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SECTION 2
Target Marketing strategies
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INTRODUCTION
Understanding and defining the market place is the first step in the basic marketing process - presented in the previous section
This is a complex, challenging, and constantly changing environment
The market for a particular item is made up of existing and potential customers who need it and “have the ability and willingness to pay for it” (Business Dictionary.com, 2016)
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MARKETS
A market is a mechanism for -determining price for a traded item. -communicating price information. -facilitating deals and transactions -effecting distribution.
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BUSINESS PRODUCT
It is “any product that is used to produce another product, which becomes part of another product or that is used in the daily operations of a company; or that is resold to other customers” (Lamb et al, 2015:544)
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EXAMPLES OF BUSINESS PRODUCTS
Major equipment (truck, bull dozers) Accessory equipment (personal computer, office equipment Components parts (tyres, electric pumps in engine). Processed materials (sheet metals, chemicals) Supplies (cleaning materials, ink) Business services (legal, financial, cleaning services)
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DIFFERENCES BETWEEN BUSINESS AND CONSUMER MARKETS
Buying characteristic B2B market B2C market
Demand Whole org Individual
Size of order Larger Smaller
# of customers Fewer Many
Location of buyers Geographically concentrated
Widely distributed
Distribution structure More structured More personal
Buying influence Multiple Single
Type of negotiation Complex Simpler
Use of leasing Greater Lessor
Primary Promotional method
Personal selling Advertising
(Source: Lamb et al, 2015;546)
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B2B CUSTOMERS
Producers Resellers National and local government
departments Institutions
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A MODEL OF BUSINESS BUYER BEHAVIOUR
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A MODEL OF BUSINESS BUYER BEHAVIOUR
Buying situation • New task buying • Straight rebuy • Modified rebuy
Buying centre • Users • Influencers • Buyer • Decision-maker • Gatekeeper • Marketing challenges of the buying centre
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A MODEL OF BUSINESS BUYER BEHAVIOUR
Business buying process • Refer to table 6 in your guide and complete
the activity on B2B marketing trends
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A MODEL OF BUSINESS BUYER BEHAVIOUR
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A MODEL OF BUSINESS BUYER BEHAVIOUR
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TARGET MARKETING STRATEGIES IN BUSINESS MARKETS
The central focus of marketing should be to create customer value and to build profitable customer relationships
Step 1: Market segmentation Step 2: Market targeting Step 3: Differentiation Step 4: Positioning Complete the activity in your guide – basic
segmentation concepts (pp 75)
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ACTIVITY: SEGMENTATION FACTORS
Aim: -To identify participants’ knowledge of segmentation factors
Time: • 3 minutes: Asking participants questions on segmentation factors • 3 minutes: Facilitator feedback and closure
Task: To discuss segmentation factors with participants
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BASES FOR MARKET SEGMENTATION
Market segmentation addresses the first simple sounding marketing question from figure 5: Which customers will we serve?
We know that consumer markets can be segmented geographically, demographically, psychographically, and behaviourally
The business market can be segmented geographically, demographically (by industry, company size), or by benefits sought, user status, usage rate, and loyalty status
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BASES FOR MARKET SEGMENTATION
Business marketers also use some additional segmentation variables, such as:
• Customer operating characteristics • Purchasing approaches • Situational factors • Personal characteristics
Segmenting business markets • Refer to table 7 in your guide (pp 77)
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REQUIREMENTS FOR EFFECTIVE SEGMENTATION
To be useful to a marketer, a segment must meet five requirements. Segments must:
• Measurable • Accessible • Substantial • Differentiable • Actionable
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MARKET TARGETING
Evaluating market segments • Segment size and growth • Structural attractiveness • Company objectives and resources
Selecting target market segments • Broad • Narrow
Choosing a targeting strategy • Company’s resources • Degree of product variability • Life cycle stage • Market variability • Competitors marketing strategies
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DIFFERENTIATION AND POSITIONING FOR COMPETITIVE ADVANTAGE
What is product positioning? Differentiation: the cornerstone of positioning Positioning maps Choosing a differentiation and positioning
strategy Remember to answer the recap and
discussion questions in your guide
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SECTION 2: SUMMARY
Learning outcomes covered: Determine positioning strategy by analysing and interpreting market information. Undertake market segmentation and identify target markets. Discuss STDP and importance to the organisation