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Marketing Strategy (Chapter 5)

Marketing Strategy (Chapter 5). business strategy and marketing strategy STP (segmenting, targeting, positioning) marketing strategies for online and/or offline . Assessing the Fit Between Business-Unit Strategy and Marketing Strategy. Goal Alignment. Implementation Alignment. Fit.

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Marketing Strategy (Chapter 5)

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  1. Marketing Strategy(Chapter 5) • business strategy and marketing strategy • STP (segmenting, targeting, positioning) • marketing strategies for online and/or offline ã 2001 - Dwayne D. Gremler

  2. Assessing the Fit Between Business-Unit Strategy and Marketing Strategy Goal Alignment Implementation Alignment Fit Resource Alignment Activity Alignment Exhibit 5-1 ã 2001 - Dwayne D. Gremler

  3. Marketing Strategy Decisions Marketing Strategy Decisions Product Promotion Positioning and Target-Market Selection Price Distribution Exhibit 5-2 ã 2001 - Dwayne D. Gremler

  4. Key Concepts in Marketing Strategy Marketing Strategy Segmentation Targeting Positioning • Divide market into useful sub-units of consumers who are similar in what they value within the product category, in terms of their cost to serve, or in characteristics that make them accessible to a particular marketing program • The target market is the segment (or segments) of the market most attractive to the firm based on profitability, cost to serve, accessibility and/or growth potential • The benefits of the product are strategically communicated to the target market in order to secure a strong position in terms of consumer perceptions of the offering ã 2001 - Dwayne D. Gremler

  5. Marketing Strategy Formulation Pure-Play Firm Bricks-and-Mortar Firm Online Business-Unit Strategy Business-Unit Strategy • Overall • Online • Offline Marketing Strategy for Online Business Integrated Marketing Strategy Marketing Strategy for Offline Business Marketing Strategy for Online Business • Choices • 1. Segmentation • 2. Target market selection • 3. Positioning • Choices • 1. Same vs. different segment • 2. Same vs. different target market • 3. Same vs. different positioning Exhibit 5-3 ã 2001 - Dwayne D. Gremler

  6. Marketing Strategy in the Networked-Economy Firm • The Internet affects marketing strategy for networked-economy firms in four broad ways: • finer gradations of segmentation • faster cycle time of marketing strategy development • increased accountability of marketing efforts • increased integration of marketing strategy with business strategy and operations ã 2001 - Dwayne D. Gremler

  7. Bricks-and-Mortar Segmentation Scenarios Change in Segmentation Characteristics Due to Internet • Reclassified — Expansion Yes • Market Expansion Changes in Size of Market Segments No • No Change • Market Reclassification Exhibit 5-6 No Yes ã 2001 - Dwayne D. Gremler

  8. Bricks-and-Mortar Targeting Scenarios Customer Similarity Same Customers Different Customers Blanket Targeting “Be-Different” Targeting Entire Segment Focus of Effort Beachhead Targeting Bleed-Over Targeting Portions of a Segment Exhibit 5-7 ã 2001 - Dwayne D. Gremler

  9. Bricks-and-Mortar Positioning Scenarios and Guidelines Customer Similarity Same Customers Different Customers Blanket Targeting “Be-Different” Targeting • Borrow heavily from existing offline positioning • Tout basic advantages of the Internet: convenience and accessibility • Reposition entirely • Position differentiations that cater to the new segment Entire Segment Focus of Effort Beachhead Targeting Bleed-Over Targeting • Also borrow from offline positioning • Focus more, however, on needs of the smaller group • Stress value-added of the Internet • Use dual positioning • Leverage existing positioning • Position added benefits, such as augmented offerings via the Internet (e.g., increased product customizability) Portions of a Segment Exhibit 5-8 ã 2001 - Dwayne D. Gremler

  10. Positioning Plan for Pure-Play Internet Firms Pure-play firms should follow the following five steps when creating a positioning plan: 1. Identify ActualProduct Positioning 2. Determine Ideal Product Position 3. Develop AlternativeStrategies for AchievingIdeal Product Position 4. Select andImplement theMost PromisingAlternative 5. Compare New Actual Position with Ideal Position • Source: Paley, Norton. The Manager’s Guide to Competitive Marketing Strategies. New York: AMACOM, 1989. ã 2001 - Dwayne D. Gremler

  11. Offering-Based Segmentation of Auction Market Amazon Yahoo Egghead.com ePage Cityspree Qool DealDeal eBay uBid BidZ eWanted Mass Type of Offering Dell Auction AuctionLaptops Collectors Car Auction Manheim Autos Niche Multi-Type (Auction + Retail) P2P B2C / B2B Auction Exhibit 5-9 Breadth of Business ã 2001 - Dwayne D. Gremler

  12. Marketing Strategy — Conclusion • Marketing strategy has three main components: • Segmentation, or identifying relevant market segments with specific needs • Targeting, or choosing an attractive segment consistent with the firm’s resources and goals • Positioning, or strategically communicating the product’s benefits to the target segment • The Internet affects marketing strategy in networked-economy firms through: • Finer segmentation • Faster development of marketing strategy through faster information gathering • Increased tracking and accountability of marketing efforts • Increased integration with business strategy and operations ã 2001 - Dwayne D. Gremler

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