Marketing Fundamentals: Strategy, Segmentation, and Positioning

The Marketing Concept

The philosophy that a company’s success is ultimately dependent upon the efficient identification of consumer needs and wants and the ability to satisfy them.

Benefits of Marketing

The marketing process serves many purposes and provides numerous benefits for the consumer:

• Value Addition: The ability to add perceived value to goods and services.
• Convenience: Making the buying process easy and convenient for consumers.
• Pricing: Creating and maintaining reasonable prices.
• Variety: Offering a variety of goods and services.
• Production: Increasing production.

The Marketing Mix

The marketing mix consists of variables controlled by marketing professionals in an effort to satisfy the target market:

• Product: Involves the goods, services, or ideas used to satisfy consumer needs.
• Price: Determined by what customers are willing to pay and production costs.
• Place: Involves the process of making the product available to the customer.
• Promotion: Involves how the goods or services are communicated to the consumer.

Target Market

A target market refers to people with a defining set of characteristics that set them apart as a group. Target markets must be:

• Sizeable: The overall size of the market.
• Reachable: The ability for marketers to reach consumers.
• Measurable: The ability to measure size, accessibility, and overall purchasing power.
• Behavioral: Marketers seek to find similar behaviors within each respective target market.

All organizations must have an understanding of their target market to create an effective marketing strategy that caters to their audience.

Niche Marketing

Niche marketing is the process of carving out a relatively tiny part of a market that has a very special need not currently being filled, offering a unique opportunity to consumers.

Market Segmentation

Market segmentation is the process of identifying groups of consumers based on their common needs. It helps companies to:

• Understand consumer groups
• Determine target markets
• Develop positioning strategies
• Customize products and marketing strategies

Five Bases for Market Segmentation

1. Demographic
2. Product
3. Psychographic
4. Benefits
5. Geographic

Positioning

Positioning is the act of fixing your sports or entertainment entity in the minds of consumers in the target market:

• Sports drinks: Gatorade as a performance beverage.
• Movie studios: Pixar as a leader in animated films.
• Entertainers: Will Ferrell as a comedic actor.

Positioning Strategy

• Identify all possible competitive advantages.
• Products, services, channels, people, or image can be sources of differentiation.
• Organizations often position their products relative to competitor weaknesses (e.g., 5-hour Energy).