MARKETING STRATEGY

KEY CONCEPTS

S E S S I O N   T W O

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Mostafa Purmehdi

H  E  C    M  o  n  t  r  e  a  l

Five Natural Keys

O B J E C T I V E S

SEGMENTATION

Dividing a market into submarkets

Submarkets: Homogeneous groups

with similar buying behaviour

TARGETING

Selecting  Segments

O R   M A R K E T S   O R   C O N S U M E R S

POSITIONING

Personality of a brand, business, or product

TION

DO YOUR CONSUMERS PERCEIVE YOU AS 

DIFFERENT FROM COMPETING BRANDS ?

TIA

EREN

DIFF

INNOVATION

Offering a Change

P R O P O S I N G   S O M E T H I N G   N E W

Segmentation Variables

O B J E C T I V E S

SEGMENTATION

Segmenting a Magazine Market

• AGE
• GENDER
• EDUCATION
• LANGUAGE
• PERSONAL INTEREST
• LIFESTYLE

AM

EX-

PLE

Companies do not
 necessarily segment the same market in the same way.

VARIABLES

A N     I N T R O     T O

S  E  G  M  E  N  T  I  N  G

SOCIO

DEMO

GRAPH

-IC

Income, Age, Education, Net worth, Gender, Ethnic origin, Religion, Language,             Occupation, Marital              status, and family                  structure.

S E G M E N T I N G

V  A  R  I  A  B  L  E  S

GEOGRAPHIC

  Region of the world, 
  Country, Neighbourhood, 
  Postal code, Climate and
  Type of physical environment    

S E G M E N T I N G  V A R I A B L E S

PSYCHO

GRA-

PHIC

Consumer mindsets, 
values, opinions, 
interests and 
attitudes

BEHAVIOURAL

Needs, Expectations, Situations, and usage

S E G M E N T I N G   V A R I A B L E S

MARKET

Consumers and variables specific to markets

S E G M E N T I N G   V A R I A B L E S

VOLUME  AND PROFITABILITY

S E G M E N T I N G   V A R I A B L E S

SAME

F O R

BUSINESS

MARKETS

?

V   A   R   I   A   B   L   E   S

SOCIODEMOGRAPHIC

ECONOMIC

PSYCHOGRAPHIC    AND    LIFESTYLE

ORGANIZATIONAL

C U L T U R E

A N D

PROCUREMENT

P   O   L   I   C   Y

Targeting

O B J E C T I V E S

TARGETING

T  A   R   G   E    T   I    N   G

Selecting  exactly where the business wants to

C O M P E T E.

Targeting Decisions

A QUESTION OF PROFITABILITY

PROFITABILITY

• Segment size
• Growth
• Accessibility
• Competitive position
• Cost of adapting to target segments

Questions To Ask

1. is the segment large enough to profit us and our distributors at the same time?
2. how strong is the growth potential for the segment?
3. is there an economical way  of reaching the segment through distribution (Place) and Promotion?
4. are we going for 15%  of a market with no competition or 60% of a market with four monster competitors?
5. how much money do I need to invest to reach that segment after all?

MASS MARKETING

SEGMENT    MARKETING

NICHE   MARKETING

PERSONALIZED

M A R K E T I N G

niche is where giants leave SMEs alone

[  segmentation pushed to extreme  ]

N I C H E 

M A R K E T I N G

• Targets only winter apparel segment
• Sells 15 000 coats a year
• Distributes in 75+ specialized boutiques
• Annual sales: $10+ million

R E F O C U S I N G

Wholesaler and retailer

Arrival of big-box stores

Focus only on contractors

Contractors: 85% of annual $125 million sales

Acquired by RONA in 2006

Positioning and Differentiation

O B J E C T I V E S

POSITIONING

Personality of a brand, business, or product

I N   T H E   E Y E   O F   C O N S U M E R

AWARENESS

IF THEY DON'T KNOW YOU

Y O U   H A V E   N O

A  C  T  U  A  L

POSITIONING

A  C  T  U  A  L

POSITIONING

D E S I R E D

POSITIONING

• Identity
• Personality
• Image

EXAMINE POSITION OF EXISTING BRANDS

USE DIFFERENTIATION TO POSITION YOURSELF

Title Text

I N   Q U E B E C

Mass marketing

VARIETY

QUALITY

PRICE

PROXIMITY

CUSTOMER SERVICE

VARIETY AND SERVICE AT LOW PRICES!

EXISTING BRANDS

Name Change

Repositioning

Withdraw Brand

GOOD POSITIONING

CONSISTENT WITH TARGETING

REPRESENTS VALUE FOR CUSTOMERS

TANGIBLE  OR  SYMBOLIC

GOOD COMMUNICATION

DIFFERENTIATE

If you don't want to compete solely on Price

Consumers usually buy the cheapest of the similar products.

DIFFERENT

AND

MORE DESIRABLE

H   O   W   ?    B   E   C   O   M   E

Product

variety, quality, technology, guarantee, packaging, additional maintenance, repair, installation, training services, after sales services

Place

geographical coverage, type of intermediaries involved, business image, business hours

Price

billing and payment terms, credit, volume, discount conditions

People

reliability, speed, simplicity, flexibility, courtesy, accessibility

BUSINESS

OFFERING

CUSTOMER

NEEDS

COMPETITOR'S

OFFERING

D I F F E R E N T I A T I O N   B E S T   P R A C T I C E

HIGH-END COFFEE PRODUCTS

D I F F E R E N T I A T I O N   B E S T   P R A C T I C E

H  I  G  H   -   E  N  D

COFFEE PRODUCTS

M I D   -   R A N G E

COFFEE PRODUCTS

Should you differentiate if your advantage is low cost?

Innovative Marketing

O B J E C T I V E S

INNOVATION

N E C E S S I T Y   O R    L U X U R Y ?

TO ELIMINATE WEAKER COMPETITORS

INNOVATION

CUSTOMER   VIEWPOINT

R E A L L Y   M A T T E R S