Discuss about the Targeting And Positioning Marketing Strategies.
The global competitiveness in the modern corporate world has led to increased concerns to many firms to develop effective marketing strategies in a move to gain a competitive advantage in the market by helping or focusing on satisfying consumer needs. Positioning and segmentation is, therefore, a distinct part of any company marketing strategy and provide the company with practical tools that enable them to focus their efforts in enhancing customer satisfaction by meeting their needs in a way that is superior to their competitors (Hooley 2012, p. 183). The effectiveness of business strategies is dependent on its ability to adopt effective marketing strategies that can successfully enhance the company’s’ brand performance in the market. To develop these strategies, the management team, as well as the marketing department, has to have a clear understanding of their markets, the needs and demands of their customers as well as the marketing strategies employed by their competitors (Solomon, Dahl, White, Zaichkowsky, & Polegato 2014, p. 4). One effective strategy to achieve this is through market segmentation, targeting and positioning strategy and concepts. This essay, therefore, seeks to provide an understanding of the above concepts and how different companies have adopted the ideas to improve their marketing performances and gain a competitive advantage in the current market.
Many companies in enhancing the existing marketing strategies have embraced the market segmentation, targeting, and positioning strategy. The company or firms marketer has the responsibility to create awareness of their brand and products amongst their consumers. Differentiation of the marketing strategies is essential to ensure adequate product and brand promotional activities guided by the different individual needs and demands (Armstrong, Kotler, Harker, & Brennan 2015, p. 15). Market segmentation can, therefore, be defined as the process of creating small market groups or segments within the broader market with the aim of bringing together the consumers or similar brands or those with same requirements, needs, and interests. Targeting is the second step after an organization has developed its market segments and involves the processes of devising various marketing strategies as well as brand promotional schemes in accordance to the tastes and preferences or consumption behavior of the customers. On the other hand market positioning is the last stage of STP cycle and involves the process of creating an image of the company products of promoting the brand image in the minds of consumers (Cantallops & Salvi 2014, p. 46). Market positioning plays an essential role in helping the organization create a perception of the product in the minds of the company target audience. The marketing concepts aim to improve the companies to serve specific customer needs in the market.
Segmentation process involves finding out the existing consumers and their different needs in the market. Its primary aim to identify what changed consumers need from the market as most companies believe that specializing in meeting the needs of one group of consumers over another as the best strategy to enhance business profitability. For example, the auto industry or market is characterized by different consumers with some consumers more interested with the roominess and safety features of their automobiles while another group of customer segment may be concerned with the performance and speed of the machines (Lantos 2015, p. 36). In most cases, the company may not concentrate on meeting the demands of all groups or market segments but focusing their efforts on satisfying the requirements of a particular customer or consumer segments. To achieve specific customers’ needs market segmentation can be analyzed from three different perspectives. The first way of meeting customer needs will be through the use of differentiated strategy whereby the firms seek to develop market segmentation by treating all the consumers equally without any efforts to focus on a particular market segment. Secondly, market segmentation can also be achieved through a robust strategy where the firm seeks to focus on one of the many existing consumer segments while leaving the other sections to their competitors (Cross et al. 2015, p. 535). A company may choose to focus on developing a market segment to offer low-cost goods which enables them to attract consumers who are price sensitive and those by which the consumption behaviors are price sensitive. Lastly, the company can also adopt a differentiated strategy where the focus is majorly on a particular group or market segments, and most firms seek to focus on sectors which they gain maximum profitability.
Due to the existence of different variable influencing market segmentation, there is a need for the organization or business marketers to determine which variables will be most useful according to the organizational objectives in distinguishing a different group of consumers. Therefore segmentation can efficiently be achieved in an organization by focusing on the understanding of the various demographic variable, different consumer behaviors as well as by understanding the benefits sought by the consumers from consuming a particular brand or even purchasing good and services from one specific company (Priem et al. 2017, p. 7). A company can, therefore, develop a market segmentation by identifying the needs of individual consumers in a given locality or region. It can also seek to build market segmentation by classifying consumer needs by their consumption behaviors. Lastly, most consumers consume specific products or acquire a particular service based on the benefits the product or service offers to them. Such firms will, therefore, focus on developing quality goods and services which will help the consumers satisfy their wants.
Targeting is the second process in the STP cycle, and therefore it is developed after a firm has achieved or established a specific market or consumer segmentation. A company or business can seek to establish a market target by considering several factors. The first factor would be to understand the service provider of the existing segments by other companies or manufactures. It would be more difficult for the company to venture into a new market segment that is already served efficiently by other companies and therefore the role of the marketers is to identify the markets where needs have not been served well (Sawhney et al. 2017, p. 4). It is also essential for the marketers to understand how large the market segment is and its expected growth rate. In most cases, companies will seek to establish themselves in industries or businesses which are rapidly growing. The last and most important factor to consider before targeting a particular market segment would be to understand whether the companies have strengths or capability that will assist in appealing to a specific group of consumers. For example the firm or business may have established an excellent reputation in the market by the provision of quality and affordable products and therefore convincing the segment to shift their loyalty to another brand may not be easy. A good example is the Mc Donald’s Company that has established itself in the United States as one of the best Fast Foods companies offering consistent quality products and family friendly foods. It would be difficult to appeal the market segments differently. The company regarding developing other market strategies can focus or target the families in search of consistent quality products as well as the clean restaurants.
The last process in the STP cycle is the positioning strategy or process and involves implementing the company targeting strategy. This is very important as it helps in creating the brand perception in the minds of the consumers. An active positioning marketing strategy can achieve by strategically positioning themselves into three broad categories. The first positioning strategy would be positioning themselves as operationally top firms (Wirtz & Lovelock 2017, p. 7). This means that the company will seek to focus on maintaining a substantial competitive advantage through exceptional operational efficiency. It enables the company or business to provide reliable services to the customers at reliable prices than those of their competitors. Companies or firms focusing on attaining a competitive edge in the market through operational efficiency always lay major emphasis on offering service or products at low cost. They put less value on the customizing their services to particular groups or individual customers.
Secondly, the companies or businesses can position themselves in the market as private customer firms by focusing on meeting the needs of individual customers very well. Therefore the companies give less emphasis on efficiency by focusing more on what is needed by their customers. They focus more on the business reliability and responsiveness to customer’s demands (Qian 2017, p. 2). An excellent example of intimate customer firms may include the IBM as well the Wal-Mart Inc. lastly a company may choose to position itself in the market as a technologically excellent firm which means that the company can offer quality technological products by the use of the current or the latest technology and maintaining leadership in the industry or the market through leadership innovation. However, the strategy cannot be efficiently compared to the operationally excellent firms. The products should, therefore, be developed or changes are made according to the needs of the customers. Intel Company which manufactures computers and software components has established itself in the market as a technologically excellent firm offering quality and up to date technological innovations globally (Gengler & Mulvey 2017, p. 237). If the sound current positioning strategy is less attractive to customers, the firm may choose to develop a repositioning strategy which means it will attempt to change the existing consumer perceptions of a brand. However, this is not easy as it might be too costly to the company implying that the company marketers should be cautious in developing their STP marketing strategy.
Different companies have developed and implemented the STP marketing strategy to create their own success stories. Effective implementation of the concepts plays a significant role in enhancing business growth through increased competitive advantage and increased consumer base by satisfying consumer needs and demands. Some of these companies include the South West Airlines, Mc Donald’s Company and the IBM Company (Camilleri 2018, p. 72) These companies operate in different industries and have embraced the use of segmentation, targeting and positioning concepts to enhance their marketing strategies which in turn result in increased business performance and profitability as well as increased consumer satisfaction with the goods and services provided by the company.
Southwest Airlines Company was established in the year 1967 a forms part of the primary United States Airlines and has its headquarters in Dallas, Texas.it is the most significant North American low-cost carrier and has been able to employ over 55 000 employees while the company net income as at 2017 was $ 3.488 billion. The company success story is attributed to the effectiveness of the company business model and marketing strategies (Walters & Bekker 2017, p. 17). The company business model is aimed at providing low-cost carrier services to its customers and to attain maximum customer satisfaction levels and has been a significant inspiration even to other low-cost carriers globally. The company has developed a competitive strategy that is focused on combining a high level of the employee as well as aircraft productivity with low costs services.
Therefore based on the company low-cost carrier model the company first segmentation is that it seeks to serve the cost and value sensitive or conscious customers in the airline industry including the small business executives as well as those customers traveling for short distances. The second market segmentation involves the families who are value conscious as well as the senior citizens in the country while the last segmentation is regarding the demographic concentration (Caiazza &Volpe 2017, p. 184). The company has however laid great emphasis on customer service and differentiation strategy of rapid reward as a way of increasing competitive advantage and also for maintaining customer loyalty. The company based on the low-cost business model the company targeting strategy is aimed at targeting the small business owners, the young adults, middle-class families as well as those traveling for short distances. The company can, therefore, be positioned to be an operationally excellent firm.
Mc Donald’s company is one of the largest fast-food companies in the United States and was founded in the year 1940as a restaurant company. The company has been able to build a reputation with its brand in the fast food market by a continuous provision of quality and family friendly. The company business model has been developed under the power of the company franchisees, the suppliers as well as the employees who work together to achieve a common goal (Jaworski 2018, p. 67). Regarding market segmentation, the company has been able to focus on providing quality family fast foods to different groups of people conscious of the quality of foods they take and the ability of the products to satisfy their needs. The company targeting strategy, therefore, aims at a particular group of consumers based on their consumption behaviors. The company thus from its success story has been positioned as a customer-intimate company.
IBM Company is an American leading computer manufacturer which was founded in the year 1911 as computing, tabulating and recording company. The company has a significant market share in the United States as well as abroad. The mission of the company is to deliver high value to their customers. The company operates by offering solutions to different market segments including; cognitive solutions, global financing, systems, comprehensive business services, technology and cloud services. In the determination of its market segmentation, the company has successfully employed a mix of psychographic, geographic and demographic segment variables (Hult & Ketchen 2017, p. 23). This has enabled the company to reach out to their customers efficiently and to increase business performance not only in the United States but also globally. The company success has also been attributed to its ability to employ the use of particular targeting strategy to make specific products and services more available to their customers based on their requirements. The company has been able to hire the benefit based positioning strategy to position itself as company or brand that creates value for their shareholders across the company value delivery system. Therefore based on the above analysis the South West Airline company can be said to be operational efficient regarding their segmentation, targeting and positioning strategy in the market (Braun et al. 2017, p. 124). On the other hand, the Mc Donald’s Company is focused on developing customer relationships by producing products which meet the needs of consumers and therefore it can be said to be a customer-intimate company. The IBM Company has developed an STP strategy that is focused on benefits to be achieved by the customers. However, some companies such as IBM can combine various approaches by focusing on value creation as well as the benefits which the customers will obtain from using their products.
Different sectors describe different markets and therefore the need to develop differentiated marketing strategies. Every industry has different consumers with different needs and thus understanding different areas will be critical to the development of effective marketing strategies. The first industry would be the retail industry which has experienced a rapid growth rate in the modern corporate world. The second industry would be the technology industry which has revolutionized the modern business world and lastly I would focus on the service sector concerning the transport industry. From the above analysis, the service industry is majorly focused on the quality of services provided by the company. Therefore, I recommend that every the service sector target market should be aimed at developing intimate customer strategies to improve the quality of services offered. Provision of unmatched quality goods and service will give the company an increased competitive edge in the market.
Secondly, I recommend that the technological industries should focus on developing marketing strategies by adopting the technical excellence positioning strategy. This will help the company improve innovative solutions and increase competitive advantage.
Lastly, based on the importance of value creation to customers in every business, the retail industry that has become very competitive in the modern corporate world should adopt the operational excellent positioning strategy as it will help the company in providing reliable and cost-effective services on the market and contribute to increased business growth.
List of References
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