motivating benefit your brand offers to the target audience .

7. Key Differentiator – 
 
How the company is better and different relative to their competition? 
 
STEP 4. COMMUNICATING THE CHOSEN POSITION :
 
Communication to the target audience through integrated marketing communication  :
 
  • Advertising
  • Sales Promotion
  • Direct Selling
  • Publicity.