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Marketingsegmentationenablesacompanytomakemoreefficientuseofitsmarketingresources.Also,itallowsasmallcompanytocompeteeffectivelybyconcentratingononeortwosegments.Theapparentdrawbackofmarketsegmentationis that it will result in higher production and marketing costs than aone-product,mass-marketstrategy.However,ifthemarketiscorrectlysegmented,thebetterfitwithcustomers'
needswillactuallyresultingreaterefficiency.
Thethreealternativestrategiesforselectingatargetmarketaremarketaggregation,single segment,and multiple segment.Market-aggregation strategyinvolvesusingonemarketingmixtoreachamass,undifferentiatedmarket.Withasingle-segmentstrategy,acompanystillusesonlyonemarketingmix,butitisdirectedatonlyonesegmentofthetotalmarket.Amultiple-segmentstrategyentailsselectingtwoormoresegmentsanddevelopingaseparatemarketingmixtoreachsegment.
PositioningtheProduct
Management'
sabilitytobringattentiontoaproductandtodifferentiateitinafavorablewayfromsimilarproductsgoesalongwaytowarddeterminingthatproduct'
srevenues.Thusmanagementneedstoengageinpositioning,whichmeansdevelopingtheimagethataproductprojectsinrelationtocompetitiveproductsandtothefirm'
sotherproducts.
Marketing executives can choose from a variety of positioningstrategies.Sometimestheydecidetousemorethanoneforaparticularproduct.Hereareseveralmajorpositioningstrategies:
1.PositioninginRelationtoacompetitor
Forsomeproducts,thebestpositionisdirectlyagainstthecompetition.Thisstrategyisespeciallysuitableforafirmthatalreadyhasasoliddifferentialadvantageoristryingtosolidifysuchanadvantage.Tofendoffrivalmarkersofmicroprocessors,IntelCorp.launchedacampaigntoconvincebuyersthatitsproductissuperiortocompetitors.Thecompanyevenpaidcomputermakerstoincludetheslogan,"
IntelInside"
intheirads.Asthemarketleader,Coca-Colaintroducesnewproductsandexecutesitsmarketingstrategies.Atthesametime,itkeepsaneyeonPepsi-Cola,beingsuretomatchanyclever,effectivemarketingmovesmadebyitsprimarycompetitor.
2.PositioninginRelationtoaProductClassorAttribute
Sometimesacompany'
spositioningstrategyentailsassociatingitsproductwith（ordistancingitfrom）aproductclassorattributes.Somecompaniestrytoplacetheirproductsinadesirableclass,suchas"
MadeintheUSA."
Inthewordsofoneconsultant,"
Thereisastrongemotionalappealwhenyousay,'
MadeintheUSA'
"
.Thusasmallsportswearmanufacturer,BostonPreparatoryCo.isusingthispositioningstrategytoseekanedgeoverlargecompetitorssuchasCalvinKleinandTommyHilfiger,whichdon'
tproducealloftheirproductsintheU.S..
3.PositioningbyPriceandQuality
Certainproducerandretailersareknownfortheirhigh-qualityproductsandhighprices.Intheretailingfield,SakeFifthAvenueandNeimanMarcusarepositionedatoneendoftheprice-qualitycontinuum.DiscountstoressuchasTargetandKmartareattheother.We'
renotsaying,however,thatdiscountersignorequality;
rather,theystresslowprices.Penney'
stired—andforthemostpartsucceededin—repositioningitsstoresontheprice-qualitycontinuumbyupgradingapparellinesandstressingdesignernames.
Thewordbrandsiscomprehensive;
itencompassesothernarrowerterms.Abrandisanameand/ormarkintendedtoidentifytheproductofonesellerorgroupofsellersanddifferentiatetheproductfromcompetingproducts.
Abrandnameconsistsofwords,letters,and/ornumbersthatcanbevocalized.Abrandmarkisthepartofthebrandthatappearsintheformofasymbol,design,ordistinctivecolororlettering.Abrandmarkisrecognizedbuysightbucannotbeexpressedwhenapersonpronouncesthebrandname.Crest,Coors,andriderforRalph
Lauren'
sPoloBrand.Green Giant（canned andfrozenvegetable products）andArm&
Hammer（bakingsoda）arebothbrandnamesandbrandmarks.
Atrademarkisabrandthathasbeenadoptedbyasellerandgivenlegalprotection.Atrademarkincludesnotjustthebrandmark,asmanypeoplebelieve,butalsothebrandname.TheLanhamActof1946permitsfirmstoregistertrademarkswiththefederalgovernmenttoprotectthemfromuseormisusebyothercompanies.TheTrademarkLawRevisionAct,whichtookeffectin1989,istendedtostrengthenthetheregistrationsystemtothebenefitofU.S.Firms.
Forsellers,brandscanbepromoted.Theyareeasilyrecognizedwhendisplayedinastoreorincludedinadvertising.Brandingreducespricecomparisons.Becausebrandsareanotherfactorthatneedstobeconsideredincomparingdifferentproducts,brandingreducesthelikelihoodofpurchasedecisionbasedsolelyonprice.Thereputationofabrandalsoinfluencescustomerloyaltyamongbuyersofservices as well as customer goods.Finally,branding can differentiatecommodities（Sunkistoranges,Mortonsalt,andDominosugar,forexample）.
Pricing
Pricingisadynamicprocess,Companiesdesignapricingstructurethatcoversalltheirproducts.Theychangethisstructureovertimeandadjustittoaccountfordifferentcustomersandsituations.
Pricingstrategiesusuallychangeasaproductpassesthroughitslifecycle.Marketersfaceimportantchoicewhentheyselectnewproductpricingstrategies.Thecompanycandecideononeofseveralprice-qualitystrategiesforintroducinganimitativeproduct.Inpricinginnovativeproducts,itcanpracticemarket-skimmingpricingbyinitiallysettinghighpricesto"
skim"
themaximumamountofrevenuefromvarioussegmentsofthemarket.Oritcanusemarketpenetrationpricingbysettingalowinitialpricetowinalargemarketshare.
Companiesapplyavarietyofprice-adjustmentstrategiestoaccountfordifferencesinconsumersegmentsandsituations.Oneisdiscountandallowancepricing,wherebythecompanydecidesonquantity,functional,orseasonaldiscounts,orvaryingtypesofallowances.Asecondstrategyissegmentedpricing,wherethecompanysellersaproductattwoormorepricestoallowfordifferencesincustomers,products,orlocations.Sometimescompaniesconsidermorethaneconomicsintheirpricingdecisions,andusepsychologicalpricingtocommunicateabouttheproduct'
s
qualityorvalue.Inpromotionalpricing,companiestemporarilyselltheirproductbellowlistpriceasaspecial-eventtodrawmorecustomers,sometimesevensellingbelowcost.Withvaluepricing,thecompanyoffersjustthenightcombinationofqualityandgoodserviceatafairprice.Anotherapproachisgeographicalpricing,wherebythecompanydecideshowtopricedistantcustomers,choosingfromalternativeasFOBpricing,uniformdeliveredpricing,zonepricing,basing-pointpricing,andfreight-absorptionpricing.Finally,internationalpricingmeansthatthe
companyadjustsitspricetomeetdifferentworldmarkets.
DistributionChannels
Mostproducersuseintermediariestobringtheirproductstomarket.Theytrytoforgeadistributionchannel—asetofinterdependentorganizationsinvolvedintheprocessofmarkingaproductorserviceavailableforuseorconsumptionbytheconsumersorbusinessuser.
Whydoproducersgivesomeofthesellingjobtointermediaries?
Afterall,doingsomeansgivingupsomecontroloverhowandtowhomtheproductsaresold.Theuseofintermediariesresultsfromtheirgreaterefficiencyinmarkinggoodsavailabletotargetmarkets.Throughtheircontacts,experience,specialization,andscalesofoperation,intermediariesusuallyofferthefirmmovevaluethanitcanachieveonitsownefforts.
Adistributionchannelmovesgoodsfromproducerstocustomers.Itovercomesthemajortime,place,andpossessiongapsthatseparategoodsandservicesfromthosewhowouldusethem.Membersofthemarketingchannelperformmanyfunctions.Somehelptocompletetransactions:
1.Information.2.Promotion.
3.Contact:
findingandcommunicatingwithprospectivebuyers.4.Matching:
fittingtheoffertothebuyer'
sneeds,includingsuchactivitiesas
manufacturingandpackaging.
5.Negotiation:
reachinganagreementonpriceandothertermsoftheoffersothatownershiporpossessioncanbetransferred.Otherhelptofulfillthecompletedtransferred.
1.Transportingandstoringgoods.2.Financing.
3.Risktaking:
assumingtheriskofcarryingoutthechannelwork.Thequestionisnotwhetherthesefunctionsneedtobeperformed,butratherwhoistoperformthem.Allthefunctionshavethreethingsincommon:
Theyuseupscarceresource,theyoftencanbeperformedbetterthroughspecialization,andtheycanbeshiftedamongchannelmembers.Totheextentthatthemanufacturerperformsthesefunctions,itscostsgoupanditspriceshavetobehigher.Atthesametime,whensomeofthesefunctionsareshiftedtointermediaries,theproducer'
scostsandpricesmaybelower,buttheintermediariesmustchargemoretocoverthecostsoftheirwork.Individingtheworkofthechannel,thevariousfunctionsshouldbeassignedtothechannelmemberswhocanperformthemmostefficientlyandeffectivelytoprovidesatisfactoryassortmentsofgoodstotargetconsumers.
Distributionchannelscanbedescribedbythenumberofchannellevelsinvolved.Eachlayerofmarketingintermediariesthatperformssomeworkinbriningtheproductandit
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