This week, my team and I have been busy giving final shape to the first section of our marketing plan on Alternative Fuel Vehicles. As part of this exercise, I have been able to increase my awareness about hybrid and electric vehicles. I have enjoyed learning about the marketing planning process. I can say I understand the first two steps of marketing planning,J, namely,
1. Research and analyze the current situation, and,
2. Understand markets and customers.
As for the Alternative Fuel Vehicle industry, it has potential to grow but has its share bit of challenges as well. If you would like to learn more on this topic, you are welcome to refer to our team’s marketing plan,J, in near future.
Other deliverables for this week,
1. Read Chapter 4 Done
2. Read the 2 HBR articles I have read the articles as of today but that’s about it.
Our team plans to gain momentum on this
assignment, after we wrap up our marketing plan.
3. View ‘My Camtasia Video’ Done. I like the term USP, Unique Selling Position.
4. Answer qs on blog site In process of doing that now.
1. How does segmentation facilitate consumer obsession?
I want to fulfill the needs of my customer base to the best I can. But the needs of my customers are not all alike, how can I do that? The process of fulfilling specific needs of specific customers is called Segmentation. I liked the segmentation definition and explanations in the second HBR article for this week. “Market Segmentation consists of dividing the market into groups of (potential) customers – called market segments – with distinct characteristics, behaviors, or needs. The aim is to cluster customers in groups that clearly differ from one another but show a great deal of homogeneity within the group. It is important that the segments are sufficiently different from one another.”
Given that this week-end is March Madness’s culmination (College basketball for those who do not follow sports in states), I am sharing an article I stumbled upon recently. It has an interesting view on segmentation. As fyi, the article is not very insightful to use for winning brackets :).
On a side note, my team (Michigan) did not make it past sweet 16, so I am left with either supporting my husband’s team (Buckeyes) that’s in the final four or having no loyalty towards any team. A hard choice still toying the idea which way to goJ!
2. When a firm chooses a particular segment for targeting what are its primary considerations?
A firm needs to get a good understanding of its available resources and prime competencies when deciding which segments to target. Four key factors are used while evaluating segments for targeting,
a. Market factors: Size, growth rate, life-cycle stage, predictability, price elasticity, bargaining power of buyers, cyclicality of demand.
b. Economic and technological factors: Barriers to entry and exit, bargaining power of suppliers, technology utilization, investment required and margins.
c. Competitive factors: Intensity, quality, threat of substitution, degree of differentiation.
d. Business environment factors: Economic fluctuations, political and legal, regulation, social, physical environment.
Different firms employ different methods of targeting, concentrated, undifferentiated or differentiated marketing.
3. What is positioning? Where does a firm's position reside.
A firm buckets customers in similar groups (segments) and decides to target specific segments, then what does the firm do? How does the firm separate its product from the rest or another way put how does the firm create brand advantage? Positioning is the effort to differentiate a product by a specific attribute that the customer finds value in. A firm’s position resides in its customer’s eyes. The environment is constantly changing, with new players entering and/or exiting the marketplace. For a firm to remain competitive, it requires to always have a differentiating factor or a competitive edge over its rivals.
- Think about a couple of companies competing in the same space with different segment focuses. Discuss these firms and their various approaches. Why are they different?
I decided to look at two companies in the food industry, namely, Whole Foods and Trade Joe’s. I have enjoyed shopping at both these stores. I admire the founders of their ability to identify a unique space to operate in. I have highlighted the key difference I find in the two companies in color blue. One charges high cost for high quality product, while the other advertises high-quality at low or rather not as high a cost.
Whole Foods: Whole Foods goal is to ‘sell highest quality natural and organic products available’. The company justifies its high cost by way of its delivery of the highest quality product in the most customer friendly manner. It focuses on the quality aspect of its products all the way down its supply chain reaching its supplier base, as it has used quality as one of the mantras’ to separate itself from the others in its space.
It is Whole Foods attention to detail that sets it apart from its competition. Be it the colorful display of products (fruits and vegetables) at the entrance to the way employees greet customers to the way cashier provides special attention to each billing customer at the counter, Whole Foods has mastered the art of customer attention. The company has a powerful mission statement, ‘Whole Foods – Whole People – Whole Planet’ that hits a chord with many loyal customers.
Trader Joe: A lot is not known about Trader Joe’s marketing plans, as the company and its parent ‘Aldi’ have been successful in keeping its strategies hidden. What is known is the Trader Joe’s goal, which is to focus on high-quality gourmet food at low cost in a fun environment. This simple yet powerful mantra that the grocery chain lives each day has helped to create a niche space that many rivals of Trader Joe’s envy. One may wonder how is Trader Joe’s able to get a high-quality product at a lower price when many of its competitors struggle to do just that. Trade Joe’s relationship with its suppliers is probably one of its key competitive advantages. Not a lot is known about the relationship, but what is known is the company works hard to keep its suppliers happy.
In the first image below on the left in the deli section, title requires attention, 'Baked Fresh Daily At Prices too low to pass up'.
Simple yet unique ideas have separated these two companies to allow them to target different customer bases.
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