Market positioning 23 August, 2006Posted by varoom in Marketing Plans.
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In order to position a product in the market you need to be able to assess, define and segment the market. This allows you to see if there any gaps in the market that you can try and fill. One good example of this was done by Virgin Atlantic and its Premium economy/Upper class positioning against British Airways. Some years ago there were 3 clear classes of Seat on a Transatlantic flight. Economy, Business Class and First Class. What Virgin noticed was a need for a bigger seat but with no additional frills on these flights. So it introduced Premium Economy and priced it in between Economy and BA Business Class. This attracted Economy flyers who were willing to pay a little more for a bigger seat. It also stole business from BA Business Class by offering a higher class service similar to first Class for Business Class prices.
There are many examples of this market segmentation and product positioning.
You should look at customer behaviour. If you introduce a product in a segment that you have found in the market where will the customers come from? Will they be new customers to the market or are they drawn from existing segments alongside your new product. Why will they switch? What does it cost them, or save them, to switch, is this cost significant against the benefit. Assuming some amount of switching and some new customers will help you define the price positioning of your product.
Challenging the marketing plan. 10 August, 2006Posted by varoom in Marketing Plans.
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Before we can review a marketing plan we need to understand what it’s for. What is marketing and how do we do it? There are some traditional definitions such as;
“Marketing is the assessment of customer need, definition of a product that uses the competences of the company to develop a product that attracts customers and satisfies their needs in such a way as the company can make a profit.”
Or more simply, Marketing is finding profitable products for the company to develop and then promoting them to the market.
What is a marketing plan for?
Simply put, to define ways to bring customers and your product together. The marketing plan should define the business goals and define a clear vision of which direction to take the product. The plan then describes what will be done and how the product is promoted.
Important components in the plan should cover what the product features are, what it will sell for, where it will sell and how it will be promoted to the customers. This is usually called the Marketing Mix or the 4Ps.
Develop a PRODUCT
At the right PRICE
Deliver to the right PLACE
With the right kind of PROMOTION
When the plan is reviewed I would look for the following points to be covered.
On what basis was the product defined, what is the customer need, and how does the product satisfy that need? Validating the customer need is critical we must test these needs, look at existing products in the market and see how successful they are. Some initial test marketing or customer trials will provide some good data on the validity of the product claims.
How is the pricing strategy determined, how are the features of the product valued by the customer and what competitors exist? The competitive strategy needs to be covered too, how does the product differentiate against the competition, in what ways does the product beat the competition? The market need that helped define the product should also help us define the marketplace for the product and how we will promote it. It’s important that we define how the product will reach the customer and through which channels.