Post #4: Market Segmentation and Product Positioning

Welcome back!

Once you’re company has established its business plan, it has a product, and understands consumer behavior, it is time to develop a marketing strategy. This first requires the company to define its market segment through market segmentation, which involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Today, we will focus on this important aspect of marketing, in addition to a few complementary marketing terms.

Let us begin with an example. Ford Motor Company has developed a fun and contemporary style of television advertisement incorporating flashy colors, appropriate music, and exciting text that captions the narrator’s voice as he relays Ford’s message to consumers. The consumers which they seek to attract to their product are primarily hardworking men, in need of a TOUGH, HEAVY-DUTY, HIGH-HORSEPOWER truck that will perform better than any other truck on the road, regardless of the conditions in which the driver chooses to use the vehicle; not to mention, the added benefit of its EcoBoost engine which allows for superior fuel efficiency and reduced greenhouse emissions. Despite the effectiveness of this recent ad, the Ford F-150 has existed in consumers’ minds as the leading pick-up truck on the market due to Ford’s solid reputation which it has acquired over 66 years of F-150 production. Therefore, the Ford Motor Company has successfully used product positioning, the place a product occupies in consumers’ minds as important attributes relative to competitive products, to define their brand as superior to their market segment. See the aforementioned ad below at the following link:

                             http://www.ispot.tv/ad/75Yw/ford-f-150-research-project

Companies can also engage in a practice known as product re-positioning, changing the place a product occupies in a consumer’s mind relative to competitive products. A company may do this to readapt to their market segment if their sales are suffering, or if they hope to infringe on their competitors sales. Burger King is a recent example of a company which has attempted to re-position their food service with the introduction of the Big King, a two-tier burger sandwich. They used this tactic to re-establish their burger in the consumers mind to increase sales; in this case, so much so that their product looked identical to their competitor’s.

Here’s how they describe it on their website:

“Our BIG KING™ Sandwich features two savory fire-grilled beef patties, topped with, melted American cheese, fresh cut iceberg lettuce, crisp onions, crunchy pickles, and featuring a sweet thousand iland style dressing, all on a warm, toasted, sesame seed bun.”

If you’re familiar with McDonald’s Big Mac jingle, you probably realized the two sandwiches are nearly identical. Take a look for yourself at the resemblance:

And here is the Big King ad that I remember watching, jaw-dropped and in awe of BK’s brazen move:

Sadly for Burger King, their attempt to penetrate the market with a new product that they hoped would impede on McDonald’s Big Mac sales did not prove as successful as they hoped. While their initial 2 for $5 dollar deal brought in many customers, but for the most part, the brand loyal Mickey D’ers remained under the Golden Arches alongside their delicious Big Mac.

One final concept to end this blog posting with is product differentiation, a marketing strategy that involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products. Due to our materialistic society and the vast array of products saturating the market, companies competing for the consumers of similar segments must market their products as outstanding, innovative, and unique in order to capture and convince them of the value and worth of their product. The electronics industry proves a highly competitive market, especially today’s cellphone market. The below ad exemplifies both the competitiveness of this market, as well as Samsung’s effort to differentiate their product from Apple’s:

Samsung has spent the past several years not only positioning themselves in the cellphone/tablet/phablet industry as offering a respectable, reliable, and innovative product, but also assured the consumer that their products are both different and superior. Once a company chooses the segment it wishes to target, markets its product successfully so as to position it in the consumers mind, and makes sure to differentiate their product with a uniqueness that captures their audience, the company has laid themselves a solid foundation for a successful future. Thank you for reading this post. I hope to have enlightened you about the ways of marketing today, so as to encourage you to use these techniques when marketing your own personal or business brand.

Until next time!

-Adam