The essence of strategic marketing

The essence of st commitgic tradeingThis subject designed to provide realistic recommendations on segmenting markets, yet whentocksing specific customers, and positioning effectively SGNs return in china market.Having addressed the purpose of STP, it has ascertained that SGNs competitive advantages and potential competitors, the sectionalisation and targeting markets decisions for SGN thus proposed to employ geodemographic variables as segmentation bases. The two segment profilers of SGN were formed after exercised depict variables. Profiler 1 is a company of senior citizens of age 60 and above and profiler 2 is a group of middle age citizens from 40 to 60 years old work professionals. Upon evaluation of market attractiveness of these two distinct segments, it is informed that SGN targets both segments, adopting c at one timent estimated merchandising strategy, via single marketing mix.Positioning strategy adopted by SGN is more for less value proposition and positioni ng recital as To senior citizens, SGN absenters the lowest personalized olden armed service at their cornerstone(a).Read this report for SGN practical marketing tool to easily deal with the challenges and performance market opportunities that drive incremental revenue and increased profitability. The whole point of this proposal is to assist with better segmenting, targeting, positioning and decision making, be sure that localise on the most appropriate strategies that provide the most opportunity, least risk, and highest performance for SGN.TABLE OF CONTENTSIntroduction 5Background of the Company and the Service chosen 6Literature Review of the Segmentation, Targeting and PositioningConcept research this theoretical underpinnings of this designand critique . 7 hindquarters for Proposed Segmentation and Targeting for SGNs Service 16 bum for Proposed Positioning for SGNs service . 21 one-year Schedule for the Programme including marketing Budget/Expenditure .... 24Co nclusion . 25References .. 261. IntroductionThis report aims to develop and propose the Segmentation, Targeting and Positioning strategies for the personalized elderly home-c atomic number 18 service in China, offered by Sunrise Greyc atomic number 18 Network Co. Ltd (SGN). Chapter 2 briefly describes the SGN credentials and up to 24-hour service that is provided for the senior citizens in China.Segmentation, targeting and positioning concepts from various books are critically assessed and discussed in Chapter 3.Chapter 4 contains valuable information of the basis of proposed segmentation and targeting for SGNs service and Chapter 5 discusses on the positioning map, competitive advantages and value proposition of SGNs service.Chapter 6 tabulates the annual schedule of the programme that includes marketing budget/expenses and the final conclusion result be do in Chapter 7.2. Background of the Company and the Service ChosenCompany ProfileSunrice Graycare Network Co.,Ltd (SGN) is sp ecializing in offering home-establisheldercare service up to 24-hour to families in China. SGN grows its first step in Beijing to offer a ridiculous proposition to senior citizens. The whole team is dedicated to improving the quality lives of the elderly.SGN helps with e rattling facet of day-to-day living, from escorting on appointments and companionship, to house retention and personalized healthy screening to the seniors. Above all, elderly are always enjoying a safely and comfortably at each home with SGN care, instead of staying at nursing house.Mission StatementVision To make SGN the top of mind company for senior careMission Leverage our unique strengths to render reliable service and carethat exceed invitees expectation.Credo Work with passion, freight and professionalism3. Literature Review of the Segmentation, Targeting and Positioning Concept research this theoretical underpinnings of this concept and critique3.1 Introduction of Segmentation, Targeting and Positioni ng (STP)Market segmentation, targeting and positioning are the iii steps, as shown in below finger 3.1, that top management has to decide in the first place the implementation of any marketing plan in a company.Figure 3.1 Steps in Market Segmentation, Targeting and PositioningMarket segmentationIdentify bases for segmenting the marketDevelop segment profilesMarket targetingDevelop measures of market attractivenessSelect target segmentsMarket positioningDevelop positioning for target segmentsDevelop a marketing mix for each segmentSource Armstrong, Kotler Da Silva (2006, p.213)These steps are defined by Armstrong, Kotler Da Silva (2006) as followsMarket segmentationDividing a market into distinct groups with distinct needs, characteristics, or behaviours who might select separate overlaps or marketing mixes.Market TargetingThe process of evaluating each market segments attractiveness and selecting iodine or more segments to enter.Market positioningArranging for a product to o ccupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers.3.2 Market segmentationMarket segmentation is the act of dividing a market into distinct groups of buyers with antithetic needs, characteristics, or behaviors who might require separate products or marketing mixes (Armstrong, Kotler Da Silva 2006).Market segmentation is pre-requisite to access the right market and muckle at a maximum. It drives markets growth and increases sales to the craft profitability from occasions viewpoint.The effectiveness of segmentation should be measurable, accessible, substantial, divergentiable and actionable (Smith 2003).Segmentation helps to see the target customers more effectively. The customers pull in different requirement and needs and influenced by different media. A segment is a unique group of customers who sell some common characteristics that make them different from other groups of customers (Smith 2003). Some segments hav e different needs, require different versions of the same product, pay different prices, buy in different places, can be reached by different media (Smith 2003).Consumer markets can be segmented by many different variables which include geographic, demographics or social statistics, geodemographics, psychographics and behavioralistics. Smith (2003) explains these volt categories as below(1) Geographic categorized by location which includes streets, towns, cities, regions, countries, continents, and climate, universe parsimony and so on.(2) Demographics (social statistics) segmented by age, gender, marital status, life cycle, social class, education, job type, social class, income level, because ofconsumers needs and wants change with above-mentioned elements.(3) Geodemographics this mixes geographic and demographic data to give categories of house-type with locations.(4) Psychographics segment market based on peoples lifestyle, personality, attitudes in accordance of their psycho logical feature. Lifestyle is often segmented by marketer among others factors.(5) Behavioralistics bahavioral segmentation reflects the benefits consumer enjoyed and the consumption rate of products or go. Different consumer seeks benefits differently from own perspective. The consumers are divided by light, medium and heavy level as per individuals frequency of usage.The other type of segmentation, accord to Smith (2003) is industrial, organizational or production line-to- business markets. The organizational markets are segmented by personal characteristics of organizational customers and the benefits sought. The most common profilers for organizational markets are sorted as followsType of organizationSize of organization (heavy or light user)Geographical locationCorporate cultureOperating characteristicsJob titlebuying approachesApart from above profiles, it is felt that marketer also needs to find out who is the end user of organization so as to better render the direct cus tomers wants and needs. How the customers would use the product or service, the answer helps improve or innovate the product or service to satisfy customers needs. Identify the usage rate which affects sales volume and sales forecast. Lastly, who is the purchasing person and the relationship with purchasing organization is very pertinent to the markets segmentation, because the product or service can be segmented precisely to the buyers once corporate strategies and demands are well perceived.Researchers from McKinsey and others institutes have studied commodity markets, it showed that even customers in commodity market are assort by three segments. Customers concerned about cost more than quality who are Price-sensitive buyers. Whereas, people go for quality excellence and deliverables-focused fall into service segment. The commitment customers are close to total value, thereby winning a long-term relationship (Doyle 2002).While E-commerce is impacting the lives and lifestyle of p eople, many people prefer to research the associate products and rely on the internet as guidance before purchase. In the Reverse Segmentation pinpointed by Kotler, Jain and Maesinecee (2002), customers inform companies of their likes, dislikes and other key messages by answering online questionnaire. The information can be used by the company to construct customer segments. The company can then develop appropriate offerings for the different segments. sellers can respond to reverse marketing by paying attention to the customers four Cs enhanced customer value, lower costs, improved convenience, and better intercourse (Kotler, Jain Maesincee 2002). They need to explore the customers cognitive space, assess the companys competency space, and capture the collaborators resource space (Kotler, Jain Maesincee 2002).Although segment variables vary with different products or services, the author feels that demographics is the most easiest and fastest way to segment the markets which ca n be measurable and differentiable in marketplace. The strengths are these information of demographics are quite steadfast comparison with others categories, people can change their location, lifestyle tho most of people cannot change age and gender. The data can be attained from local politics and other professional organizations without or less costs.3.3. Market TargetingTarget marketing evaluates each market segments attractiveness and selects one or more segments to march (Armstrong, Kotler Da Silva 2006).To target the best market segments, the company should analyze each segments size and growth (product life cycle), profitability and competition, structural attractiveness and compatibilities with company objectives and resources (Armstrong, Kotler Da Silva 2006).Chaston (1999) also mentions that the identified segment must be of an adequate size, the higher costs of servicing customers needs can be recovered finished charging higher prices, the segment is accessible to the supplier and the selected marketing position is resistant to the subsequent entry of competitors.According to Armstrong, Kotler Da Silva (2006) and Doyle (2002), selecting the best target segments look at below strategies which depend on company resources and product itselfUndifferentiated marketing offers a product for mass market, requires mass production, mass distribution and mass publicity for the same product to all consumers without differences among segments.Differentiated marketing develops different market offers for two or more segments.Concentrated marketing niche market focuses on notwithstanding one or a few market segments. It is especially favored by companies with limited resources.Micromarketing it includes local marketing and individual marketing. Products or services are tailor-made in pursuit of unique needs from specific individuals and locations.Above are concepts of common target marketing strategies and marketers often adapt to one of them to market t heir products/services.The author favours concentrated marketing because it provides a strong foundation to build up reputation and gain a corking market share effectively. This marketing strategy also helps small company to reduce costs and maintain high prices. However, there is a risk involved as once the segment grows rapidly, it leave alone likely attract larger competitors.Market PositioningPositioning is all about how a product or service is positioned or perceived in the minds of a target group of customers. It answers the question Why will someone in the target market(s) buy my product or service instead of the competitors? (Lodish, Morgan Kallianpu 2001).American academics Aaker and Shansby categorized all the variables into six groups as follows (Smith 2003)Attribute, eg gentleness, ruggedness, tastefulPrice and quality, eg premium-quality image or value-basedUse or application, eg associations with a particular military position or occasion for useUser, eg linking th e product or service to types of users, lifestyles, profilesProduct class, eg positioning in diet foods or in normal foodsCompetitors, eg positioning against a competitor and competitive advertisingPerceptual maps help to devise positionings and repositionings. Product positioning maps are drawn with their axes dividing the plot into four quadrants. This is because most of the parameters upon which they are based typically range from high to low and the two attributes usually considered are quality and price. However, it is felt that real-life product positioning maps will be more tangled as there involves a number of dimensions, apart from the two attributes being considered.A products position is a complex set of perceptions, impressions and feeling that consumers have for the product compared with competing products. A product or service must differentiate its offer by building a unique bundle of benefits that appeals to a substantial group at bottom the segment. Beyond the pro duct differentiation, companies also can be differentiated by hiring better people which overtake other competitors. Generally, there are five winning value propositions to brand the products positionings more for more, more for the same, the same for less, less for much less, or more for less (Armstrong, Kotler Da Silva 2006).Doyle (2002) adds that companies must pronounce the 4 criteria so as to structure the differential advantages properly among customers. Successful marketer will always design the products or services that are unique, sustainable, productive and offering benefits to customers.Overall, the author feels positioning is an outcome of differentiation strategy, the outcome of positioning ultimately is to create and anchor a market value proposition into the minds of targeted customers within segmented territory. It is proved that products unique proposition is associated with strong marketing communications and planning, in which deliver the deliberate position an d convey the key message to target customers along a continuum. The distinctive benefit, chosen position and brand awareness take a long time to plot and map out done consistent market effort.Although customers hardly change the original product perception in mind, but marketers often choose to repositioning the product when the target markets changes.4. Basis for Proposed Segmentation and Targeting for the Service ChosenArmstrong, Kotler Da Silva (2006) have a checklist of segmentation bases which serves a knife to slice or carve up the segments correctly. Marketer must draw a close attention to the nature of the product and market, to select the most relevant variables for the best segmentation bases.Demographic variables age, disposable income, gender, cable etcGeographic variables urban, suburban, rural etcBehavioral variables benefit, occasion, usage, loyalty status etcSunrise Graycare Network (SGN) divides customers into different groups based on age, income level, location and population density.China has the largest elder population in the world, which accounts for one fifth of the worlds total old population. The aged population over 60 is 143 million by 2004, accounting for 10.97% of the total population. There are 11 provinces and municipal cities which are above the national average in population ageing. Beijing is among top of them is about 13.66% (Xiao 2007).According to the latest statistics released by 2010, the elderly population of Beijing has reached 2.54 million (CPDRC 2010). Beijings graying population is expected to grow to 6.5 million by 2050, when one in three people will be older than 60, the aging committee estimates (Cao Quan 2009).The shortfall of elder care service can be seen in Beijing. An example for whose nursing homes can only accommodate 9,924 people just 0.6% of the senior population.With longer life expectancy, growing affluence and the effects of Chinas stringent One Child Law policy leaving the elderly with a child unable to care for them (Retirement Homes 2005).Aging residents in China usually are traditionally taken care of by their children. However, nowadays young peoples lifestyles have been changed, job competition caused growing work pressures, constantly overtime and anxiety. Many young couples turn to professional service to look after their parents and grandparents (Zhang 2010). A great shortfall in eldercare in China is a serious problem caught attention by government.Seeing the size of the graying population, SGNs segment groups specifically are working adults and 60 years old and above old people in Beijing. Working professionals at middle-age who need to take after both parents and parents in law, they will also need to raise and educate their children simultaneously. These people born in the 40s to 60s are sandwich generation, they are often very tired in keeping balance between life and work.A salary survey conducted by America Huiyue Company showed that Beijing Managers earn t he juiciest salary, earning the highest salary among other cities in China (AsiaInfo Services 2002). It is believed that these people have sound financial condition and need professional care to lighten their burden.The feature of SGNs locations is a great access to very famous hospitals where potential clients frequently visit with their parents. SGN offices located in golden districts and only take about 5-10 minutes walking distance to the hospitals and residential areas.Hence, the segmentation bases zoom SGN target groups in two finer segments as belowSegmentationAgeIncome LevelLocationPopulation densitySegment Profiler 160 and aboveRMB24,000 p.a. and aboveDowntown in Beijing, adjacent to local communitiesHighSegment Profiler 240 to 60RMB36,000 p.a. and aboveDowntown in Beijing, adjacent to local communitiesHighAs Doyle (2002) specifies that there are five factors govern the attractiveness of the segment, namelySegment sizeSegment growth gainfulness of the segmentCurrent and pot ential competitionCapabilities of the businessAfter evaluating the two different market segments, SGNs targeting markets are chosen for both segment 1 and 2 based on the five factors. Due to SGN is a start- up company with limited resources, therefore, concentrated marketing strategy (or niche marketing) is deployed for the two targeting markets. The detailed epitome on attractiveness of the chosen targeting markets is as follows1. Segment sizeBy 2050, the elderly Chinese will outnumber the entire U.S. population (USA United Nations segment of Public Information 1999), the elderly population in Beijing is about 2.54 million in 2010 (CPDRC 2010). Such a large size of targeting group stubborn SGNs market prospective.2. Segment growthBeijings graying population is expected to grow to 6.5 million by 2050, when one in three people will be older than 60, the aging committee estimates (Cao Quan 2009). The data indicated clearly that the potential growth is positive, in other words, the peak of elderly service will not be ebbed but upsurge instead.3. Profitability of the segmentSGN used concentrated marketing strategy to market efficiently, which reduced marketing costs but focused to best serve consumers in the same way and to achieve profitability. The nature of business is considered a low investment yield high returns. No inventory worries.The other side, the eldercare business in China, according to Service Industry Tax Rebate Policy under Chapter 12.1 Elderly Service, it stipulated that agency for elderly service, disabled service, matchmaker agency, funeral service will not be taxed for the beginning of 3 years of business (BJ local Taxation Bureau 2010). It seems that the local government is actively promoting eldercares business by waiving off business tax and it is believed that there will be more benefits coming. It showed that SGN targeting markets can be most profitable.4. Current and potential competitionThere is still a big gap to be change and ca tered for the swelling graying population in China. Currently theres no direct competitor in Beijing, the competition will not be fierce. Although a numerous nursing homes and household agencies in local market are seen as indirect competitors, but SGN is the first company only practicing home-based eldercare service for aged 60 and above seniors, it makes SGN the top of mind company before any other rivals presence.5. Capabilities of the businessSGN established a team which is filled with versatile leaders who will inspire people to render the professional senior care to the targeting groups. The manpower capability is one of the companys key competitive advantages for business sustainable. SGN is hiring a pool of qualified and capable people to take challenging tasks every day, provided with on-job training regularly for continually business productivity. With sufficient staff on board, it is enabled to maximize business sales volume on daily basis.SGN office sites are located in four primary districts in Beijing. It serves as an all-inclusive network to attract senior residents in each district.5. Basis for Proposed Positioning ChosenBelow Figure 5.1 shows the positioning map of indirect competitors and proposed SGNs position for received market situationFigure 5.1 Positioning MapQualityPriceLowHighHighLowCluster ACluster BCluster C= Indirect competitors= SGNSource Adapted from Armstrong, Kotler and Da Silva (2006, p.236)According to recent research and survey conducted by SGN, it is found that the two eventful attributes that customers want are Quality Service and Price. These survey results are plotted in a positioning map as per Figure 5.1, which illustrates the existence of three clusters in the current China market.Clusters A, B and C are indirect competitors for elderly care service, they are either nursing homes, household agencies or periodical maid service. The brands bundled together within Cluster A considered prestige segment due to high pri ce and good service (quality), Cluster B represents the brands that are categorized in middle segment, their price and service ranked in average range. Those brands in Cluster C are pricing low and qualities are also in low level, competitors in Cluster C fall into economic segment.It is proposed that SGN positions itself as more for less for its value proposition, as shown in Figure 5.1. This value proposition is most welcome by customers and will enable us to greatly differentiate from these indirect competitors.SGN has the following competitive advantagesI. FocusSGN is only focusing in aged care solution, committed to deliver the highest standard quality of work to elderly for better quality of life.II. Home sweet homeDespite of the modern nursing homes are equipped with most advanced facilities, it is always clean or sterilized all the while. The caregivers are professional and sympathetic, but people just feel aging there is depressing in China. Home is the best place to stay i s what SGN endorse and practice. The environment is a key to ensure that clients enjoy themselves to a greater extent.III. Comprehensive serviceSGNs unique in-home care is covering all concerns from elderly people, from physical level to spiritual level needs, which other competitors are not able to fulfill some specific requirements.IV. StaffSGNs dedicated team is well-trained knowledgeable personnel with pleasant personality. General physical exertion Team is to handle the daily routine work for older people, medical and health care is handled by interdisciplinary team led by gerontological Care Manager.V. Service chargeSGNs service charge is subjected to the frequency and duration. SGN service charge is more flexible than other competitors, price options will enlarge client base and engage them from short-term to long term clients through their experience.The benefit chosen for SGNs positioning statement isSGN is the only service specialist for home-based elderly service.Hence, the overall positioning statement for SGN isTo senior citizens, SGN offers the utmost personalized elderly service at their home.6. Annual Schedule for the Programme including Marketing Budget/ExpenditureAnnual Schedule -Year of 2011a) Budget and Deployment PlanCountryJanFebMarAprMayJunJulAugSepOctNovDecMarketing BudgetTotal BudgetBeijing, China-Ads (ATL BTL)-Open domiciliate (package promotion) E-marketing Printed collaterals Referral organizationChinese New Year Feb 03-05-Ads (ATL BTL) E-marketing Roadshow (community alliance)-Referral scheme Ads (ATL BTL) Open House (package promotion) E-marketing Referral schemeLabor Day May 01- 03 Ads (ATL BTL) E-marketing Roadshow (community alliance) Referral scheme-Ads (ATL BTL)-Open House (package promotion) E-marketing Printed collaterals Referral schemeDragon ride Festival June 06 Ads (ATL BTL) E-marketing Roadshow (community alliance) Referral scheme-Ads (ATL BTL)-Open House (package promotion) E-marketing Printed collatera ls Referral scheme Ads (ATL BTL) E-marketing Roadshow (community alliance) Referral schemeMid-Autumn Festival Sep 12National Day Holiday (Oct 01-06)-Ads (ATL BTL)-Open House (package promotion) E-marketing Printed collaterals Referral scheme Ads (ATL BTL) E-marketing Roadshow (community alliance) Referral scheme-Ads (ATL BTL)-Open House (package promotion) E-marketing Printed collaterals Referral scheme Ads (ATL BTL) E-marketing Roadshow (community alliance) Referral schemeCost EstimateRMB5.000.00RMB3,000.00RMB5,000.00RMB3,000.00RMB5,000.00RMB3,000.00RMB5,000.00RMB3,000.00RMB5,000.00RMB3,000.00RMB5,000.00RMB3,000.00RMB48,000.00RMB50,000.00 SGN 2011TotalRMB48,000.007. ConclusionUpon segmentation, two distinct segments were identified and evaluated of their market attractiveness. It is recommended that SGN targets both segments, adopting concentrated marketing strategy, via single marketing mix. These two segments are Profiler 1 is a group of senior citizens of age 60 and abov e and profiler 2 is a group of middle age citizens from 40 to 60 years old working professionals.The positioning strategy proposed for SGN is more for less value proposition and positioning statement as To senior citizens, SGN offers the utmost personalized elderly service at their home.