One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go?

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1 One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don t know, Alice answered. Then, said the cat, it doesn t matter. Lewis Carroll

2 The Marketing Strategy Process Analyze the Marketing Environment (especially the consumer-product relationship) Where are we now? Develop Segmentation and Product Positioning Strategies Where do we want to go? Design Marketing Mix How are we going to get there?

3 Analyzing the Marketing Environment- Were are we now? Macro/External factors-demographic environment, political environment, cultural environment, etc. Internal Factors-suppliers, intermediaries, COMPETITORS, CONSUMERS/CONSUMER- PRODUCT RELATIONSHIP

4 Segmentation Strategy-STPD Where Do We Want to Go? Segmentation is the process of dividing a market into groups of similar consumers, using variables such as gender, age, social class, etc. Targeting involves selecting the most appropriate group(s) and individuals for the firm to serve. The firm can then focus on the groups and individuals in these smaller target segments. Smaller market segments: Have similar consumer-product relationships (e.g., common needs) Will respond similarly to marketing actions

5 Positioning Strategy-- Where Do Product Positioning We Want to Go? Creating an image of a brand, relative to that of competing brands, in consumers minds. Differentiation The image created must distinguish itself from competing brands in a manner that resonates with the target segment. Perceptual/Positioning Maps

6

7 The Marketing Mix How Are We Going to Get There? Four Ps are orchestrated in a way that creates the desired product positioning that resonates with the targeted segment(s) Product Price Promotion (Communication) Place (Distribution)

8 Case Example: Casella Wines and The American Wine Market (Adapted from Blue Ocean Strategy)

9 Where Was Casella Wines (circa Competition 1990) Tremendous competition among both foreign and domestic wine producers over 1600 producers. Many large players at both ends of the spectrum-premium wines and jug wines.

10 Typical Upscale Competitor

11 Typical Downscale Competitor

12 Where was Casella Wines (cont d)? Consumer-Product Relationship Stagnant projections for wine consumption in the U.S. Important consumer insight-the mass of Americans saw wine as a turnoff intimidating, pretentious, too complex and foreign in taste.

13 Where Did Casella Wines Decide to Go? Casella segmented market using the variable of user status-wine-drinkers vs. non-winedrinkers (cocktail and beer drinkers) Casella decided to target cocktail and beer drinkers given stagnant growth among current wine drinkers

14 Where Did Casella Wines Decide to Go (cont d)? Casella positioned a new brand of wine that would be perceived as accessible, bold, and laid-back. Casella differentiated the new brand from down-scale jug wines that were socially taboo through exotic cultural chic and from upscale wines by making it easy to select, easy to drink, and emphasizing fun and adventure

15 The New Brand

16 How Did Casella Wines Get There? Product shorter aging for less complex taste, limited to most popular varieties (Shiraz and Chardonnay), simple yet interesting and exotic naming and labeling, leveraging the image of Australia and its culture. Price $6.99 twice more than jug wines, but slightly below exiting sophisticated brands Communications The go-to wine little advertising to end consumer; focus on retail shop employees, providing them with Australian outback clothing such as bushman s hats and oilskin jackets Distribution Intensive, including Costco

17 Results 112,000 cases of wine in million cases in 2005 Credited with revolutionizing the wine industry

18 For Next Class Work with your team to find an example of a marketing strategy that was particularly effective or noteworthy. Prepare a five-minute presentation that illustrates the marketing campaign, following the format from this lesson ( Where are We Now? Etc.)

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