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MKTM028 Strategic Marketing For Generic Management

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Questions:

Learning Outcomes
 
On successful completion of the module, participants will be able to:
 
Knowledge and Understanding
 
a) Justify, using robust practical and theoretical evidence, the application of marketing across a variety of orgainisational contexts
 
c) Demonstrate knowledge applied to evaluate marketing practice in relation to the cross-functional aspects of business & management with the goal of enhancing long-term shareholder value.
 
Subject Specific skills
 
d) Synthesise complex organisational based information, together with dynamic external data into effective marketing lead strategies.
 
e) Demonstrate an ability to work effectively in a leadership role in order to carry out marketing tasks linking theory to practice

 

Answer:

Introduction 

Prior to doing the promotions for the organisations' products and services; the management of the organisation does the STP marketing. Segmentation splits buyers into groups with similar needs and wants to best utilise a firm's finite resources through buyer-based marketing (Hair and Lukas 2014). Segmentation leads to attract the right customers and it reduces risk in deciding where, when, how, and to whom a product to be marketed. Marketing efficiency is increased by directing effort specifically toward the designated segment in a manner consistent with that segment's characteristics. This helps in customer retention and creates customer delight. Through positioning, the organisation can reduce the cost of the company by not marketing the product where it’s not required. The thesis statement of this essay is to link the central issue of focusing on satisfying the customers' needs in a way that is superior to competitors through STP marketing. In this essay, STP analysis process is constructed along with a critical evaluation of each of the concept. In the following section, STP in marketing is applied in the industry by showing an effective practical foundation. In the final section of the essay, generic management recommendations are provided.

 

Understanding the concept of Segmentation, Targeting and Positioning

Concept of market segmentation

According to Dietrich et al. (2017), market segmentation allows the marketers to divide the potential customers into subgroups based on the characters of the customers. The segments of the customers are created who fall into marketing strategies and who share the similar types of traits, needs, interests and locations. Kubacki et al. (2017) stated that marketing segmentation is significant for the marketers to personalise the campaigning of after launching their products. The companies set the target market based on the segmentation rather than the companies can target each of the potential customers and the customers can become more efficient with time, resources and money. Segmentation is important for the organisation to target the customers on an individual level and there are many similar types of consumers who share the same types of tastes. Segmentation in the market allows the organisations to reach the audiences in a cost-effective way. Asiedu (2016) supported this by saying that market segmentation reduces the risk of ineffective marketing campaign and being unsuccessful when divides the market based on the features of the consumers. The organisations can also use the personalise strategies to be based on the information with having higher chance of success rather than just creating the generic campaign to implement for all types of customers.  

 

Process of creating market segment 

In the first stage, the marketers define the target market, trends and scope of the segmentation. It is very important to comprehend and try the customer within the specific segment. In the second stage, the marketers need to use the perceptual mapping and this marketing map can define the distribution to add the value chain between the suppliers and users. As opined by Baalbaki and Malhotra (2015), market mapping is important to determine the specific market to be analysed and the marketers segment the people after identifying the suppliers, distributors and retailers. In the third stage, the marketers of the organisation construct the model of the market so that the marketers can identify the trends which come into play within the market model. Within the market, customers are composed of different types of spending trend and the marketers also record key features of the customers. In the fourth stage, the marketers observe the information which may drive towards consumerism. The organisation also research on the needs and benefits of the consumers after addressing the value of the consumers perceive through generation of knowledge (Cross et al. 2015).

The marketers can segregate the market based on mainly four different segments.

Demographic segmentation: Demographic segmentation is the simplest and it is the widest type of market segmentation. Maximum companies get the right customers after using the right population choices using demographic segment. Demographic segmentation is mainly divided the customers based on age, gender, income, family size, religion, race and nationality. Therefore, the marketers can divide the market by using different price brackets.

Behavioural segmentation: The marketing team of the organisations divide the population based on the usage, behaviour, rate of usage of the products or service benefits sought by the customers, loyalty status of the customers and readiness of purchase of the customers (Solomon et al. 2014). Behavioural segmentation of the customers is made on the individual and it is the process to be marketed the product.

Psychographic segmentation: Psychographic segmentation of the marketing team of the organisation can be made through the personality of the customers, lifestyles, attitudes of the customers and class of the consumers. Asiedu et al. (2016) supported this by saying that psychographic segmentation can be done by using the activities of the people and interests of the people. The marketers also examine the consumers' buying behaviour which put psychological aspects of the customers.

Geographic segmentation: Sometimes, the marketers of the organisation divide the people based on the geographic areas. The marketers can divide the market that lives near the stores or supermarkets. The customers can segment the market based on location or region.

 

Benefits of marketing segmentation

  Market segmentation helps to determine market opportunities as the companies can reap the benefits of market segmentation by examining the groups of customers. The marketers understand the level of satisfaction of the customers from the existing offering of the products and companies use the opportunities to develop the launch products to meet the segments’ requirement (De Mooji 2018).

Concept of targeting

After segmenting the market into a few groups, the marketing team of the organisation target a specific consumer group or two consumer groups as the target market. As stated by Andrews and Shimp (2017), the target market is the end of consumers to whom the organisations want to sell their services or products. The target market of the organisation is involved in breaking down the market into segments and the organisations use the marketing strategies to each of the segment to enhance the market share. In addition, among the four market segmentation, the organisation uses one or two specific target market. The desired target market of the organisation is the primary target market and second is called the secondary target market. The customers do not consume all products and each of the products has its different target segment. The marketing team of the organisation cannot target all market segments; hence, the organisation involves in conceptualising the strategies to target the customers. Target marketing is revolving around the using the marketing technique to attract the customers. According to Pooler (2018), the marketing team of the organisation needs to understand the target audiences' needs and demands and the marketing team can talk to target audiences for a better understanding of their desires. The organisation builds the trust and credibility so that the organisation can engage and create the attention of the target market. Primary target market is to be targeted at first through finding the right medium and the organisation can maximise the budget to broaden the target market (Fong et al. 2015).

Advantages of target market 

After launching the new product or service, the marketing team sets the target market to promote the product or service. After expanding the business to new market; the organisation can also set the new target market. Targeting the customers can provide new opportunity to increase the brand awareness among new target audiences. The products or services of the organisation contain the unique selling proposition to address the need of the customers. Setting a new target market of the organisation helps to build the customer loyalty and it improves the customer retention (Brown et al. 2016). Targeting the audiences helps to improve the retention of the customers as the organisation creates a unique selling proposition of the products. Target customers of the organisation also make the partners of the organisation to make the success (Godey et al. 2016).

Concept of positioning  

Marketing position means the consumers’ perception of a product or brand in relation to the other competitors. Market positioning also means to the process of creating the brand identity so that the customers can perceive the products or service in a certain way. As stated by Paschen et al. (2017), positioning of a brand is a strategic process which involves in marketing or product in a certain way to make and establish an identity in the minds of the customers in the target market. Marketing positioning must be maintained of the product over the whole product lifecycle. The organisations take the marketing initiatives intended to emphasise the target market's perception of the product or the brand. The marketing team of the organisation creates the marketing positioning statement which is unique in most of the time and it makes differentiate the competitors. Shree et al. (2017) supported this by averring that market positioning means the ability to influence the consumer perception relative to the competitors. The goal of the market positioning is to create the image of a brand so that the customers can perceive.

  In different industries, the organisations take different types of positioning strategies. The marketing team can take the product attributes positioning which has certain characteristics with some of the beneficial values. The organisation is also associated with a brand by giving competitive pricing. In addition, as opined by Graham (2008), the organisations can also offer high-quality products to the customers. Positioning statement of the organisations can also associate with product use application. The marketing team of the organisations makes the perceptual map in market positioning. This perceptual map allows the organisation to understand the competitors' position in regard to the market position which they identify in the marketplace.

 

Advantages of positioning 

The marketing team does the positioning of the brand to cope with market changes. After setting the target market, the marketing team positions the product in a successful way by a thorough understanding of the competitive advantage. In addition, the positioning statement must meet the expectations of buyers as positioning statement provides an advantage to be communicated on the basis of expectations of the target market. In addition, positioning of the brand promotes consumer loyalty and goodwill. Product positioning wins the interest and attention of the consumers so that it can benefit the suitable means of advertisement (Grant 2016). Finally, product positioning can attract different types of customers so that the organisation can face the competition.

Importance of STP for organisations 

STP marketing of an organisation is a three-tiered approach to build a marketing plan for the organisation. Potential customers of the organisation would be segregated into marketing segment, the organisations need to understand the needs and the organisations will use the sales channel method to suit the customers' habit. According to ( ), STP analysis of the organisation creates the marketing communication plan as it helps the marketing team to prioritise propositions and it develops along with delivering the personalised message and relevant message. The marketing team of the organisation will have the audience to focus on communications approach to deliver the message for the commercially appealing audiences. STP analysis very starts with splitting the buyers into various groups and understanding their needs and wants to utilise the organisational resources through customer-based marketing (Hooley et al. 2012). STP analysis attracts the right customers as the organisation always target the suitable target market that has the needs to purchase the products. STP analysis reduces the risk of the business and they decide the where, when, to whom and how the products or services can be marketed. The marketing team of the organisation can increase the marketing efficiency by directing the special efforts toward the designated segregation with understanding the segment's characteristics. Stone and Desmond (2007) commented that STP analysis helps in retention of the customers as the target audiences know what the brand is expecting to provide them. The organisation promotes the products to the customers and the customers are aware of attributes of the products. The customers get delighted and STP also reduces the cost of the company by marketing the product to the right customers and where the products are required (Kotler and Gertner 2002).

Appropriate examples from different industries to exemplify how organisations have applied STP 

Nike is an American company which manufactures, design and develops the athletic wears and footwear.

Nike divides the market following the demographic segment. The customers aged between 15 and 40 are targeted and the people who belong from upper-class people are grouped for demographic segmentation. Upper-class people can afford the products sold by Nike. In behavioural segmentation, Nike attracts the customers who like to feel like athletic and their segmentation done by utility based. The segmentation can also be done by style based on which Nike sells flip-flops, spiked and court sandals. Nike also sells the product based on technology in which Nike targets the customers who like to purchase Nike free, Nike Shox and Air Max. In Psychographic segmentation, Nike segments the market by personalities and lifestyles segment. Nike uses the mission statement saying to bring innovation and inspiration to every athlete in the world. Nike also starts the promotional campaign using Run and Me concept and they also do the social media contests (Brohi et al. 2016). In the Geographic segment, Nike segments the customers based on national groups, city-based groups and the segmentation is also done based on population density.   

 The primary target market of Nike is youth population who are aged between 15 and 30. This young generation is mainly attached to sports enthusiasts. Sports enthusiasts' people like to purchase the athletic-based footwear and clothes. The target market of Nike is the athletic or the young people who like to keep fit. Nike also target the customers who belong from the high-income group as the products of Nike are costly and the common people cannot afford the price of the product.  

The secondary target market of Nike is the people who live near urban areas. The stores of Nike are mainly located near urban areas and the people who reside near urban areas are targeted.

 Nike positions itself as the premium quality product and it likes to encourage the athletes. Nike brings inspiration and innovation to an athlete in the world and Nike is a ubiquitous brand. As stated by Purakayastha and Rao (2015), Nike can shift from product focus to attitude focus to beat the competitors in the market. For the women, Nike takes the strategy to expand the women apparels and for the athletes, Nike takes the strategy of sponsorship to reach the young generation. The competitors of the Nike are Under Armour, Adidas, Sketchers and Anta.

Cadbury was launched in the year 1905 in the UK. Cadbury takes almost 30% of market share in the global confectionery and chocolate market.

In the demographic segment, Cadbury divides the market based on income group. Cadbury sells the products in two categories, premium products and basic products. Cadbury mainly segregates the customers based on higher income group. Behavioural segmentation is done based on the occasion segment and the marketing team divides the market to the people who like to purchase the Cadbury products in celebration and after dinner as a dessert. Psychographic segmentation of Cadbury is done based on the personality of the people and attitudes of the people. The people who like to have the chocolate and keep an eye on health are targeted (Bailey and Alexander 2017). Geographic segmentation is based on the location as the urban customers would be targeted. Cadbury is available in the open market and in supermarkets.

  Cadbury targets mainly all aged people as they try to cater to all aged people. Mass targeting is the target statement of Cadbury in the global scenario. Cadbury targets everyone in emerging economies as the advertisement or promotional technique targets everyone, kids, a young generation and even aged people like to eat Cadbury (Spry and Lukas 2016).

Positioning statement of Cadbury is related to the perfect expression of feeling. Cadbury positions itself as the chocolate brand which can be taken in dessert as well. Cadbury does not do joy positioning as it starts to position itself as back to brand root.

Generic recommendations 

First of all, the organisations need to set the marketing objectives of the organisation as it is the first stage to start a marketing plan. Marketing objectives help to identify the financial and marketing goals of the organisation.

Second, the organisations irrespective of any industry determine actual and potential customers. The business organisations can launch a new product or businesses organisations can enter the new market; in this scenario, the organisations need to determine the customers. In addition, the marketing team of the organisations should try to identify the segments. In this stage, the organisations should segregate the markets into four segments which are geographic, demographic, behavioural and psychographic. Moreover, the organisations need to analyse the competitors’ intensity in the industry and in each of the segment. Moreover, the organisation must select the attractive customer segments so that they can reach a wide range of customers.

  Third, the organisations must define the abilities and resources which are needed to target the customers. In this point, the organisation can also follow the key success factors of the business. The organisations can analyse competitors on skills and resources as it is the analysis of the major competitors in the market. Moreover, the organisation needs to consider the companies' abilities to meet the needs of the competitors as it is the strategy of the differential capabilities of the organisation. The marketing team of the organisation analyse each of the segments and finally, they target the segment which has the greater influence on the organisation and which helps to provide a larger margin of profit.  

  Fourth, the positioning of the organisation is solely depended on the target market. The organisation should identify the different segments’ advantages and benefits. After getting to know the target market, the organisation should develop the positioning statement as it is the competitive advantage statement of the organisation. Positioning statement must have the list of differential benefits and target segment description.

Conclusions

It has been noted that segmentation is about classifying your customers on some basis like demographically, behaviour, geographically and psychographic. Targeting is marketing to a particular segment of the market and group of customers. Finally, the positioning of marketing is building a brand image in the mind of the customers. Nowadays, customers are not as simple as before, in the past, people had little choices; therefore, most of the tendency and preference were decided by producers. Now, customers have more choices, more preferences and more features, to analyse the behaviours of customers and to set strategies precisely is the most important part. Therefore, segmentation is completely done based on the desires and needs of the customers in different groups. Customers’ needs, wants and choices justify the target market for the organisation.

 

Reference List 

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Asiedu, E., 2016. A Study of Use and Impact of Market Segmentation Practices on Bank Performance. With Special Reference to Commercial Banks in Colombia. J. Bus. Finance. Affairs, 5(162), pp.2167-0234.

Baalbaki, I.B. and Malhotra, N.K., 2015. 11.4 Macro/Environmental/Ethics/Quality-of-Life Marketing: Health Public Policy, and International Market Segmentation. In Proceedings of the 1995 World Marketing Congress (pp. 48-48). Springer, Cham.

Bailey, A.R. and Alexander, A., 2017. Cadbury and the rise of the supermarket: innovation in marketing 1953–1975. Business History, pp.1-22.

Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A. and Chawla, S., 2016. Strategic Marketing Plan for Nike. International Journal. 2(3), pp,34-45.

Brown, S., 2016. Postmodern marketing: dead and buried or alive and kicking?. In The Marketing Book (pp. 43-58). Routledge.

Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.

De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes. SAGE Publications Limited.

Dietrich, T., Rundle-Thiele, S. and Kubacki, K., 2017. Segmentation in Social Marketing (Vol. 1). Singapore: Springer.

Fong, N.M., Fang, Z. and Luo, X., 2015. Geo-conquesting: Competitive locational targeting of mobile promotions. Journal of Marketing Research, 52(5), pp.726-735.

Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R., 2016. Social media marketing efforts of luxury brands: Influence on brand equity and consumer behaviour. Journal of business research, 69(12), pp.5833-5841.

Graham, H., 2008. Marketing strategy and competitive positioning. Pearson Education India.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. New Jersey: John Wiley & Sons.

Hair Jr, J.F. and Lukas, B., 2014. Marketing research (Vol. 2). McGraw-Hill Education Australia.

Hooley, G., Piercy, N.F. and Nicoulaud, B., 2012. Marketing strategy and competitive positioning. Prentice Hall/Financial Times.

Kotler, P. and Armstrong, G., 2010. Principles of marketing. Pearson education.

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Kubacki, K., Dietrich, T. and Rundle-Thiele, S., 2017. Segmentation in Social Marketing: Why We Should Do It More Often that We Currently Do. In Segmentation in Social Marketing (pp. 1-6). Springer, Singapore.

Paschen, U., Paschen, J. and Kietzmann, J., 2017, May. Cool Marketing for Icewine? Investigating Producer’s Product Positioning, Segmentation, and Marketing Mix for Canadian Icewine: An Abstract. In Academy of Marketing Science Annual Conference (pp. 337-338). Springer, Cham.

Pooler, J.A., 2018. Demographic targeting: the essential role of population groups in retail marketing. Routledge.

Purkayastha, D. and Rao, A.S., 2015. Digital Marketing at Nike: From Communication to Dialog. International Journal. 2(3), pp,56-59.

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Stone, M.A. and Desmond, J., 2007. Fundamentals of marketing. Routledge.

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