2.4 Marketing Strategy and the Marketing Mix Flashcards
What does a strategic plan define?
The strategic plan defines the company’s overall mission and objectives.
Figure 2.4 Managing Marketing Strategies and the Marketing Mix
Definition of Marketing Strategy
Marketing strategy: The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.
What does a company decide when formulating a marketing strategy?
The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning).
It identifies the total market and then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying the customers in these segments.
Guided by marketing strategy, what does the company then design?
Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control—product, price, place, and promotion (the four Ps).
What must a company do to suceed in today’s competitive market place?
To succeed in today’s competitive marketplace, companies must be customer centred.
They must win customers from competitors and then engage and grow them by delivering greater value.
What does the process of chosing the best segments of society that a company wishes to serve, involve?
Thus, each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments.
This process involves market segmentation, market targeting, differentiation, and positioning.
What are some of the different ways that consumers can be grouped?
Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioural factors.
Definition of Market Segmentation.
Market segmentation: Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviours and who might require separate marketing strategies or mixes.
Definiton of a Market Segment
Market segment: A group of consumers who respond in a similar way to a given set of marketing efforts.
Definition of Market targeting (Targeting)
Market targeting (targeting):
Evaluating each market segment’s attractiveness and selecting one or more segments to serve.
How many segments do most companies enter a new market by serving?
Most companies enter a new market by serving a single segment; if this proves successful, they add more segments.
What must a company do after it has decided which market segment to enter?
After a company has decided which market segments to enter, it must determine how to differentiate its market offering for each targeted segment and what positions it wants to occupy in those segments.
Definition of Positioning
Positioning: Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Marketers plan positions that distinguish their products from competing brands and give them the greatest advantage in their target markets.
Definition of Differentiation
Differentiation: Actually differentiating the market offering to create superior customer value.
What is positioning and what are the steps?
In positioning its brand, a company first identifies possible customer value differences that provide competitive advantages on which to build the position.
A company can offer greater customer value by either charging lower prices than competitors or offering more benefits to justify higher prices. But if the company promises greater value, it must then deliver that greater value.
Definition of Marketing mix
Marketing mix:
The set of tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.
Figure 2.5 The Four Ps of the Marketing Mix
What is Product in the 4 P’s
Product means the goods-and-services combination the company offers to the target market.
Thus, a Ford Escape consists of nuts and bolts, spark plugs, pistons, headlights, and thousands of other parts.
Ford offers several Escape models and dozens of optional features.
The car comes fully serviced and with a comprehensive warranty that is as much a part of the product as the tailpipe.
What is the Price in the 4 Ps
Price is the amount of money customers must pay to obtain the product.
For example, Ford calculates suggested retail prices that its dealers might charge for each Escape. But Ford dealers rarely charge the full sticker price. Instead, they negotiate the price with each customer, offering discounts, trade-in allowances, and credit terms.
These actions adjust prices for the current competitive and economic situations and bring them into line with the buyer’s perception of the car’s value.
What is Place in the 4 Ps
Place includes company activities that make the product available to target consumers.
Ford partners with a large body of independently owned dealerships that sell the company’s many different models. Ford selects its dealers carefully and strongly supports them.
The dealers keep an inventory of Ford automobiles, demonstrate them to potential buyers, negotiate prices, close sales, and service the cars after the sale.
What is Promotion in the 4 Ps?
Promotion refers to activities that communicate the merits of the product and persuade target customers to buy it.
Ford spent nearly US$2.4 billion in 2017 on advertising to tell consumers about the company and its many products.14 Dealership salespeople assist potential buyers and persuade them that Ford is the best car for them. Ford and its dealers offer special promotions—sales, cash rebates, and low financing rates—as added purchase incentives. And Ford’s Facebook, Twitter, YouTube, Instagram, and other social media platforms engage consumers with the brand and with other brand fans.
How may the 4 Ps be better discribed from a customer value and relations point of view? (4 As)
Acceptability is the extent to which the product exceeds customer expectations;
Affordability the extent to which customers are willing and able to pay the product’s price;
Accessibility the extent to which customers can readily acquire the product; and
Awareness the extent to which customers are informed about the product’s features, persuaded to try it, and reminded to repurchase.
Product design influences acceptability, price affects affordability, place affects accessibility, and promotion influences awareness.
