Week 5 | Positioning, marketing information and research

Question 1

Selecting target segments

Answer 1

the second stage of developing a target marketing strategy is to decide which of the segments identified are worth pursuing and then deciding on an appropriate market coverage strategy. Market coverage simply refers to the number of segments to which the company will market and whether to adapt the marketing mix for these segments.

Question 2

Size and growth

Answer 2

• Is this segment the right size?

- Will it be profitable and is it a growing segment for our firm?

Question 3

Structural attractiveness

Answer 3

• Can we access and compete in this market?
• How different do the marketing mixes need to be to satisfy the
  differing needs of the various segments? If very different, then does
  the organisation have the required capabilities to target more than one
  segment?
• Can we communicate and reach consumers in this segment?
• Can we deliver the product to the consumers in this segment?

Question 4

Company objectives and resources

Answer 4

Does this segment match our firm’s organisational capabilities and objectives?

Question 5

Developing targeting strategies

Answer 5

A target market is defined as ‘a group of people or organisations for which an organisation designs, implements and maintains a marketing mix intended to met the needs of that group, resulting in mutually satisfying exchanges’ (Lamb et al. 2018, p. 90).

Question 6

Undifferentiated targeting

Answer 6

he market is viewed as one big entity with no individual segments and thus requires a single marketing mix.

Question 7

Concentrated targets

Answer 7

This is used to select one niche segment for targeting marketing efforts.

Question 8

Multi-segmented targeting

Answer 8

A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.

Question 9

Cannibalisation

Answer 9

Cannibalisation in relation to marketing does not involve eating people. Instead, it means a company seeing a reduction in sales, revenue or market share for a specific product as a result of introducing a new product by the same organisation, i.e. the company’s own products ‘cannibalise’ each other

Question 10

Positioning: The final step in the process of target marketing

Answer 10

Once a company has decided which segments of the market it will enter, it must decide which ‘position’ it wants to occupy in those segments. A product’s position is the ‘… way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products’ (Armstrong et al. 2012, p. 201).

Question 11

Four steps to Positioning

Answer 11

1. identifying sources of competitive advantage
2. choosing which to apply (and to which parts of the target market)
3. selecting the overall positioning strategy (that is the value proposition)
4. communicating and delivering that value proposition (via the marketing mix).

Question 12

Positioning

Answer 12

The process of developing a specific marketing mix to influence current and potential customers’ overall perception of a brand, product line or organisation, and the place the products hold inside their mind

Question 13

Position

Answer 13

The place a product, brand or groups of products hold in the consumers’ mind in relation to similar products. ‘Position’ is sometimes confused with the ‘Place’ part of the 4Ps. You need to put the physical idea of positioning out of your head when talking about target marketing.

Question 14

Product differentiation

Answer 14

A positioning strategy that some organisations use to to distinguish their products from those of their competitors. Product (or brand) differentiation refers to how the product is able to be distinguished from other products—what attributes set it apart? In target marketing, competitive advantage is gained when a product is differentiated in some way—so much so that it is positioned in consumers’ mind in a way that reflects it can offer superior value compared to alternatives. Some bases for differentiation include product, services, channel, people or image.

Question 15

Differentiation

Answer 15

Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices

Question 16

Four factors of differentiation

Answer 16

• Product, e.g. example features, performance, durability, conformance, reliability, reparability, styles, designs.
• Service, e.g. delivery, installation, customer training, consulting, maintenance, other services such as warranty and guarantee.
• Personnel, e.g. competence, hospitality, credibility, trustworthiness, responsiveness, communications.
• Image, e.g. symbols, printed media, audio/visual media, atmosphere, sponsorship.

Question 17

Unique selling proposition

Answer 17

The factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the
competition. Entrepreneur.com, n.d.

Question 18

Developing an effective positioning strategy

Answer 18

Positioning involves making decisions on attributes that are important to prospective customers. Having an explicit positioning strategy is valuable to help prospective customers to get a ‘mental fix’ on what to expect. Once the company determines how to succinctly communicate their market position, the positioning statement often then becomes the source of company slogan

Question 19

Elements to a positioning statement

Answer 19

• Target audience, i.e. who do you want to serve?
• Frame of reference, i.e. what category are you in?
• Point of difference, i.e. what is your most compelling benefit that others don’t have? And what problem does it solve for the customer?
• Price, i.e. what is the target customer willing to pay?
• Reason to believe, i.e. what is your proof? This last step is optional.

Question 20

Positioning maps

Answer 20

A positioning map is a way of displaying or graphing, in two or more dimensions, the location of products, brands or groups of products in customers’ minds. Positioning maps, which are developed out of market research, show consumer perceptions of marketer’s brands versus competing products on important buying dimensions.

Question 21

Marketing information systems (MIS)

Answer 21

Marketing information systems gather everyday information about environmental marketing developments to generate and validate actionable customer and market insights. They help to:

• assess information needs
• develop the required information
• help decision-makers use the information effectively.

Question 22

Key points of MIS

Answer 22

• There is an overwhelming amount of information available.
• Information in itself has little value—its value is in thecustomer/market insightsthat can be derived from it.
• There may be a lot of information that managers would like to have, so it’s necessary to assess what is really needed and what is feasible
  to gather.
• Gathering and analysing information can be very costly—e.g. staff
  time is a major cost. Costs must be weighed against potential insights.
• There are two main sources for ongoing information:internal dataandmarketing intelligence.You should know what each means and be able to offer some examples.

Question 23

Marketing research

Answer 23

Marketing research links the consumer, customer and public to the marketer through information. It is used to:

• identify and define marketing opportunities and problems
• generate, refine and evaluate marketing actions
• monitor market performance
• improve understanding of the marketing process.

Question 24

Step 1: Defining the problem and research objectives

Answer 24

Defining the research problem is probably the hardest part of the research process and the most important. If the problem is defined too narrowly you can end up with a distorted and narrow view of the issue. If you define the research problem too broadly, it can be difficult to operationalise it so that it can be measured.
Exploratory: objectives are simply designed to explore certain topics to uncover some insights.

Descriptive: objectives relate to estimating the size of certain groups of people.

Causal: testing a new advertisement to figure out whether it changed attitudes about the product would be an example of causal research as it seeks to investigate whether the advertisement would cause a particular effect (or change).

Question 25

Step 2: Developing the research plan for collecting information

Answer 25

Collecting secondary data is often a very early part of the research planning process. You were introduced to the concept of secondary sources in previous weeks, but make sure you take note of the definition of secondary data and that of its counterpart, primary data.

Question 26

Step 3: Implementing the research plan

Answer 26

The third step of the research process is dealt with only very briefly as the plan from Step 2 contains all the detail of how the implementation will be carried out.The main points to note are:

• The process of collecting and analysing data may be done ‘in house’ or by a marketing research agency.
• Care needs to be taken to avoid errors and biases creeping into the data or analysis.

Question 27

Step 4: Interpreting and reporting the findings

Answer 27

The data that is collected and analysed are simply the raw ingredients of marketing research. To become knowledge and an aid to decision-making, it needs to be analysed, interpreted, and put into a form where it can be applied. And importantly, the findings must be
presented in a manner that will make sense to the managers who need to apply it.

Question 28

Other considerations

Answer 28

Marketing research and market intelligence gathering is not reserved for large profit-making enterprises and can be carried out by all types of organisations. Conducting research internationally, however, certainly presents special challenges and you should be broadly aware of this.