Public Enterprise Management Ch10. Marketing Strategy — STP, 4P, and PLC
Public Enterprise Business Administration Ch10. Mastering Marketing
1. Five Stages of Marketing Management Philosophy
2. ★★ STP Strategy — Core of Marketing
3 Stages of STP Strategy
S — Segmentation
Dividing the market based on specific criteria. Within segments: homogeneous / Between segments: heterogeneous
T — Targeting
Selecting attractive market segments. Choosing among undifferentiated, differentiated, concentrated, and micromarketing
P — Positioning
Establishing a differentiated position in the minds of target customers. Executed via the 4Ps of marketing mix
(1) Market Segmentation Criteria Variables ★
| Classification | Variables | Role |
|---|---|---|
| Customer Behavioral Variables (Primary Role) | Benefits sought, usage situation, usage rate, brand loyalty, customer lifetime value | Core of identifying market segments |
| Demographic Variables (Secondary Role) | Age, gender, income, occupation, region, family composition | Market description and reach |
| Psychographic Variables (Secondary Role) | Lifestyle, personality | In-depth customer understanding |
4 Conditions for Effective Segmentation: Measurability / Substantiality / Accessibility / Intra-segment homogeneity & Inter-segment heterogeneity
(2) Four Types of Targeting
| Strategy | Characteristics | Examples |
|---|---|---|
| Undifferentiated Marketing | Targeting the entire market with a single product | General goods like rice, salt, sugar |
| Differentiated Marketing | Offering different products for each market segment | Estée Lauder (elderly) / Clinique (middle-aged) / MAC (youth) |
| Concentrated Marketing (Niche) | Focusing on a single market segment only | Rolls-Royce — targeting ultra-high-end customers only |
| Micromarketing ★ | Tailored marketing for individuals or specific regions | 1:1 personalized marketing, region-tailored advertising |
(3) Seven Positioning Approaches
- Attribute-based: “World’s largest theme park — Shanghai Disneyland”
- Benefit-based: “Specialized in dandruff — Head & Shoulders shampoo”
- Use-occasion-based: “Rough roads and safe winter driving — SUV commercials”
- User-based: “For those who love adventure — Timex”
- Competitor-based: “We’re No.2. But we try harder — AVIS”
- Product category-based: Positioning as an ‘energy drink’ rather than a cola
- Price/Quality-based: Highest quality ↔ Reasonable price
3. Product Strategy
(1) Three Levels of Product
| Level | Content | Example (Hotel) |
|---|---|---|
| Core Benefit | The fundamental benefit the customer is actually buying | Rest and sleep |
| Actual Product | Tangible features like design, quality, brand, packaging | Clean bed, amenities, brand |
| Augmented Product | Additional benefits exceeding expectations (core of differentiation) | Free pickup, 24-hour room service, warranty |
(2) Classification of Consumer Goods ★
| Type | Buying Behavior | Price | Distribution | Examples |
|---|---|---|---|---|
| Convenience Goods ★ | Frequent, impulse buying. No planning. | Low price | Widespread distribution (everywhere) | Toothpaste, milk, magazines |
| Shopping Goods ★ | Purchased after comparing alternatives. Shopping effort | High price | Selective distribution (few stores) | TV, furniture, clothing |
| Specialty Goods ★ | Strong loyalty to a specific brand. No alternative comparison. | Very high price | Exclusive distribution (1-2 stores) | Hermès bag, Bentley |
(3) Four Brand Development Strategies ★
| Brand Name | Existing Product Category | New Product Category |
|---|---|---|
| Existing Brand | Line Extension ★ (Shin Ramyun Black, Rice Shrimp Crackers) | Category Extension (Ferrari perfume) |
| New Brand | Multi-brands (Multiple brands in the same category) | New Brand (Launching a completely new brand) |
4. ★★ Product Life Cycle (PLC)
Sales peak during the maturity stage → decline in the decline stage. Profits (dashed line) peak in late growth to early maturity.
| Stage | Sales | Profit | Main Customers | Competition | Marketing Objective | Strategy |
|---|---|---|---|---|---|---|
| Introduction | Low | Loss to Low | Innovators | None or few | Build awareness, create trial | Focus on advertising, expand distribution |
| Growth | High growth | Gradually increasing | Early adopters | Increasing | Expand market share | Respond to competition, new segments |
| Maturity ★ | Peak to plateau | Peak maintained to decreasing | Early and late majority | Most intense | Maintain share, maximize profit | Modify market, product, and mix |
| Decline | Decreasing | Decreasing | Laggards | Decreasing | Cut costs, harvest | Withdraw, harvest, focus on niches |
PLC Key Point: Maturity is the most competitive stage. Profits are highest up to the early maturity stage. Even in the decline stage, product life can be extended through ‘Revitalization’.
5. Everett Rogers’ Diffusion of Innovation
| Classification | Proportion | Characteristics |
|---|---|---|
| Innovators | 2.5% | Risk takers. First to try new ideas |
| Early Adopters | 13.5% | Opinion leaders. Cautious but adopt early |
| Early Majority | 34% | Deliberate. Not leaders but faster than average |
| Late Majority | 34% | Skeptical. Follow after the majority adopts |
| Laggards | 16% | Tradition-bound. Adopt only after an innovation has become tradition |
Chasm (Geoffrey Moore): A large gap between early adopters and the early majority. Applying early-market success methods directly to the mainstream market leads to failure. → Requires a solution that perfectly solves mainstream customer problems.
6. ★ Pricing Strategy
(1) Four Pricing Methods
| Method | Basis | Disadvantages |
|---|---|---|
| Cost-plus pricing | Cost + standard markup | Completely ignores customers and competitors |
| Target-return pricing | Achieving target ROI | Difficult to reflect changes in demand |
| Competitor-based pricing | Competitor prices | Ignores customer-perceived value |
| Perceived-value pricing | Value perceived by customers | Most desirable method |
(2) Time-based Pricing Strategies ★★
| 구분 | Price Skimming Strategy (Skimming) | Market-Penetration Pricing Strategy (Penetration) |
|---|---|---|
| Launch Price | High → Gradually lowered | Low → Gradually raised |
| Target Customers | Price-insensitive high-income → General public | Aiming for rapid market share across the entire market |
| Suitable Situation | Strong price-quality association, no initial competition | High experience curve effects, prevent entry of competitors |
| Product Examples | New iPhone, luxury new releases | Lexus early US market entry |
(3) Price Discrimination Strategy
Charging different prices to different customer segments for the same product.
Conditions for Success: Arbitrage (buying cheap and selling high) must be impossible / No legal issues / No negative customer emotions
7. Services Marketing — SERVQUAL 5 Dimensions
| Dimension | Meaning |
|---|---|
| Reliability | Ability to perform the promised service dependably and accurately |
| Assurance | Knowledge and courtesy of employees and their ability to convey trust and confidence |
| Tangibles | Physical facilities, equipment, and appearance of personnel |
| Empathy | Caring, individualized attention provided to customers |
| Responsiveness | Willingness to help customers and provide prompt service |
Services Marketing Triangle: Internal marketing (Company → Employees) + External marketing (Company → Customers) + Interactive marketing (Employees ↔ Customers) — Service quality is realized only when all three align.
Ch10 Core Memorization Checklist
☐ Market segmentation primary basis = Customer behavioral variables (benefits, usage rate, loyalty)
☐ Consumer goods: Convenience goods (widespread distribution) / Shopping goods (selective distribution) / Specialty goods (exclusive distribution)
☐ PLC: Introduction (loss) → Growth (market share) → Maturity (highest profit, most competition) → Decline
☐ Skimming (High → Low) vs. Market Penetration (Low → High) pricing
☐ Rogers’ Diffusion of Innovation: Innovators (2.5%) → Early Adopters (13.5%) → Early Majority (34%) → Late Majority (34%) → Laggards (16%)
☐ Chasm = The gap between early adopters and the early majority
Oiyo
Editorial DeskThe OIYO editorial desk researches money, law, lifestyle, and self-understanding topics against primary sources and public statistics. Every piece carries source notes and is reviewed on a regular cycle for accuracy and usefulness.