Segmentation Targeting and Positioning
The Theoretical Concept: Segmentation component of the STP model.
Market segmentation, targeting and positioning are very important to a business. The segment component of the STP model is arguably the starting point of many businesses aiming at establishing a focused market base. Many companies are arguably growing into the strategy of focusing on a specific market target and developing products unique to that segment. According to Week 7’s notes, the segmentation component of the STP model classifies consumers depending on their needs, tastes and preferences and then it analyses the consumer traits of the said market group. With the information, a company can then use the needs of the customers to determine whether they can come up with a product uniquely designed to meet the group’s requirement (McDonald et al., 2003). Kotler et al., 2014 argues that marketing is not only concerned with making consumers buy products. Instead, it is a set of technical, psychological and behavioural processes aimed at ensuring customers become satisfied with the products they purchase.
Before a company produces any product, they must profile their target market to ensure they take full advantage of their segment. According to Marken 2003, modern marketing techniques are entirely dependent on the needs of consumers. Wedel and Kamakura, 2012 argue that different variables can be used during market segmentation. Researchers should analyze the image, psychographic, demographic, behaviouristic and geographic components of their target segment before making a conclusive report. Therefore, according to week 7’s notes, these variables in a market segment should be accessible, measurable, sustainable and practical.
Application of the Theory
Using the video on the BMW 1 series, one can identify various components of market segmentation that have been used to come up with the product. Arguably, the company first identified the need for fuel efficiency, ease of use, technology and innovation in the market. It grouped a market segment which requires all three components together and in so doing, they developed the vehicle in terms with the consumer needs. First, from the video, the lady’s profile can reveal different characteristics of the target market for the BMW 1 series. She arguably has a high taste for class and elegance, which is visible by her mode of dressing, her non-verbal cues and interaction with the car (YouTube, 2019). Arguably the sedan is modelled towards people with high technology averseness. The vehicle has different innovative components such as the voice input controls, or how it can automatically reverse. Finally, all these components are fitted into a small-sized vehicle which assures convenience and style.
From the second video, the BMW 7 series targets a different market segment. First, from the video, one can decipher that the man is a business person in search of a convenient vehicle for his operations. The company visibly targets an executive class. The vehicle is fitted with executive and premium leather seats to ensure comfort and class (YouTube, 2019). Moreover, the vehicle also offers all-weather drive convenience, which means that no business functions might be put to a halt due to poor weather. Arguably the marketing plan towards the sale of the vehicle targets people in search of a sturdy vehicle. The vehicle is modelled to be usable in all weather conditions. for example, when he starts driving, the vehicle brings down the window tints for better night visibility.
Week 8 Branding Strategy
The Theoretical Concept: Brand culture
Branding is essential for any company. Customers are often propelled to purchase products that they are familiar with or whose brand is well recognized in the market. Therefore, it is paramount that each company works towards creating a competitive brand. The company has to deliver its intended brand to the market with consistency, authority and competitiveness, and therefore they must develop a pristine brand culture (Hatch & Schultz, 2008). Therefore, according to the week 8’s lecture notes, many companies strive to build and maintain a reputation within their market region. This is because a brand name can ruin or build a company’s chance of success. Roth 1995 argues that the process of establishing a brand must be customized to a company’s motives, image and performance. On that note, brand image and culture formation involve a series of steps.
From the week, I learnt that for a company to build a competitive brand culture, they must first conduct research on the target market. The process of brand culture formation involves defining a company’s brand and making sure consumers are aware of the identity (Srivastava & Kamdar, 2009). Essentially a brand should incorporate the mission and values of a company, and all employees should be trained to work towards achieving these goals. Balmer et al., 2013 argues that good brand culture has a wholesome effect not only on the company but also on its economic environment. This means that a company’s profits expand; they get loyal customers and employees. Schroeder et al., 2014 comments further that a good brand culture infuses a company’s brand into all the daily and operational activities of the firm. Essentially each employee is significantly obsessed with the company’s brand and continually markets it in the industry.
Application of Theory. Research Question to be addressed: “How has Lorna Jane Ltd built a brand culture, and what effect does this have on the customer?”
Lorna Jane Ltd has indeed grown over the decades to be a respectable designer of women’s outfits and sportswear. The company aims at offering the best possible quality in sportswear for ladies while assuring competitive prices for their products. Through an effective brand culture, the company has surprisingly mastered its customers’ needs, tastes and preferences. Therefore, every piece of clothing they make is tailored towards quality and durability (Nash, 2016). Customers ultimately feel very proud of the brand and are not afraid to share it around. Arguably, since the company’s inception, the owner, Lorna, has continually been invested in offering an emotional connection with the outfits.
There are different advantages of Lorna Jane’s brand culture as it relates to customers. First, according to Horton et al., 2016, the company is invested in customer satisfaction and feedback. Arguably, the company’s brand is modelled towards healthy living, aerobics and the company’s motto, “Active Living” is evidence of that. Every product is essentially built in consideration of what consumers require and need in their life. For instance, the company advocates sustainability through its brand culture. This is done by carefully producing durable products that do not easily wear and tear. Ultimately, the products are less harmful to the environment, and therefore customers remain loyal to the brand. Further, the company specializes in women’s wear clothing only, which means that customers, women, will easily have a go-to store for all their sporting needs.
Week 9 Pricing Strategy
The Theoretical Concept: Pricing Objectives
After the production process is finalized, a company’s next objective is to set a price for its products. From the week’s reading, I learnt that for a business to be a going concern, it must run at a profit or break-even point. However, the former is the overall goal for many organizations because, without revenues, many operations may fail. Essentially, each business adopts different pricing strategies depending on its objectives and motivations. All in all, the price of business products should always be in line with the company’s strategic plan. Prices can also be influenced by a variety of factors such as market entry, competition, government policies and costs (Haron, 2016). For a free market economy, each country is allowed to set prices as high or as low as their customers are willing to pay. Therefore, there are different pricing objectives as described below.
First, price should be analyzed as a value rather than a quantity of money set on a product. This indicates that whatever a company values most in its mission will determine the price of its products. For one company, the price may be decided upon the intended rate of return for the shareholders (Lanzillotti, 1958). This means that the company’s goal is to maximize profits and ensure that shareholders investments are paid back. Essentially, many businesses may run on the said criteria where the management deliberates on how much profit they would like to get from a product. The strategy also takes into account the different costs invested in making the product. Secondly, a company’s pricing objective may be to match or beat the competition (Shipley, 1981). This could be detrimental to a company, especially when the companies do not operate under similar environments, or when one company enjoys economies of scale. Essentially a company researches the prices of similar goods sold by the competition and the prices their commodities at a similar or lower level. Also, companies can alter their prices to increase sale volumes. This can be especially efficient for new companies to introduce a new product into the market or stock clear a failing product.
Application of Theory. Research Question to be addressed: “What are the benefits and disadvantages of using a low price strategy?”
Different pricing strategies may work for or against a company. Essentially, a pricing strategy affects the company’s profitability, positioning, market share and competitors. A case in point is the price strategies employed by Coles and Woolworths. There are different advantages to the low price strategy. To begin with, Coles and Woolworths have gained significant positioning in the minds of consumers as the cheapest suppliers in the country. From Coles advertisement video, their pricing strategy is to ensure that their prices are always at the lowest in comparison with the market (YouTube, 2012). Woolworth, on the other hand, focuses on always reducing the prices of their commodities (YouTube, 2014). For both stores, low prices assure high sales volume, market share and positioning in the minds of consumers.
On the other hand, the pricing strategy leaves the two companies vulnerable and at a disadvantage. First, low pricing can only be profitable when the firm’s sales remain significantly high enough to cover all the expenses. If the market share does not cover the company’s costs under the set prices, the two stores will ultimately run at losses (Noble & Gruca, 1999). Further, the companies are at a disadvantage because of the competition. From the week’s notes, it is evident that some competitors, such as Aldi may overtake the companies because they run profitably but use better pricing strategies such as discounting.
Week 10 Communications Strategy
The Theoretical Concept: The message component section of the 6M Communications Strategy.
For a company to successfully market its products, it must employ an efficient communication strategy. From the week’s readings, I learnt about the 6M communication strategy and the message component section resonated with me. The lecturer’s notes reveal that the message component of the 6M strategy determines the specific points to be communicated. Essentially, the message components act as a bridge between the proceeding elements of the communication process (Guffey, 2003). It determines whether the consumer will develop interest or desire for the product. A message communicates the company’s values, ideas and intentions about the product. Therefore, a message should be modelled to convey the emotional aspects of a product (Bolen et al., 1973). Additionally, the communication process should be consistent and effectively planned to ensure the company sends the intended message. Inconsistency or improper planning of the messaging component leads to the transfer of mixed signals that may deter the marketing objective.
The message is first encoded in different forms such as a video, song or even through non-verbal communication channels. Afterwards, the message is distributed through different channels such as media station, social media and magazines (Rowley, 1998). The lecturer’s notes describe that the final step is the decoding process after the consumer receives the message. Equally important, the message should be transmitted through the right channel. Besides, many marketing messages may fail to meet their intended objectives if they are not modelled towards meeting consumer tastes and needs. A company should conduct detailed market research on its intended target market to identify their specific requirements (Holm, 2006). This may include language choice, common personality traits, perceptions, norms and cultural values of the specific groups. An effectively constructed message ultimately ensures that the customer is attracted to the product without further coercion.
Application of Theory. Research Question to be addressed: “How does a firm, such as TechTogs, frame its message to potential customers?”
To effectively frame a message, a company such as TechTogs must first consider some various attributes of the product, message and intended consumers. Arguably an effective message design delivers positive outcomes on the consumers and the company’s strategic objectives. First, the company deals with wearable technological inventions. Essentially these gadgets are already available in the market, and therefore the company should aim at developing an appealing and unique message to the consumers (Gregor & Gwiaździński, 2020). The message should be directed towards technologically versed people with high demand for new innovative ideas. So, for instance, the company should construct their message to explain the health benefits of their new devices or how the devices ease the lives of consumers.
Arguably, the company should also ensure that their message is relevant to the product they are selling. For instance, the message should revolve around the usability of the new tech devices and how they improve everyday activities of users. The company’s intention towards potential customers is to persuade, convince and explain why the products are worth buying. Innovative devices are often considered as leisure accessories, and therefore a company should model their message to convince consumers (Zhang et al., 2017). The message should potentially boost sales and increase profits for the company as long as the consumers are persuaded to invest in the products.
References
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