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Competencies and capabilities y Suggestion that C&C are related to the strategic positioning of the business or product y Distinctive competencies are described as a fundamental pattern of the present and planned resource deployments y Core competencies are sources of competitive advantage and are difficult to imitate (new product concepts, strategic alliances, development programs) y Distinctive capabilities such as market sensing, customer linking and channel bonding y C&C differentiate a firm from competitors, providing competitive advantage and a determination of the best means to achieve a match between an organization and the requirements of target segments. y Strategy determinations is a means of matching resources and skills, competencies to the changing environment y A strategic issue in positioning is the need to stay with ones own distinctive competencies. Competencies have to be maintained. Competence defines a frim ability to offer superior value y Since the environment changes dynamically, there is not such thing as sustaining leadership, therefore we have the need for constant adjustment of competencies, skills and capabilities y C&C are hard to replicate and defines together with preferences, behaviours and ideologies, who the organization is y Vision may be itself depended on managerial competence and capability y Distinctive competences is an element of an effective mission statement y Determinant of successful positioning has to do with the adjustment of C&C to be suitable to a new target market y The firms internal resource and skills, unique core strengths and competencies of an organization and the defensive use of the company capabilities against competitive characteristics of an industry are essential aspects of a positiong programme y A company needs to adopt new set of C&C but there has to be a match between preferences of the owner, history of the company and the marketing program.

y Competencies allow the company to adapt quickly to changing opportunities and provide competitive advantage. y A company can achieve its purpose if their C&C are matched with the external environment. y The model to the process of STP suggests that strategic positioning is dinstictive from operational positioning because it is sustained by the capabilities and competencies of a business rather than advertising and promotiong y Strategic positiong matches the organization and its C&C with the appropriate targets. Operational positiong created a value proposition and differentiates the product or service from competitiors offerings based on perception and image informed by profiles revealed through segmentation techniques. y These distinctive strengths, the unique C&C may include physical resources of the organization such as machinery and buildings, intellectual resources such as skills and knowledge and behavioural traits such as responsiveness, reliability and honesty. y Strategic positiong is an expression of who the companycy is and how it will behave to respond to the environments, y Operational positiong is an exercise in communication and a promotional tool that concentrates on perception and image. 2. Segmentation, targeting and positioning

The three major steps of segmentation, targeting and positioning are widely considered to be central to the decision and planning process of marketing with the purpose of identifying and selecting potential buyers and communicating distinctive product benefits in the market Segmentation

y Different products are generally purchased by different groups of people. Segmentation attempts to identify homogeneous demand function within a heterogeneous market demand function y These differences can be exploited to increase the productivity of the firms marketing program. y Segmentation is the process of grouping a market into groups of potential customers who are similar in selected ways and characteristics and who are likely to display similar purchase behaviour characteristics; their view for existing brands and products; positioning ranges of brands and of product varieties; and identifying gaps in the market which offer new market opportunities y The process of segmentation divides (potential) customers into distinctive groups for the purpose of targeting and designing segmentspecific marketing strategies to concentrate on narrow markets through segmentation and cut out a specific niche in the market thorough understanding of customer needs. This will form a differential strategy y Selected segments must form a sound basis for product, distribution, pricing, and communication strategy that can only be realized by stable segments of which buying behaviour can be reliably predicted y There are four key requirements for effective segmentation homogeneity within segments, heterogeneity between segments, target ability by means of the marketing mix, and viability in business-related terms (i.e resources, capabilities and competences and skills within the business) y There are three main purposes for market segmentation research: to learn how the brands or products in a class are perceived with respect to strengths, weaknesses, and similarities; to learn about consumers desires and how these are satisfied or unsatisfied by the current market; to integrate these findings strategically (i.e how it can be used to make a profound strategy), determining the greatest opportunities for new brands or products and how a product or its image should be modified to produce the greatest sales gain y Marketing research should be based on understanding of markets, potential customers, their needs and their awareness so that more is known about customers y Market segmentation studies can produce results that indicate desirable marketing action by repositioning closer to ideal points of sizeable segments of the market and further from other products with which it must compete, resulting in an increase of a products market share y The use of demographic (age, gender, family size, income levels, life cyle), geographic (nations, states, regions), psychographic (social class, personality, lifestyle) and behavioural (occasions, uses, responses,

buying ) segmentation techniques are some techniques but new and creative ways to define a market are needed Psychological segmentation is a way of entering into the mindset of different groups of consumers to see how the world looks from the inside looking out, providing marketing management with a better insight into why consumers behave as they do and providing a structure through an underlying model of personality. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that You cant be all things to all people, and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable. Bases for segmenting business markets: situational factors, purchasing approaches, operating characteristics, demographics and personal characteristics Segmentation seeks homogeneity whilst some managers make the mistake of using customer focus to mean they must serve all customer needs or respond to every request leading to a lack of focus on particular markets and therefore appropriate strategies. Segmentation is a way of dealing with widening heterogeneity in a diversifying market in order to match the needs of the customer to the abilities of the supplier.

Targeting y Advantages: 1. marketing opportunities and gaps may be more accurately identified and appraised 2. the product and the marketing mix can be finely tuned to the needs of the market 3. and effort can be focused on segments that offer greatest potential for the company to fulfil its objectives y All customers may be important, but some are more important to the company than others, and the most important strategic decision is to choose those important customers. Not all targets are equally attractive. y Czepiel (1992) draws attention to market size and says large markets seldom allow high rates of return, small markets offer the best opportunity, and markets in which the prospects for profits are inherently poor, even in the event of winning, will have little to show for the efforts. y Targeting buyer groups that respond similarly to your companys competitive strategy is the key to segmentation. y A customer orientation is the sufficient understanding of ones target buyers to be able to create superior value for them continuously. The question of where to compete when choosing a target segment seems to become merged with the question of how to compete y The route to success in target market selection is to focus the firms (limited) resources (time, effort, money) onto a relatively small group of customers whose needs the firm can meet most effectively Evaluation of market segments y Segment Size and Growth Analyze sales, growth rates and expected profitability. y Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. y Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages. y There are three market target strategic approaches: differentiated, undifferentiated and concentrated Positioning y The idea of marketing is satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it. The whole cluster of things includes the perceptions of the product or service as a means to satisfy the needs of the customer.

y Small, marginal differences that appeal to different market segments: describing differences in buyer attitudes, motivations, values, patterns of usage, aesthetic preferences, and degree of susceptibility as an alternative to demographic segmentation. y the need to create a position in the prospects mind . . . the name of your company or product is becoming more and more important . . . to secure a worthwhile position for a corporate name, you need a thought to go with it y positioning is the very objective of the advertising itself y Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect y A principal purpose of segmentation is to indicate how various segments perceive the product in order to indicate a way to create a unique marketing mix. The mix secures a particular position or impression in the mind of the target market of the product. Market position can be effected by the whole marketing mix thus underlining the importance of a positioning driven strategy in the construction of the marketing mix y An effective position can be defined as one that enables a brand or service to occupy a preferred and unique niche in a customers mind that is also consistent with the overall marketing strategy y Positioning becomes meaningful to a consumer only when it is perceived as providing a positive benefit or removing a problem: Positioning is generally referred to as a process of finding and establishing a distinct place in the market that is determined by the customers view of ones own offering in comparison to competing alternatives y All elements of a companys behaviour can affect its position in the minds of their customers and propose a triangular relationship between customers (their needs and aspirations), the company (the dominant values, specific skills and resources) and its competitors (their values, skills and resources) as a foundation for positioning y The essence of strategic positioning is to choose activities that are different from rivals. Unless positioning strategy is the choice and performance of alternative activities to rivals then a strategy is nothing more than a marketing slogan and will not withstand competition y Products Position - the place the product occupies in consumers minds relative to competing products; i.e. Volvo positions on safety. y A product brand must be positioned so that differentiation is meaningful in consumers minds y Meaningful so that: offer distict benefit, which is important to costumer, be superior to other brands, imitable and be reinforced be distinct brand image y Positioning via-product attributes, usage occations and market segment

Positioning strategy y Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation. y Step 2. Selecting the right competitive advantage. y Step 3. Effectively communicating and delivering the chosen position to the market. y A strategic plan of action may include: (1) positioning the company so that its capabilities provide the best defence against the competitive force; and/or, (2) influencing the balance of the forces through strategic moves, thus improving the companys position; and/or, (3) anticipating shifts in the factors underlying the forces and responding to them, with the hope of exploiting change by choosing a strategy appropriate for the new competitive balance before opponents recognize it y involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers.

Nike strategy y Utilizing marketing strategy cantering around brand image which is attained by distinctive logo and advertising logo: Just do it y Sponsorship agreements with professional teams , athlete etc to promote its products y Position in such a way as to try to appeal to youthful segment y Develop innovative products, and products at specific needs eg walking y Quality, style, reliability (strong brand) y Position brand by promoting a personality Levis y y y y y y Jeans for men, women, teen and children Track taste and need of target markets Confident through companys intelligent marketing schemes Creating new innovative products relevant to target consumers Superior quality Target specific consumers segments and provide product differentiations for their customers in their selected distribution channels y Positioning differs from country to country eg Russia-prestige and expensive, Uk- casual and expensive

Heinz y Invest in marketing and innovation to sustain the growth of their leading brands y Quality, taste, nutrition to people eating at work, restaurant, office etc y World class portfolio of powerful brands y Sustainable health Differentiation: eg Personal differentiation (singaure airlines) channel (online order) and image (louivitton)

Core of existence The culture of an organization is largely driven by the founders beliefs, the personal preferences of the owner or the senior managers, and the history of the company. The importance of this factor as a determinant of strategy is highlighted by the use of the term coined for this driving aspect as the core of existence. This is likely to result in the personality of the organization expressing itself through certain behaviours, habits and responses to the market, customers and competitors. Judgements, the choice of value disciplines, leadership and management, as well as entrepreneurial flair will all be directed by these factors. These lead to manifestations of personality such as capabilities and competencies that will contribute to competitive advantage that is largely inimitable because of the particularity of these aspects. Even the methods of segmentation, not to mention the selection of target segment, will be influenced and overall the strategic position of a company as directed by its personality will override all other influences. Strategic positioning is the expression of an organizations personality on its position in the market place. The recognition that strategic positioning is an attribute of the organizations personality has a number of far-reaching consequences for marketing management. The involvement of marketers in all aspects of the business organization is often reinforced by such phrases as marketing is everything and everything is marketing (for example, McKenna, 1991). The recognition of strategic positioning suggests the need for a greater depth of understanding and involvement of marketers to the whole business rather than the isolated role of selling or promoting so often characterized by the words of many chief executives to marketing managers: Its up to you to market the product.

There is wider recognition of the importance of what this book has described as the core of existence to the determination of strategy and in particular the way that a company and its products or services are perceived by the customer. If marketing is not simply a function of a company but the guiding philosophy (Hooley, Cox and Adams, 1992), then it is likely that the integrated nature of such an approach will be driven by the history and preferences of the business. The following observations seem relevant to marketing management as a result of the findings of this study: 1. There is a need regularly to define the personality of the business as part of the marketing audit. 2. The personality of the business cannot be described as strength or weakness unless it is contrasted with the needs of the market and profiles of target markets. 3. Strategic positioning is the link between organizational needs and market needs. 4. The personality of the business has to take account of the needs of the chosen target segments and this might require major shifts in the personality and culture of the company including changes in senior management, organizational structure, and expression of vision. 5. Strategic positioning cannot be undertaken in isolation from the whole business. 6. Strategic positioning can act as a catalyst for change and places marketing management in an authoritative yet vulnerable position. In addition to these areas of future research, there are major implications for the activity of marketing and the role of marketing management that might be considered. These include some of the following issues: 1. The effective role of senior managers in the success of a company. 2. The role of managers in determining the personality of the company. 3. The implications of long-serving senior managers in a company. 4. The role of marketing and marketing managers in strategic management The expression of vision and mission of an organization (who we are and what we are doing) Further reflection into the role of the marketing manager as a practitioner