Selecting a Market and Establishing a Position in the Market
·
Important Questions That All Startups Must Ask
o In order to
succeed, a new firm must address this important issue: Who are our customers
are how will we appeal to them?
o A
well-managed start-up approaches this query by following a three-step process:
§ Segmenting
the market.
§ Selecting a
target market.
§ Establishing
a unique position in the target market
The Process of Selecting a Target Market and Positioning Strategy
·
Segmentating the market
·
Selecting target market
·
Crafting a unique positioning strategy
·
Involves studying a firm’s industry and determining
the different target markets in that industry.
Segmenting the Market
·
Markets can be
segmented in a number of different ways, including
o Product
type
o Price point
o Customers
served
Selecting a Target Market
• Once a firm
has segmented the market, a target market must be chosen.
• The market
must be sufficiently attractive and the firm must have the capability to serve
it
• The Netbook segment of the computer industry
is new, and is being targeted by startups
Establishing a Unique Position
• After
selecting a target market, the firm’s next step is to establish a “position” within the market that
differentiates it from its rivals.
• A “position” is the part of a market that the
firm is claiming as its own.
• A firm establishing a unique position in its
customers’ minds by drawing attention to two or
three of the product’s attributes.
positioning
o Firms often develop a “tagline” to reinforce
the position they have staked out in their market, or a phrase that is used
consistently in a company’s literature and thus becomes associated with the
company.
o An example
is Nike’s familiar tagline, “Just do it.”
§ The beauty
of this simple three-word expression is that it applies equally to a
21-year-old triathlete and a 65-year-old mall walker.
·
Selling
Benefits Rather Than Features
o Many
entrepreneur make the mistake of positioning their company’s products or
services on features rather than benefits.
o A
positioning or marketing strategy that focuses on the features of a product,
such as its technical merits, is usually much less effective than a campaign
focusing on what the merits of the product can do.
o Consider
the example of the following slide.
Establishing a Brand
·
Establishing
a Brand
o A brand is
the set of attributes—positive or negative—that people associated with a
company.
§ These
attributes can be positive, such as trustworthy, dependable, or easy to deal
with.
§ Or they can
be negative, such as cheap, unreliable, or difficult to deal with.
o The
customer loyalty a company creates through its brand is one of its most
valuable assets.
·
Brand
Management
o Some
companies monitor the integrity of their brands through a program called “brand
management.”
·
Establishing
a Brand
o So how does
a firm establish a brand?
§ On a
philosophical level, a firm must have meaning in its customer’s lives. It must create value—something for which
customers are willing to pay.
§ On a more
practical level, brands are built through a number of techniques, including
advertising, public relations, sponsorships, support of social causes, and good
performance.
§ A firm’s
name, logo, Web site design, and even its letterhead are part of its
brand.
·
Power of a Strong Brand
o Ultimately,
a strong brand can be a very powerful asset for a firm.
·
Cobranding
o A technique
that companies use to strengthen their brands is to enter into a cobranding
arrangements with other firms.
o Cobranding
refers to a relationship between two or more firms where the firm’s brands
promote each another.
THE FOUR PS OF MARKETING FOR NEW VENTURES
• Product
• Price
• Promotion
• place
( distribution )
