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Strategic Role of Marketing
Identifying market segments
The quest of competitive advantagess
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Recommended: Strategic Role of Marketing
Marketing plays a critical role in a business. It is the task of marketing to create more revenue to the business. Simply “Marketing” can be described as the communication between the business and the customer. Process of marketing is simple as giving the right goods to right person at right time. Therefore it is more than important to manage marketing in an efficient and effective way. There are several marketing strategies to follow in order to create a good marketing plan. Segmentation and target Market segmentation is an strategy that is used to narrow down the broad targeted market. Market segmentation strategies are generally used to identify and define the target customers. There are several types of market segmentation,
Geographic
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As an example; I’m the marketing manager of “Winter Clothing” which is based in United Kingdom. As the company name defines we manufacture winter clothes. As the Marketing manager, I should find the customer base to market our product. If I follow the “Segmentation Strategy”, I would not be marketing our products in a tropical country like Maldives or Sri Lanka.
2. Product Marketing Product Marketing is the process of promoting and selling a product to an audience. Product marketing deals with marketing the products to prospective customers.
3. Price & Competitive advantage Pricing strategy is important to a business, without right pricing the products won’t be attractive to the customers. Pricing strategy in marketing is identifying the optimum price for a product. Usually pricing strategy is mix up with “Four P” strategies to get an effective outcome. Pricing strategy is critical component for a business as it is directly focused on revenue generating of the business. There are 6 significant pricing strategies that are used
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Odd-Even pricing is the strategy of setting a price at an odd number to connote a bargain and at an even number to suggest quality.
Prestige pricing is the strategy of setting a higher price than normal so that consumers will perceive it as being of higher quality, status, or value. As an example, “Winter Clothing” decided to provide a pair of gloves together with their new Winter Jackets as an one package. This defines that the company tried to follow Bundling strategy for their new product. Competitive advantage is another factor in business success. Competitive advantage is a condition or circumstance that puts a company in a favourable or superior business position. There are 3 sectors within this strategy.
Cost Competitive Advantage is the company’s ability to produce a product or service at a lower cost than its competitors.
Differential Competitive Advantage is the company’s ability to provide a unique product or service that offers something of value besides a lower price.
Niche Competitive Advantage is the company’s ability to target and effectively serve a single segment of the market within a limited geographic
As we learned from Chapter 12, price must be carefully determined and match with firm’s product, distribution, and communication strategies. (Hutt & Speh, 2012, p. 300) Therefore, there should be a strong market perspective in pricing. In order to build an effective pricing policy, marketers should focus on the value a customer places on a product or service. One of the most effective ways to do so is differentiating through value creation.
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
Segmentation is the process of identifying different macro-groups of customers (i.e. segments) based on their common characteristics. The process of choosing a target segment, on which to focus marketing activities on, is a process named targeting.
Segmenting the market will allow the company to focus more clearly on targeting the right customers with the right product that better satisfy their needs.
Competitive Positioning is defined as how you will differentiate your products or services thereby creating a value for in the market. A good positioning is influenced by market profile, customer segments, competitive analysis and methods of delivering value. (Marketingmo, 2014)
Segmentation is the process of determining the breakdown of the target market into smaller specific variables that make it easier to evaluate. Gabbott M (2004, p 159) describes the consumer related segmentation variables as being Geodemographic, Psychographic and Behavioural.
A sustainable competitive advantage is making your company have a unique value position, in a competitive environment, while defending the supported proposition. These advantages need to be constantly updated in order that the competitors remain on the back foot. Unable to keep abreast of the shifting advantages and the difficulty to imitate or implement changes that take place. Such properties of sustainable competitive advantages that can be changed, include;
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
Competitive advantage can be succeeded simply when the organisation’s merchandises or facilities are perceived as adding extra significance for its consumers than its rivals, and therefore reach a place of comparative benefit (Louw & Venter, 2013). For example, Mango airlines constructs its competitive advantage on a mixture of business level strategies that object to bid worth for currency to consumers through a low-cost organization and well-organized processes with an above-average use of their possessions.
Pricing. Our product is priced lower than our competitors in our industry. Even though our competitors have a different kind of product compared to us.
Marketing segment was firstly introduced by Wendell Smith in 1956; he argued there is an emergency of marketing segmentation with the framework of imperfect competition and he differentiate segmentation strategy with product differentiation. He suggested that segment strategy is more based upon ‘development on the demand aspect of the market and represented a rational and more precise adjustment of a product and marketing effort to consumer or user requirements '. (Smith, 1956, p.3) He argued that market segmentation functioned as viewing a heterogeneous market as numerous smaller homogenous segments, which allowed ‘good and services produced for or presented as meeting their needs with precision '. (Smith, 1956, p.4) Later, th...
We can define competitive advantage as simply what a given company excels best at. This could be the distinguishing factor as to why consumers purchase from your company and not the competition. This could also be understood from the perspective of quality that a business can create for the consumer.
COMPETITIVE ADVANTAGE - The one skill that stands out and makes that firm unique and stand out from their close competitors.
Competitive advantage is described as a condition that would put a particular firm in a superior position as compared to the rest of the firms in the market in that industry. Competitive advantage enables a firm to generate greater value for the firm that is allows the firm to generate a higher sales volume and retain more competitors as compared to their competitors. It gives the firm an edge over its competitors. There can be various different types of competitive advantages. Some of them include the customer retention rate and product offerings that is new innovative product as compared to their competitors, among others.