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B207 Reading 4: Focusing an Offering - Coggle Diagram
B207 Reading 4: Focusing an Offering
1. Markets
Definition: A market is a group of people (consumers or organisations) who need and have the ability, willingness, and authority to purchase products in a product class.
Types: Includes Consumer Markets, Business Markets (producer, reseller, institutional, government), and Non-profit markets.
Diversity: Markets typically encompass a diverse group of people with similar overall needs but diverse characteristics and contexts (e.g., demographics, preferences, lifestyles).
2. Segmentation
Definition: The process of grouping customers in heterogeneous markets into smaller, more homogeneous segments with similar requirements and buying characteristics.
Consumer Segmentation Variables:
Demographic: Age, Gender, Income, Occupation, Family size, Education, etc..
Geographic: Country, Region, City, Climate, Population density, etc..
Psychographic: Personality, Lifestyle, Motivations.
Behavioural: Usage (volume/rate), Benefits sought, Price sensitivity, Loyalty.
Effective Segmentation Requirements (Kotler and Armstrong, 2016):
Measurable: Can measure size, buying power, and profiles.
Accessible (Assessable): Can be reached and served.
Substantial: Are large and profitable enough to serve.
Differentiable: Are distinguishable and respond differently.
Actionable: Can be targeted through tailored marketing programmes.
Modern Challenges: Some question the plausibility of coherent groupings, suggesting a shift to postmodern 'brand tribes'.
3. Targeting
Definition:
The process of focusing on one or more segment(s) that an organisation can serve most profitably; the segment identified as most likely to purchase the offering.
Selection Factors:
Draws on research and environment analysis, considering:
Customers' needs and wants.
Competitors (to identify competitive advantage).
Organisation's competencies and resources (to assess strategic windows/fit).
Types of Targeting Strategies:
Undifferentiated:
Making the same offer to the whole market (e.g., BBC News).
Differentiated
: Making different offers to separate market segments (e.g., Clarks Shoes).
Concentrated (Niche)
: Focusing on one or a few market segments (e.g., racehorse studs).
Customised:
One-to-one marketing, often combined with segment strategy (e.g., Mini car customisation)
Ethical Concerns:
Targeting certain segments (e.g., children with sugary snacks or the poor with high-interest loans) can raise ethical concerns.
4. Positioning
Definition:
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Purpose:
To differentiate an offering from competitors in the minds of customers.
Positioning Formula (Kapferer, 2012):
For... (target consumers)
Brand X is ... (competitive set and subjective category)
Which gives the most (promise or consumer benefit)
Because of ... (reason to believe / evidence)
Perceptual Positioning Maps:
Used by marketers to examine customers' perceptions of their offering against competitors' offerings.
Factors for Successful Positioning:
Clarity:
Clear identification of the targeted segment and differential advantage.
Consistency:
Enduring positioning so it becomes associated with the offering.
Credibility:
The positioning must be believable.
Competitiveness:
Must include a differential advantage over competitors.