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Lesson#37

MARKET SEGMENTATION-2

Learning objectives
The main objective of this chapter to enable to students about concern marketing issue such marketing
segmentation, marketing mix and product positioning relating to strategy implementation.

Marketing Mix

Marketing decisions generally fall into the following four controllable categories:
Product
Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept
of the Marketing Mix
. Borden began using the term in his teaching in the late 1940's after James Culliton had
described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix
included product planning, pricing, branding, distribution channels, personal selling, advertising,
promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome
McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of
marketing, depicted below:

The Marketing Mix

These four P's are the parameters that the marketing manager can control, subject to the internal and
external constraints of the marketing environment.

The goal is to make decisions that center the four P's
on the customers in the target market in order to create perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are some examples of the
product decisions to be made:
Brand name
Functionality
Styling
Quality
Safety
Packaging

133
Repairs and Support
Warranty
Accessories and services

Price Decisions

Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)
Suggested retail price
Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of distribution decisions
include:
Distribution channels
Market coverage (inclusive, selective, or exclusive distribution)
Specific channel members
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics

Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of generating a
positive customer response. Marketing communication decisions include:
Promotional strategy (push, pull, etc.)
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget

Product Positioning

“It simply means Positioning is how a product appears in relation to other products in the market”
After segmenting markets so that the firm can target particular customer groups, the next step is to find
out what customers want and expect. This takes analysis and research. A severe mistake is to assume the
firm knows what customers want and expect. Countless research studies reveal large differences between
how customers define service and rank the importance of different service activities and how producers
view services. Many firms have become successful by filling the gap between what customers and
producers see as good service. What the customer believes is good service is paramount, not what the
producer believes service should be.

Product positioning strategy

The ability to spot a positioning opportunity is a sure test of a person's marketing ability. Successful
positioning strategies

are usually rooted in a product's sustainable competitive advantage. The most
common basis for constructing a product positioning strategy are:
Positioning on specific product features

Positioning on specific benefits, needs, or solutions
Positioning on specific use categories
Positioning on specific usage occasions
Positioning on a reason to choose an offering over the competition
Positioning against another product
Positioning through product class dissociation
Positioning by cultural symbols
The following steps are required in product positioning:
1. Select key criteria that effectively differentiate products or services in the industry.
2. Diagram a two-dimensional product-positioning map with specified criteria on each axis.
3. Plot major competitors' products or services in the resultant four-quadrant matrix.
4. Identify areas in the positioning map where the company's products or services could be most
competitive in the given target market. Look for vacant areas (niches).
5. Develop a marketing plan to position the company's products or services appropriately.

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Key Terms: segmentation in marketing market segments market segmentation analysis market research segmentation market positioning market analysis definition market segmentation consumer segmentation consumer market segmentation business market segmentation

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