marketing strategy tools

MARKETING STRATEGYTOOLS

We must plan for the future, because people who stay in the present will remain in the past.

Abraham Lincoln

Table of contents

1. The Marketing Mix2. Market Segmentation3. The Product Life Cycle4. The Sales Funnel5. The Product Diffusion Curve6. The Ansoff Matrix7. The Brand Pyramid8. Kapferer's Brand Identity Prism9. The Buy-Sell Hierarchy

The Marketing Mix

The Marketing Mix:Product

• What does the customer want from the product/service? What needs does it satisfy?

• How and where will the customer use it?• What does it look like? How will customers

experience it?• What size(s), color(s), and so on, should it be?• What is it to be called? • How is it branded?• How is it differentiated versus your

competitors?• What is the most it can cost to provide, and

still be sold sufficiently profitably?

The Marketing Mix:Price

• What is the value of the product or service to the buyer?

• Are there established price points for products or services in this area?

• Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?

• What discounts should be offered to trade customers, or to other specific segments of your market?

• How will your price compare with your competitors?

The Marketing Mix:Promotion

• Where and when can you get across your marketing messages to your target market?

• Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing mailshot? Through PR? On the Internet?

• When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?

The Marketing Mix:Place

• Where do buyers look for your product or service?

• If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?

• How can you access the right distribution channels?

• Do you need to use a sales force? • What do you competitors do, and how can

you learn from that and/or differentiate?

Other Marketing mix models:

• Boom and Bitner's 7Ps: which include the first 4 Ps, plus people, processes and physical layout decisions.

• is Lauterborn's 4Cs: It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion).

Market Segmentation

Market Segmentation

Market segmentation is the process that companies use to divide large, heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs.

Market Segmentation

• Segmenting consumer markets

• Segmenting business markets

• Segmenting international markets

• Requirements for effective segmentation

Market Segmentation Segmenting Consumer Markets

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Market Segmentation Segmenting Consumer Markets

Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities.

Market Segmentation Segmenting Consumer Markets

Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

Market Segmentation Segmenting Consumer Markets

Income segmentation divides the market into affluent or low-income consumers

Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits.

Market Segmentation Segmenting Consumer Markets

• Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups .

• Gender segmentation divides the market based on sex (male or female)

Market Segmentation Segmenting Consumer Markets

Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product

• Occasions • Benefits sought • User status • Usage rate • Loyalty status

Behavioral Segmentation Breakdown

Market Segmentation Using Multiple Segmentation Bases

• Multiple segmentation is used to identify smaller, better-defined target groups.

• Geodemographic segmentation is an example of multivariable segmentation that divides groups into consumer lifestyle patterns.

Market Segmentation Segmenting International markets

Geographic location Economic factors

Political-legal factors Cultural factors

Market Segmentation Segmenting Business Markets

Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries.

Market Segmentation Requirements for Effective Segmentation

To be useful, market segments must be:

• Measurable• Accessible• Substantial• Differentiable• Actionable

The Product Life Cycle

The Product Life CycleDevelopment stage

• the product goes through testing and a prototype is developed.

• This is after considerable market research to identify consumer needs and wants.

• If the product is deemed commercially viable, may be put into mass production and launched.

The Product Life CycleIntroduction stage

•  The most expensive stage

• The size of the market is small

•  Means sales are low• The costs are very

high

The Product Life CycleGrowth stage

•  Strong growth in sales and profits.•  The profit margins will increase.• Invest more money in the

promotional activity to maximize the potential of this growth stage.

The Product Life CycleMaturity stage

•  The product is established.• The aim is now to maintain the

market share.• the most competitive time for most

products. •  need to invest wisely in any

marketing process.

The Product Life CycleMaturity stage

• The market for a product will start to shrink.

• Consumers are switching to a different type of product.

• This decline may be inevitable.•  That is possible to make some profit

by switching to less-expensive production methods and cheaper markets.

The Sales Funnel

The Sales Funnel

What is it?• A sales funnel is a visual

representation of the steps required to sell your products or services.

• That should reveal how many prospects you have in each stage of your sales cycle, and also detail your conversion rates for each stage.

The Sales FunnelMeasures

• Number of opportunities in your funnel (#). You should also know the rate at which you are acquiring these opportunities – or arrival rate.

• The total possible value of every deal in your funnel – or funnel value ($).

• Average amount of time prospects are in the sales funnel until they are acquired - or flow rate (days).

• Average percentage of closes that your team effectively navigates through your funnel - or win rate (%).

The Product Diffusion Curve

The Product Diffusion Curve Innovators

• know consumers who are willing to take a risk on a new product.

• They Represent the first 2.5% of people to adopt a new product.

• They'll most likely be knowledgeable and self-confident.

The Product Diffusion Curve Early Adopters

• Members of this group gauge the response of the Innovators before rushing in purchasing a new product.

• They'll probably be educated and somewhat product savvy.

• They represent about 13.5% of the total consumer population.

The Product Diffusion Curve Early Majority

• They are more cautious and prefer to avoid the risk associated with purchasing an unproven product.

• They accept a product only after it has been approved by others.

• waiting for the recommendations or product endorsements.

• they represent 34% of consumers.

The Product Diffusion Curve Late Majority

• Members of this group are more skeptical.

• They are late to jump on board and do so only after a new product becomes mainstream.

• They represent about 34% of consumers.

The Product Diffusion Curve Laggards

• they generally do not accept a new product until more traditional alternatives no longer are available.

• They represent about 16% of consumers.

The Ansoff Matrix Understanding the Risks of Different Options

The Ansoff Matrix Market Development

• Target different geographical markets at home or abroad.

• Use different sales channels, such as online or direct sales if you are currently selling through the trade.

• Target different groups of people, perhaps different age groups, genders or demographic profiles from your normal customers.

The Ansoff Matrix Diversification

• This strategy is risky.• There’s often little scope for using

existing expertise or achieving economies of scale.

• Its main advantage is that, should one business suffer from adverse circumstances, the other is unlikely to be affected.

The Ansoff Matrix Market Penetration

• Advertise, to encourage more people within your existing market to choose your product, or to use more of it.

• Introduce a loyalty scheme.• Launch price or other special offer

promotions.• Increase your sales force activities.• Buy a competitor company.

The Ansoff Matrix Product Development

• Extend your product by producing different variants, or packaging existing products it in new ways.

• Develop related products or services (for example, a domestic plumbing company might add a tiling service – after all, if they’re plumbing in a new kitchen, most likely tiling will be needed!)

• In a service industry, increase your time to market, customer service.

The Brand Pyramid

The Brand Pyramid Level 1: Presence

• Customers are aware of your brand, but little else.

• .They may have tried your products and services before, but they have little or no emotional attachment to them.

The Brand Pyramid Level 2: Relevance

• customers start to think about whether the brand meets their wants and needs.

• It's here that they begin comparing the cost of your products with respect to the value these provide.

• Customers begin asking questions like:– "Does this brand fit my needs?"– "Is it in the right price bracket for me?" – "Is it worth it?"

The Brand Pyramid Level 3: Performance

• Customers begin comparing the brand with others, to see whether it delivers on its potential.

• They're also starting to associate the brand with a specific identity.

• They're beginning to recognize it and associate with it.

The Brand Pyramid Level 4: Advantage

• Customers have determined that there is a distinct advantage to using the brand, compared with others.

• They're also beginning to associate the brand with their emotions and with their sense of self.

The Brand Pyramid Level 5: Bonding

• Customers have established a bond with the brand.

• They have determined that cost, advantage, and performance are all at levels that they're happy with.

• They've also formed a strong emotional attachment to the brand.

• Customers at this level are also likely to be vocal advocates of the brand,

Kapferer's Brand Identity Prism

Kapferer's Brand Identity Prism:1. Physique

By the brand’s physique the physical appearance is meant. This includes a prototype of the brand: the product that represents the brand’s qualities.

Kapferer's Brand Identity Prism:2. Personality

 The brand personality connects the brand with human characteristics to differentiate. It is the way a brand Speaks to its customers.

Kapferer's Brand Identity Prism:3. Relationship

     Every brand tries to build a relationship with its customers. This relationship is more obvious for service brands, but product brands like Porsche and Morgan build relationships with their clients The question here is what role does the brand occupy in the relationship. It could be being a friend or being dominant.

Kapferer's Brand Identity Prism:4. Culture

The culture of the company is reflected by the values the brand is communicating. Values can be linked for example to the origin of the company and their heritage.

Kapferer's Brand Identity Prism:5. Reflection

The reflection of a brand can be seen as the typical user of the product it is the outward mirror of the brand. It therefore often gets confused with the target market.

Kapferer's Brand Identity Prism: 6. self-image

The self-image is the way customers see themselves when using the brand and how this makes them feel. 

The Buy-Sell Hierarchy

The Buy-Sell Hierarchy Level 1: Delivers a Commodity That Meets Specifications

• Customers consider you to be one of many suppliers.

• There's little sense of a relationship at this level.

• You have likely won this account based on price or availability.

• If a competitor makes a better offer, your customers will switch supplier.

The Buy-Sell Hierarchy Level 2: Delivers Good Products and Services

• Customers see you as a supplier of "good" but not "great" products.

• You've understood some of their needs,

• you can't stay at level 2 for long. Once your competitors learn about the new aspects of your product, they'll quickly follow suit.

The Buy-Sell Hierarchy Level 3: Provides Dedicated Service and Support

• You demonstrate your commitment to your customers by investing a lot of time in your relationships, and by providing close personal attention.

• competitors can still "up their game" and match your offering.

The Buy-Sell Hierarchy Level 4: Contributes to Business Issues

• Customers see you as an ally who helps them solve business issues, and helps them be more profitable.

• To reach this level, your customers must see the connection between your contribution and their success.

The Buy-Sell Hierarchy Level 5: Contributes to Organizational Issues

• You have truly become your customers' partner.

• You work closely together to solve pressing organizational issues, and they see you as an expert that they can't do without.

• you have an ironclad competitive advantage, because you provide solutions that robustly contribute to your customers' bottom line.

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