Marketing Strategy

Market Segmentation

Market segmentation is the process of dividing a market into smaller groups based on shared characteristics to target them more effectively. Some examples include:

• Geographic Segmentation: This divides the market by geographical areas, such as regions or cities. For example, country radio stations focus on local news, becoming popular in their regions by meeting local needs.
• Demographic Segmentation: This divides the market based on demographic characteristics like age, gender, or income. An example is "NIVEA for Men" products targeting male consumers.

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Advantages of Market Segmentation:

• Increased Sales: By tailoring products and marketing strategies to meet the specific needs and preferences of different segments, businesses can enhance customer satisfaction and loyalty, leading to higher sales.
• Market Establishment: Focusing on specific market segments allows businesses to become more entrenched and well-known within those segments, building a strong brand presence and competitive advantage.
• Lower Marketing Costs: Targeted marketing efforts are more efficient, as they focus on the most relevant audiences, reducing wasted resources and expenses on reaching uninterested consumers.

Marketing Plan

A marketing plan outlines the strategies and activities a business will use to achieve its marketing objectives. It aligns marketing efforts with business goals, such as increasing sales or entering new markets.

• Example: Coca-Cola developed no-sugar drinks like Coke Zero to address declining sales of sugary beverages.

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Steps in a marketing plan:

• Investigate the Market: Conduct a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Find gaps in the market where the business can profitably position its offerings.
• Select a Target Market: Divide the market into segments and choose one or more segments to focus on. This helps tailor marketing efforts to the specific needs of selected groups.
• Research the Target Market: Understand what the target market wants and needs through market research. This insight helps in creating products and messages that resonate with consumers.
• Develop a Marketing Mix: Formulate strategies for the product, price, place, and promotion. Ensure the product meets customer needs, is priced appropriately, is available where customers shop, and is promoted effectively to the target audience.

The Product Life Cycle

The product life cycle is a concept that describes the stages a product goes through from its introduction to the market until its withdrawal.

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Stages of the Product Life Cycle:

• Introduction: The product is launched into the market. At this stage, there is a high cost of promotion to build awareness, and there is little competition. Sales are typically low, and the product does not generate profit.
• Growth: Sales of the product grow rapidly as it gains market acceptance. The product proves successful with initial customers, and competitors begin to enter the market, increasing competition.
• Maturity: The growth rate of sales slows, but sales continue to rise, reaching their peak. The product generates the highest level of profit during this stage. The market becomes saturated with competitors, leading to intensified competition.
• Saturation: Sales stabilize and remain at their peak for some time but do not grow further. Most potential customers have already purchased the product, and the market is filled with similar offerings, making it challenging to increase market share.
• Decline: Sales of the product fall off permanently as consumer preferences change or the product becomes obsolete. At this stage, profits decline, and the product may eventually be withdrawn from the market. Companies may decide to discontinue the product or find ways to innovate or rebrand it.

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Ways to extend the Product Life Cycle using the marketing mix:

• Product: Introduce new and improved versions of the product with added features or benefits to renew customer interest. For example, car manufacturers might add power steering or leather seats to keep models attractive.
• Price: Lower the price during the saturation stage to appeal to budget-conscious consumers who haven't yet purchased the product. For instance, older iPhone models often see price reductions when new models are released.
• Promotion: Change promotional strategies to target different audiences or highlight new uses for the product. An example is Lucozade, which was rebranded from a drink for sick people to a sports beverage.
• Place: Distribute the product in new ways or channels to reach broader markets. For example, movies are sold online after theater releases to extend their sales life beyond DVD or Blu-ray formats.