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Marketing case study - Coggle Diagram
Marketing case study
Targeting (evaluating market segments)
Segment size and growth
: Analyze current sales, growth rates and expected profitability for various segments. Large, fast-growing segments may not be ideal for smaller companies which may lack the skills and resources needed.
Segment structural attractiveness
: A segment is less attractive if it already contains many strong and aggressive competitors or if it is easy for new entrants to come into the segment.
Company objectives and resources
Product variability
: commodities vs differentiated products
Product's stage in PLC
Introduction: create awareness and trial
Growth: maximise market share
Maturity: maximise profits while defending market share
Decline: reduce expenditure and maintain, reposition, harvest or drop the product
Segmentation
Demographic
: Age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, generation
Psychographic
: Lifestyle, personality
Geographic
Behavioural
: Occasions, benefits sought, user status, usage rate, loyalty status
Levels of segmentation
Segmented
: target several market segments and design separate offers for each
Disadv: requires extra marketing research, forecasting, sales analysis, promotion planning, and channel management
Disadv: too many overlapping brands can confuse customers, and different brands might cannibalize each other’s customers
Niche
: instead of going after a small share of a large market, a firm goes after a larger share of one or a few smaller segments or niches
Adv: market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably
Adv: strong market position because of its greater knowledge of consumer needs in the niches it serves
Disadv: larger competitors, threatened by successful nichers, may decide to enter the same segment with greater resources. Or they may attack or even acquire nichers to safeguard their own markets
Mass
: ignore market segment differences and target the whole market with 1 offer, focusing on consumers’ common needs
Disadv: difficult to develop a product or brand that will satisfy all consumers
Disadv: difficult to compete with more-focused firms that do a better job of satisfying the needs of specific segments and niches
Micro
: tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments
Disadv: local marketing can drive up manufacturing and marketing costs by reducing the economies of scale
BCG matrix
Question mark
(high market growth rate, low market share)
Dog
(low market growth rate, low market share)
Star
(high market growth rate, high market share)
Cash cow
(low market growth rate, high market share)
Strategies for resource allocation
Hold
: preserve market share from cash cow and use cash flow for other SBUs
Harvest
: increase short term cash return. appropriate for all SBUs except stars
Build
: provide financial resources if question mark has potential to be a star
Divest
: get rid of dogs
SWOT
Weaknesses
Obsolete products
High labour cost
Inadequate financing capabilities
Weak market image
Product line too narrow
Strengths
Customer loyalty
Modern production facilities
Financial resources
Patents
Cost advantages
Opportunities (see expansion strategies)
Enter new markets
Acquire firms with needed technology
Add to product line
Threats
Likely entry of new competitors
Adverse government policies
Changing buyer preferences
Product/ market expansion strategies
Market development
(existing products, new market): Identify new demographic or geographic markets
Product development
(new products, existing market): New styles, flavours, colours, or modified products
Market penetration
(existing products, existing market): Add new stores in current market areas, improve advertising, prices, service or store design
Diversification
(new product, new market): Start up or buy new businesses
Brand strategies
Brand extension
(existing brand names extended to new or modified product categories)
Compared with building new brands, extensions can create immediate
new-product familiarity and acceptance at lower development costs
The extension may confuse the image of the main brand, e.g. it’s weird for Tiger Beer to release Tiger Water or SMU to have Singapore Management Kindergarten
A brand name may not be appropriate to a particular new product, even if it is well made and satisfying
if a brand extension fails, it may harm consumer attitudes toward other products carrying the same brand name
Multibrands
(new brand names introduced in the same product category
E.g. in USA, PepsiCo markets at least 10 brands of carbonated soft drinks (Pepsi, Sierra Mist, Mountain Dew, Manzanita Sol, Mirinda, Tropicana Twister, Mug root beer, Paso de los Toros, Stubborn Soda, and Caleb’s Cola)
Can establish
different features that appeal to different customer segments
, lock up more reseller shelf space, and capture a larger market share
However, each brand might obtain only a small market share, and none may be very profitable.
The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level
Line extension
(existing brand names extended to new forms, sizes, and flavours of an existing product category)
Low-cost, low-risk
way to introduce new products
Meet consumer desires for variety
Use excess capacity
Command more shelf space from retailers
An overextended brand name might cause consumer confusion or lose some of its specific meaning
New brands
(new brand names in new product categories)
E.g. Toyota created Lexus to target luxury car consumers
Offering too many new brands can result in spreading of resources too thin
Positioning
Identify and select competitive advantage: high quality, fast delivery, low price, excellent service, unique features
Communicate USP (more for more, less for much less, etc.)
NEW
product pricing strategies
Market skimming
: Setting a High Price for a New Product to “Skim” Maximum Revenues from the Target Market. Competitors Shouldn’t be Able to Enter Market Easily and Undercut the High Price
Market penetration
: Setting a Low Price for a New Product in Order to “Penetrate” the Market Quickly and Deeply. Market Must be Highly Price-Sensitive and Costs Must Fall as Sales Volume Increases
Marketing myopia
= failure to understand how products/ services solve customers’ problems (solution: shift to market-orientation)