2
The Role of IMC in the
Marketing Process
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights rese
Under Armour Protects Its House
Under Armour Protects Its House
• Keys to Under Armour’s success
– Niche markets
– Strong product positioning
– Unique brand identity
– Strong brand reputation
Marketing and Promotions Process Model
Opportunity Identifying Product Promotion
analysis markets decisions to final
Promotional buyer
decisions
Pricing • Advertising
decisions • Direct
Competitive Market marketing
analysis segmentation Ultimate
• Interactive
Internet/ consumer
marketing
Channel-of- • Sales Interactive • Consumers
distribution promotion • Businesses
decisions
• Publicity
Target
Selecting a and public
marketing Promotion
target market relations
• Personal to trade
selling
Positioning Resellers
through
marketing
strategies Purchase
Marketing to a Lifestyle
Padres Pitch to the Fans
*Click outside of the video screen to advance to the next slide
Marketing Strategy and Analysis
A strategic marketing plan-evolves from an organization’s
overall corporate strategy and serves as a guide for specific
marketing programs and policies.
Example-Abercrombie & Fitch decided to reposition the brand
as part of the overall corporate effort to attract a younger
audience.
Steps of the Marketing Strategy and Planning
A.Market opportunities are areas where
*there are favorable demand trends,
*the company believes customer needs and opportunities are
not being satisfied, and
*where it can compete effectively.
Steps of the Marketing Strategy and Planning
For example, the number of people who exercise has increased
tremendously in recent years, and the market for athletic
footwear has reached over $13.5 billion.
B. Competitive Analysis
The manager must carefully analyze the
competition to be faced in the marketplace.
-This may range from direct brand competition to
more indirect forms of competition, such as
product substitutes.
An important aspect of marketing strategy development
is the search for a competitive advantage (something
special a firm does).
-Ways to achieve a competitive advantage
I. Having quality products that command a premium price,
ii. providing superior customer service,
iii. having the lowest production costs and lower prices,
iv. dominating channels of distribution.
v. through advertising that creates and maintains
product differentiation and brand equity.
For example, the strong brand images of Colgate
toothpaste, Nike shoes, Kodak, and McDonald’s show
competitive advantage in their respective markets
(Exhibit 2-2).
C. Target Market Selection
After evaluating the opportunities presented by various
market segments, including a detailed competitive
analysis, the company may select one, or more, as a
target market.
-This target market becomes the focus of the firm’s
marketing effort, and
-goals and objectives are set according to where the
company wants to be and what it hopes to accomplish in
this market.
-These goals and objectives are set in terms of specific
performance variables such as sales, market share, and
profitability.
-The selection of the target market (or markets) in which
the firm will compete is an important part of its marketing
strategy and has direct implications for its advertising and
promotional efforts.
C. Target Market Selection
-As few products can satisfy the needs of all consumers,
companies often develop different marketing strategies to
satisfy different consumer needs.
-The process by which marketers do this (Figure 2-2) is called
target marketing and involves
four basic steps:
1.identifying markets with unfulfilled needs,
2.segmenting the market,
3.targeting specific segments, and
4.positioning one’s product or service through marketing
strategies.
The Target Marketing Process
Identify
Identify markets
markets with
with unfulfilled
unfulfilled needs
needs
Determine
Determine market
market segmentation
segmentation
Select
Select market
market to
to target
target
Position
Position through
through marketing
marketing strategies
strategies
1. Identifying Markets
-When employing a target marketing strategy,
the marketer identifies
*the specific needs of groups of people (or segments),
*selects one or more of these segments as a target, and
*develops marketing programs directed to each.
-Reasons for increasing applicability of this
approach in marketing :
•changes in the market (consumers diversity in their
needs, attitudes, and lifestyles);
•increased use of segmentation by competitors; and
•managers are trained in segmentation and realize the
advantages associated with this strategy.
1. Identifying Markets
-Target market identification isolates consumers
with similar lifestyles, needs, and the like, and
increases our knowledge of their specific
requirements.
-The more marketers can establish this common
ground with consumers, the more effective they
will be in addressing these requirements in their
communications programs and informing and/or
persuading potential consumers that the product
or service offering will meet their needs.
A Product for Every Market Segment
Market Segmentation
-The marketer attempts to identify broad classes of buyers who
have the same needs and will respond similarly to marketing
actions.
So, market segmentation is “dividing up a market into
distinct groups that
(1)have common needs and
(2) will respond similarly to a marketing action.”
The segmentation process involves five distinct steps:
1. Finding ways to group consumers according to their needs.
2. Finding ways to group the marketing actions—usually the
products offered—available to the organization.
3. Developing a market-product grid to relate the market
segments to the firm’s products or actions.
4. Selecting the target segments toward the firm directs its
marketing actions.
5. Taking marketing actions to reach target segments
The Marketing Segmentation Process
Find
Find ways
ways to
to group
group consumers
consumers
according
according to
to their
their needs
needs
Find
Find ways
ways to
to group
group marketing
marketing actions
actions
available
available to
to the
the organization
organization
Develop
Develop aa market/product
market/product gridgrid to
to relate
relate the
the market
market
segments
segments toto the
the firm’s
firm’s products
products andand actions
actions
Select
Select the
the product
product segments
segments toward
toward which
which the
the
firm
firm will
will direct
direct its
its marketing
marketing actions
actions
Take
Take marketing
marketing actions
actions to
to reach
reach target
target segments
segments
What do NASCAR, Coors, and Unilever know?
Bases for Segmentation
Psychographic
Psychographic Demographic
Demographic
Customer
Customer
Characteristics
Characteristics
Socioeconomic
Socioeconomic Geographic
Geographic
Behavior
Behavior Outlet
Outlet Type
Type
Buying
Buying
Usage
Usage Situation
Situation
Awareness
Awareness Benefits
Benefits
Forms of Consumer Market Segmentation
Form General Characteristics
Age, education, gender, income,
Demographic segmentation
race, social class, household size
Regional location (e.g., New
England, Mid-Atlantic, Southeast,
Great Lakes, Plains States,
Northwest, Central, Southwest,
Geographic segmentation
Rocky Mountains, Far West),
population density (urban,
suburban, rural), city or county
size, climate
Lifestyle, personality, interests,
Psychographic segmentation
values, attitudes
Benefits provided by the good or
Benefit segmentation
service
Amount of use (light versus
Volume segmentation
Geographic Marketing
Demographic Segmentation
Psychographic Segmentation
• Dividing the market on the basis of
– Personality-aggressive,extrovert
– Values(Vals2)innovators,thinkers
– Lifestyle
• VALS lifestyle segmentation
– Eight lifestyles with distinctive attitudes,
behaviors, and decision-making patterns
– Combined with estimate of the resources
on which the consumer can draw
Behavioristic Segmentation
Usage
Buying Loyalties
Responses
Benefit Segmentation
PRIZM Cluster Profiles
HIGH
LOW
Test Your Knowledge
The key factor in communicating information about
a brand and differentiating it from competitors is:
A) Its perceived price differential
B) Its integrated promotional strategy
C) The market positioning strategy assigned
it by the manufacturer
D) Its distribution intensity
E) The benefits the brand offers
Selecting a Target Market
-The outcome of the segmentation analysis will reveal the
market opportunities available.
-The next phase in the target marketing process involves two
steps:
(1) determining how many segments to enter and
(2) determining which segments offer the most potential .
Selecting a Target Market
Determine how many
segments to enter
Determine which segments
have the greatest potential
Market Positioning
Fitting the product or service to one or more
segments of the broad market in such a way
as to set it apart from the competition
Developing a Positioning Strategy
What
What position
position do
do
we
we have
have now?
now?
Does
Does our
our creative
creative What
What position
position do
do
strategy
strategy we
we want
want to
to own?
own?
match
match it?
it?
The
The
Position
Position
Do
Do we
we have
have the
the From
From whom
whom must
must
tenacity
tenacity to
to stay
stay we
we win
win this
this
with
with it?
it? position?
position?
Do
Do we
we have
have the
the
money
money toto do
do the
the
job?
job?
Positioning Strategies
How should Attributes
Attributes and
and Benefits?
Benefits?
we position?
Price
Price or
or Quality?
Quality?
Use
Use or
or Application?
Application?
Product
Product Class?
Class?
Product
Product User?
User?
Competitor?
Competitor?
Cultural
Cultural Symbols?
Symbols?
Positioning by Use or Application
Developing a Positioning Platform
1.
1. Identify
Identify the
the competitors
competitors
2.
2. Assess
Assess perceptions
perceptions of
of them
them
3.
3. Determine
Determine their
their positions
positions
4.
4. Analyze
Analyze consumer
consumer preferences
preferences
5.
5. Make
Make the
the positioning
positioning decision
decision
6.
6. Monitor
Monitor the
the position
position
Making the Positioning Decision
Is
Is the
the current
current Is
Is the
the segmentation
segmentation
position
position strategy
strategy strategy
strategy
working?
working? appropriate?
appropriate?
The
The
Checklist
Checklist
Are
Are there
there sufficient
sufficient
How
How strong
strong is
is the
the resources
resources toto
competition?
competition? communicate
communicate the the
position?
position?
Advertising Develops Brand Image
Branding and Product Names
• Brand names often communicate
attributes and meaning
– Safeguard(soap)
– Easy-Off(oven cleaner)
Branding and Packaging Are Linked
Product
Product Decisions
Decisions
BRANDING
BRANDING PACKAGING
PACKAGING
Brand
Brand Advertising
Advertising Has
Has become
become Often
Often
name
name creates
creates and
and increasingly
increasingly customers’
customers’
commun-
commun- maintains
maintains important
important first
first
icates
icates brand
brand exposure
exposure to
to
attributes
attributes equity
equity product
product
and
and
meaning
meaning
A brand name identifies a product or service and often
communicates attributes and meaning.
Brand equity refers to the intangible assets of added
value or goodwill that results from the favorable image,
impression, and consumer attachment to a company,
brand name, or trademark.
Packaging provided functional benefits such as
economy, protection, and storage.
A Package is More than a Container
Pricing Decisions
What
What consumers
consumers give
give
Factors
Factors the
the firm
firm must
must up
up to purchase aa
to purchase
consider
consider product
product or
or service
service
Costs Price
Price Variable
Variable
Costs Time
Time
Demand
Demand
Mental
Mental activity
activity
Competition
Competition
Behavioral
Behavioral effort
effort
Perceived
Perceived value
value
Relating Price to Ads and Promotion
Pricing
Pricing Price
Price must
must be
be consistent
consistent with
with
Considerations perceptions
perceptions of
of the
the product
product
Considerations
Higher
Higher prices
prices communicate
communicate higher
higher
product
product quality
quality
Lower
Lower prices
prices reflect
reflect bargain
bargain or
or
“value”
“value” perceptions
perceptions
Price,
Price, advertising
advertising and
and distribution
distribution
be
be unified
unified in
in
identifying
identifying product
product position
position
AA product
product positioned
positioned asas high
high quality
quality
while
while carrying
carrying aa lower
lower price
price than
than
competitors
competitors will
will confuse
confuse customers
customers
When Price is Not an Issue
Distribution Channel Decisions
Selecting
Selecting
Distribution
Distribution
Channel
Channel Managing
Managing
Decisions
Decisions
Motivating
Motivating
Distribution Intermediaries
Brokers
Brokers
Distributors
Distributors
Distribution
Distribution
Channel
Channel
Intermediaries
Intermediaries Wholesalers
Wholesalers
Retailers
Retailers
Promotional Strategy: Push or Pull?
Push
Push Policy
Policy Pull
Pull Policy
Policy
Producer
Producer Producer
Producer
Wholesaler
Wholesaler Wholesaler
Wholesaler
Retailer
Retailer Retailer
Retailer
Consumer
Consumer Consumer
Consumer
Information Flow
Test Your Knowledge
An ad in a publication aimed at veterinarians explains
why they should recommend Eukanuba cat food to the
owners of the cats they treat. This is an example of:
A) Consumer advertising
B) A promotional pull strategy
C) A harvesting strategy
D) A consumer promotion
E) A promotional push strategy
