Strategic Marketing

1. Imperatives for Market-Driven Strategy

2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control
 CHAPTER 6
Market Targeting and Strategic
Positioning

Market Targeting Strategy

Targeting in Different Market Environments
Positioning Strategy
Developing the Positioning Strategy
Determining Positioning Effectiveness

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
 MARKET TARGETING STRATEGY

The Marketing Targeting Decision Identities the People or

Organizations in a Product-Market Toward Which a Firm
Directs Its Positioning Strategy Guided by an
understanding of:

•The product-market
•Its buyers
•Firm’s capabilities resources
•Competition

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SEGMENTS

VALUE
OPPORTUNITES

CAPABILITIES/
SEGMENT
MATCH

TARGET(S)

POSTIONING
FOR EACH
TARGET
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 Market Targeting Alternatives
Segments Clearly Defined

Target Target
Selected Multiple
Selective Niche(s) Segments Extensive
Targeting Product Product Targeting
Specialization Variety

Differentiated But Segments

Not Clearly Defined

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 Factors Influencing Targeting Decisions
* Stage of product – market maturity

* Extent of diversity in preferences

* Industry structure

* Capabilities and resources

* Opportunities to gain competitive

advantage

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TARGETING IN DIFFERENT MARKET ENVIRONMENTS

 Emerging

 Growing
 Mature
 Declining
 Global

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 Emerging Market
Buyer Diversity
* Segmentation limited due to similarity of buyers’
preferences
Industry Structure
* Typically small new organizations
* Limited access to resources
Capabilities and Resources
* Unique benefit (differentiation) strategy rather
than low-cost
* First-mover advantage
Targeting Strategy
* Single target or a few broad segments

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 Growth Market
Buyer Diversity
* Segments should exist
Industry Structure
* Numerous competitors
Capabilities and Resources
* Survival requires aggressive actions by firms that seek large
market positions
* Otherwise select one or a few market segments
Targeting Strategy
* Three possible strategies
1. Extensive market coverage by firms with established
businesses in related markets
2. Selective targeting by firms with diversified product portfolios
3. Very focused targeting strategies by small organizations
serving one or a few market segments.
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 Mature Markets
Buyer Diversity
* Segmentation essential for competitive advantage
Industry Structure
* Intense competition for market share
* Emphasis on cost and service, and pressures on profits
Capabilities and Resources
 Management’s objectives: cost reduction, selective
targeting, product differentiation
Targeting Strategy
 Deciding which segment to serve
 Firms pursuing extensive targeting strategies may decide
to exit from certain segments
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 Global Markets
Global Reach and Standardization
* Identify market segments that span global markets and
serve these needs with global positioning strategies
Local Adaptation
* Consider requirements of domestic buyers
* Buyers’ needs and preferences affected by social, political,
cultural, economic, and language differences
Industry Structure
* Restructuring, acquisitions, mergers, and strategic
alliances altering industries and
competition
Targeting Strategy
* Targeting a single country, regional (multinational)
targeting, or global targeting
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 GLOBAL Successful British Retailer Tesco Enters
FEATURE the U.S. Market
Tesco announced plans to open a chain of convenience stores on the U.S. West
Coast in 2007, spending an estimated $453 M. The very successful retailer has four
types of stores, including the convenience chain, Tesco Express.

This initiative is being launched even though the U.S. retail grocery market is
experiencing intense competition, and some chains are cutting back or selling out.

Tesco’s decision to enter the U.S. convenience market is bold and risky. Some
authorities consider the action questionable. However, Tesco has a very impressive
success record in Britain. With its Tesco Express, Tesco Metro, Superstore, and Extra
hypermarkets, the giant retailer has dulled Wal-Mart’s drive to dominate the retail
scene.

Tesco has no brand awareness in the U.S. so building brand identity will be
challenging. Yet the retailer has global buying power, powerful information
technology, and strong supply chain capabilities. The stores will offer groceries,
produce, and private-label ready-to-eat meals. Some observers think Tesco is
planning to compete with Wal-Mart in its home market.
Source: Kerry Capell, “Tesco: California Dreaming?” BusinessWeek, February 27, 2006, 38.
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 POSITIONING STRATEGY

Deciding the desired perception/

association of an organization/ brand by
market target buyers…and designing the
marketing program to meet (and exceed)
buyers’ value requirements.

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STRATEGIC POSITIONING INITIATIVES
POSITIONING CONCEPT
The desired positioning of the
product (brand) by targeted buyers

MARKET
TARGET
POSITIONING POSITIONING
EFFECTIVENESS STRATEGY
How well The combination of
management’s marketing actions
positioning objectives used to communicate
are achieved for the the positioning concept
market target to targeted buyers

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INNOVATION Spotting Shifts in Demand in designing
Hennes & Mauritz (H&M) Apparel
FEATURE
It’s 1:30 p.m. on a Monday in the bustling H&M store on Manhattan’s fifth
Avenue, and Alma Saldana, a 28-year-old makeup artist from Houston, is stuffing
three tiny vests into her black Y&M shopping bag. That’s on top of blouses,
jackets, and pants. Saldana is in a buying frenzy. This is her first visit to H&M,
the Stockholm-based fashion retailer, and it’s everything she had hoped for.
“Somebody told me you find great fashion at a very cheap price, and it’s true!”
she exclaims.

Such enthusiasm has made H&M one of the hottest fashion companies around.
Central to its success is its ability to spot shifts in demand and respond with
lightning speed. While traditional clothing retailers design their wares at least six
months ahead of time, H&M can rush items into stores in as little as three weeks.
Most of the work is done ahead, too. But when it sees consumers scooping up
something like vests, it speeds a slew of new variations into stores within the
same season, to the delight of shoppers like Saldana. “Speed is important. You
need to have system where you can react in a short lead time with the right
products,” says Chief Executive Rolf Eriksen.
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How does it work? H&M designers had included a couple of cropped vests in
their autumn/winter collections. In august, shortly after the vests went on sales,
they started “flying out of the stores,” say Margareta van den Bosch, H&M’s head
of design. H&M’s designers in Stockholm (it has more than 100) spotted the
trend in the company’s worldwide sales reports, published internally every
Monday. About half of them immediately started sketching new styles. As
quickly as designs came off their desks, pattern makers snipped and pinned,
pressing employees into service as live models. At the same time, buyers
ordered fabrics. The designs were zoomed electronically to workers at H&M’s
production offices in Europe and Asia, which then selected manufacturers that
could handle the jobs quickly. In less than two months most H&M stores had 5
to 10 new vest styles in stock.
One of the secrets to H&M’s speed is decisiveness. The people in charge of each
collection can dream up and produce new fashions on their own authority. Only
huge orders require approval from higher ups. “We have a flat organization. We
have a shorter way to a decision,” says Sanna Lindberg, president of H&M
Hennes & Mauritz USA. That makes H&M fashionable in more ways than one.
Source: Steve Hamm, “SPEEDDEMONS,” BusinessWeek, March 27, 2006, 70-71. 6-16
 Targeting and Positioning
Product Strategy

Positioning Strategy

Promotion Distribution
Strategy Strategy
Market Target

Price Strategy

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