Purpose - It is widely accepted that the process of developing marketing strategy is composed of three steps: market segmentation, target market selection and positioning. However, mass marketing strategy based on cost reduction through economies of scale and standardized products, can be also an ef...
Purpose - It is widely accepted that the process of developing marketing strategy is composed of three steps: market segmentation, target market selection and positioning. However, mass marketing strategy based on cost reduction through economies of scale and standardized products, can be also an effective strategic option. Many marketing scholars including Theodore Levitt emphasize the importance of applying the mass production concept to various industries including service industries. Especially, in times of economic downturn, the capability of providing consumers with low-priced, value products can be an important source of competitive advantage, as well as the ability of providing high-priced premium products. Marketers should decide whether they will implement mass marketing strategy or target marketing strategy. The present study theoretically shows that firms should understand the target customers' price elasticity as well as the firm's cost structure in order to make such a strategic decision. Research design, data, and methodology - Instead of implementing an empirical study, this study provides a theoretical(mathematical) investigation on the effect of consumers' price elasticity on a firm's optimal price level, profit, sales volume, revenue, and cost. The results are mostly deduced from derivative calculations and several graphs are utilized to represent the results on the relationships between the variables under study. Results - The analytical results suggest that it is more profitable for a firm to adopt the segment/target marketing strategy (more specifically the differentiation strategy) when the degree of consumers' heterogeneity is high and the proportion of the fixed cost in the total cost is low. On the other hand, if the degree of consumers' heterogeneity is low and the fixed cost is high, it is better to adopt the mass marketing strategy or the cost leadership strategy. The strategy of concentrating on a single target market will be effective when consumers' needs are highly heterogeneous but the fixed cost is high. Any of the three types of generic strategies proposed my Porter(1980, 1985) can be applied when both the consumers' heterogeneity and the fixed cost are low. This study also proposes the contribution-margin-based method for developing the optimal pricing strategy. Conclusions - One of the primary roles of marketers is to find a proper compromise between the two conflicting goals of maximizing customer satisfaction and minimizing cost. In order to do so, he or she should understand the characteristics of the target customers as well as the cost structure of the firm. In addition to the theoretical analyses, this study discusses several business cases and explains how superior companies find the optimal compromise position between these two goals and dominate the market. One of the radical changes recently taking place in business arena is the reduction of production and distribution costs of both physical goods and information due to the advancement and the wide diffusion of information technology. The cost reduction combined with lowered priced elasticity incurred by customized products and services, will enable many firms to adopt the mass customization strategy.
Purpose - It is widely accepted that the process of developing marketing strategy is composed of three steps: market segmentation, target market selection and positioning. However, mass marketing strategy based on cost reduction through economies of scale and standardized products, can be also an effective strategic option. Many marketing scholars including Theodore Levitt emphasize the importance of applying the mass production concept to various industries including service industries. Especially, in times of economic downturn, the capability of providing consumers with low-priced, value products can be an important source of competitive advantage, as well as the ability of providing high-priced premium products. Marketers should decide whether they will implement mass marketing strategy or target marketing strategy. The present study theoretically shows that firms should understand the target customers' price elasticity as well as the firm's cost structure in order to make such a strategic decision. Research design, data, and methodology - Instead of implementing an empirical study, this study provides a theoretical(mathematical) investigation on the effect of consumers' price elasticity on a firm's optimal price level, profit, sales volume, revenue, and cost. The results are mostly deduced from derivative calculations and several graphs are utilized to represent the results on the relationships between the variables under study. Results - The analytical results suggest that it is more profitable for a firm to adopt the segment/target marketing strategy (more specifically the differentiation strategy) when the degree of consumers' heterogeneity is high and the proportion of the fixed cost in the total cost is low. On the other hand, if the degree of consumers' heterogeneity is low and the fixed cost is high, it is better to adopt the mass marketing strategy or the cost leadership strategy. The strategy of concentrating on a single target market will be effective when consumers' needs are highly heterogeneous but the fixed cost is high. Any of the three types of generic strategies proposed my Porter(1980, 1985) can be applied when both the consumers' heterogeneity and the fixed cost are low. This study also proposes the contribution-margin-based method for developing the optimal pricing strategy. Conclusions - One of the primary roles of marketers is to find a proper compromise between the two conflicting goals of maximizing customer satisfaction and minimizing cost. In order to do so, he or she should understand the characteristics of the target customers as well as the cost structure of the firm. In addition to the theoretical analyses, this study discusses several business cases and explains how superior companies find the optimal compromise position between these two goals and dominate the market. One of the radical changes recently taking place in business arena is the reduction of production and distribution costs of both physical goods and information due to the advancement and the wide diffusion of information technology. The cost reduction combined with lowered priced elasticity incurred by customized products and services, will enable many firms to adopt the mass customization strategy.
표적시장 마케팅은 전체 시장을 동질적인 여러 개의 하위시장(세분시장)으로 구분하고 각각의 세분시장의 욕구에 맞게 차별화된 제품 및 마케팅 믹스를 제공하는 전략이다. 이 전략에 의해서 세분 시장별 고객만족도는 높아지지만 규모의 경제의 효과가 크게 나타나지 않기 때문에 대량마케팅과 비교할 때 실행하는데 더 높은 비용이 발생한다. 대량마케팅 전략은 Porter(1985)가 주장하는 비용우위 전략과 내용적으로 매우 유사하며, 표적시장 마케팅 전략은 차별화 혹은 집중화 전략과 유사한 개념으로 이해될 수 있다.
대량 마케팅이란?
대량 마케팅이란 전체 시장에 표준화된 제품이나 서비스를 제공하는 마케팅 전략을 의미한다. 대량 마케팅 전략은 흔히 생산개념(production concept)(Keith, 1960) 혹은 대량생산(mass production) 개념과 동일시되는데, 이러한 전략에서는 생산비용 절감을 위해서 표준화된 제품을 대량생산하며, 이를 통해서 고객들에게 낮은 가격에 제품을 제공하는 것이 경쟁우위가 된다.
기업이 활용할 수 있는 마케팅 전략을 구분하면?
기업이 활용할 수 있는 마케팅 전략을 크게 두 가지로 구분하면 대량 마케팅(mass marketing)과 표적시장(혹은 세분시장) 마케팅(target marketing/segment marketing)으로 나눌 수 있다(Kotler, 2002). 일반적으로 마케팅 전략이라고 하면 표적시장 마케팅을 지칭하는 경우가 많으며, 표적시장 마케팅은 시장세분화, 표적시장 선정, 그리고 포지셔닝의 3단계 과정으로 실행된다.
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