2 Discussion Marketing Management
Serenity3203
2DiscussionMarketingManagement.docxRequired Reading for this week:
· Chapter 3
· Chapter 4
· Chapter 5
Marketing Management
M.O.A.
For this week's lecture, please listen to the podcast and/or read the transcript below.
This week you’re starting out with a look at the next phase of a marketer's work - the performance of an "opportunity analysis", or "market opportunity assessment" (you'll see it referred to as M.O.A.- you might hear someone say, "let's do a MOA on it right away"). To conduct an MOA, you need to look at three fundamental concepts in marketing: Segmentation, Targeting, and Positioning which are addressed in your text.
1. Segmentation.
First off we need to identify the many "segments" of the market which are of potential interest to the firm. This is called "segmenting" the market. There are a number of ways to segment markets and some of the more straight forward methodologies are demographic and geographic segmentation. BTW, your text does an outstanding job explaining “segmentation” so I won’t stay long here.
Demographics look at the important variables of income, sex, age, occupation through which we can identify the market segments of most interest to us. I'm surprised, however, to find that very little is said about the psychographic, or lifestyle, measures that are so important in consumer goods marketing.
2. Targeting.
The process of segmenting markets takes a great deal of effort, but once you can identify viable markets, or segments, the real job begins. You might be able to identify attractive markets in three different countries, but someone must make the decision to go with one in preference to the others. Of course, the decision will hinge on the size and profitability of the segment. Even in the sophisticated and resource rich multinational firms a market development strategy is developed around a PHASED entry into SELECTED markets. A promising market is likely to attract firms seeking to capitalize on an available opportunity. As the number of firms interested in sharing the pie increases, the degree of rivalry increases.
So! Once an opportunity is identified, then the market is targeted by a firm. This is done in a two-step process. First, the firm must evaluate the attractiveness of each segment. Second, the firm must then select the target segment(s) in the market which best match the product or service they have to offer.
In evaluating different market segments, the firm must look at three factors, namely segment size and growth, segments structural attractiveness, and company objectives and resources.
The first question that a company should ask is whether a potential segment has the right size and growth characteristics. The "right size" is a relative matter. Large companies prefer segments with large sales volumes and often overlook or avoid small segments. You can think of lots of companies that do this, right? But it works both ways: Small companies in turn avoid large segments because they require too many resources.
Next, a segment might have desirable size and growth and still not be attractive from a profitability point of view.
Third, the company objectives and resources must be examined. Even if a segment has positive size and growth and is structurally attractive, the company needs to consider its own objectives and resources in relation to that segment. Some attractive segments could be dismissed because they do not mesh with the company's long-run objectives. They may be tempting segments in themselves, but they do not move the company forward toward its goals. At worst, they would divert the company's energy from its main goals.
Now ... even if the segment fits the company's objectives, the company must consider whether it possesses the requisite skills and resources to succeed in that segment. Each segment has certain success requirements. The segment would be dismissed if the company lacks one or more necessary competencies and is in no position to acquire the necessary competencies. But even if the company possesses the requisite competencies, that is not enough. If it is to win in that market segment, it needs to develop some superior advantages to the competition.
In other words, as a general rule... the company should not enter markets or market segments where it cannot produce some form of superior value.
Because of evaluating different segments, the company hopes to find one or more market segments worth entering and the Target Market Selection phase begins. The company must decide which and how many segments to serve. A target market consists of a set of buyers sharing common needs or characteristics that the company decides to serve. The company can consider five patterns of target market selection.
The problem, of course, is that you stand to lose some substantial business to competition if you ignore other market segments. But at least you're in a position to make a rational business decision if you've taken the time to segment and identify the many pieces of the market.
The process of segmenting markets takes a great deal of effort, but once you have identified viable markets, or segments, the real job begins. Someone (you, the marketing person) should lay them all out on the table and determine which ones to go after. Here is where marketing careers are won or lost, as tough, often irreversible, decisions must now be made.
W2 Video
Click the link to watch your W2 video:
Segmentation, Targeting, and Positioning--McDonald's
https://www.youtube.com/watch?v=c2qUqhpXVFA&feature=youtu.be
