summary bab 11

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 )