Marketing Strategies

It is often very difficult for companies to serve everyone, everywhere. Therefore, companies locate themselves in areas where they will most likely get the most profitable customers. Instead of just trying to take over an entire market, companies instead divide up the market (market segmentation), choose the best segments for them (market targeting), and then create strategies for how to best serve those particular market segments (differentiation and positioning).

Market Segmentation: There are numerous ways for companies to categorize their customers. They can be grouped based on geographic, demographic, and behavioral factors (Geographic = location; Demographic = gender, age, etc.; Behavioral = behaviors, attitudes). The process of dividing customers into these categories is called Market Segmentation.
Market Targeting: Once the company divides up the market, it can then pick which segment(s) it will go after. Again, companies have to do research to really see which segment will be the most profitable. For some companies this is easier to do than others, as in the Build-A-Bear case. Build-A-Bear realizes that their company can only be successful where there are children close by, and will therefore target them and open stores only where a large child demographic exists.
Market Differentiation and Positioning: Once the company chooses which market segment(s) to enter, it has to now decide if and how it will differentiate between each segment. Positioning is the process of arranging for the product to be where you want it in terms of the competitors, or why a customer would pay the extra money to have your product as opposed to another brand's. Differentiation is making your market offering different and hopefully better than your competitor's, so you have as much customer value as possible. Your goal here is to have your product be the one that's associated with the actual item. For example, if my mother asks me to buy a bottle of ketchup, I will assume she means Heinz because that's just what ketchup means. It's the same with all companies. If your product is the automatic name that comes to mind when the item is mentioned, it basically means that you have created superior customer value than your competition.

When analyzing a company's situation, marketers conduct what is called the SWOT analysis, which evaluates the company's Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are within the company itself, while opportunities and threats are external, or not controlled by the company.
Once the basic SWOT analysis is done, the company can start forming its detailed marketing plan. This plan begins with an executive summary that briefly goes the company's goals and recommendations. Then, a more detailed SWOT analysis is presented, followed by the major objectives of the company, along with strategies of how to achieve them. The budget section and controls sections which are last, projects profit and loss, and outlines the controls that will monitor the progress of meeting these goals.

Just as every company has a CEO and CFO, many companies have now created a new position, CMO, or Chief Marketing Officer, to carry out the marketing plans and manage the Marketing Department in the company. Marketing control is the process of evaluating the results of the marketing plans and ensuring that the listed objectives are being achieved.