Individual Assignment: 600 Words
Segmentation and Product Proposition
In the previous unit, you explored the role of market research in marketing strategies. One role of market research is to determine customer receptivity to new products. In this unit, you examine whether your new, fictitious product is right for your target market by going into more detail in STP strategies.
Many strategies are available within the umbrella terms of segmenting and targeting, including the following:
- Differentiation: Targeting different groups of customers and using different strategies for different groups (e.g. computer retailer places newspapers advertisements for home users, professional magazine advertisements for business professionals and small businesses).
- Concentration: Serving one of several potential segments of a market (e.g. computer retailer targets only businesses and ignores home users).
- Atomisation. Breaking down the market to the smallest detail, often to the individual customer.
Strategies should be chosen based on their appropriateness or functionality for the brand proposition being developed. It is also important to have a good understanding of organisational capabilities when selecting strategies. Of the strategies just listed, for example, one is effective for organisations with only limited resources, whereas another is best employed by organisations marketing high-cost items. Do you know which is which? Your Readings and research will yield this necessary information as you create a segmentation, targeting and positioning strategy with your colleagues.
To prepare
- Building on the learning from previous units, review the Readings and research articles online regarding how market research informs segmenting, targeting and positioning.
- Review Agarwal et al. (2010). Consider the cross-cultural and cross-national models of perceived quality. These relate more to services, but could these themes resonate with products as well?
Shared Activities - 500 Words Required
Shared Activity: Developing Brand Positioning Strategies
In order to be successful, a marketing plan must be strategic. One way to be strategic is to develop a brand positioning strategy that clearly articulates a brand's appeal and value to customers. A brand is something that a consumer will pay more for than he or she would pay for a commodity in the same category. For example, a supermarket in the United States might sell one lemon-lime soda for 50 cents a can. Right next to that lemon-lime soda display is a commodity soda-perhaps a generic brand that carries the supermarket's name-that sells for 25 cents a can. The strength of the first soda's brand lies in how often customers are willing to pay that extra 25 cents to purchase the more expensive brand. The difference between the two prices-25 cents-is the value of the first brand, which, according to one estimate might be worth at least $70 billion over time to an organisation (Ries and Ries, 2009).
In more academic language, a brand is a set of assets (and liabilities) linked to something such as a name or symbol that adds to (or subtracts from) the value provided by a product or a service (Aaker,1996). Brand equity is the added value endowed by the brand name (Farquhar et al. 1991) or, in other words, the value of trust between a consumer and a company. Why do these assets develop around a brand, however? Why do certain customers value one brand over another? Most likely it is because an organisation was able to position the brand to customers in such a way that it meets their needs, whether it conveys a message of quality or whether it evokes feelings such as excitement or safety.
For your Shared Activity, you will bring the concepts of brand positioning and digital marketing to bear on the development of a new brand positioning strategy for a product that fits logically within your chosen Final Project brand's product line. As an exercise in developing your digital marketing knowledge, consider how you would communicate the new brand positioning strategy using digital marketing strategies. The brand positioning strategy must include digital marketing strategies. Insights gleaned from this Shared Activity will be helpful as you continue to develop your marketing plan for an international market for your Final Project.
References
Aaker, D., (1996) 'Measuring Brand Equity Across Products and Markets', California Management Review, 38 (3) pp.102-120
Farquhar, P. H., J. Y. Han & Y. Ijiri, (1991) Recognizing and Measuring Brand Assets, Cambridge: Marketing Science Institute
Ries, A. & L. Ries, (2009) The 22 Immutable Laws of Branding,New York: HarperCollins
To prepare for this
Review the Readings and research scholarly articles to find one or more definitions of brand. How is a branded product more valuable to an organisation than an unbranded or generic product? The articles should be credible and recent (published within the last 5 years).
- Consider the top three brands listed on the Interbrand report. When you see their name or logo or hear their advertising jingle or strapline (i.e., slogan), what are your expectations of any product or service carrying the brand name? In other words, what is the essence of their brand promise? Think of what characterises this promise, such as whether it satisfies purely functional (rational) or representational (personal expression, emotional, symbolic) needs, as de Chernatony (1993) describes. Consider the same questions for the brand you chose for your Final Project.