Diffrentiate between marketing- strategy formulation for Pure-Play company and Bricks-and -Mortar company

Pure play is a purely online company. The business and marketing strategy process for Internet pure plays such as Yahoo! And eBay is depicted. First, the business-unit strategy is defined. Then, the marketing strategy is specified, following the traditional processes of segmentation, targeting, and positioning. It should also be noted that while Internet marketing strategy is employed for the online business, it is highly likely that both online and offline marketing levers for example customer e-mails and print advertisements are going to be used to build a customer relationship. In this scenario, the processes of segmentation, targeting and positioning remain largely the same as for a completely offline business.

The process of segmentation involves breaking up a market of customers into large, identifiable groups, or segments. For instance, within the market of automobiles, there may be customers who highly value negotiation-free purchasing and the convenience of buying cars through the Internet. Segmentation can reveal this and other characteristics the groups of customers’ value.
Marketing literature often cites four broad segmentation categories. Examples of variables within each category are included in the following list.
>Demographic: age, gender, occupation, ethnicity, income, family status, and life stage.
>Geographic: ISP domain, country, region, city and density( urban, sub urban, rural)
>Psychographic: lifestyle, social class, and personality.
>Cognitive and behavioral: benefits sought, usage rate, loyalty status, and attitude toward product.

The effective segmentation must be:-
>Meaningful. It must help describe and explain why customers currently behave in a specific way.
>Actionable. It must allow for feasible execution, in terms of targeting and positioning to that segment.
>Financially, attractive. Target segments must be economically worth going after.

The marketing strategy now changes to targeting, or the process of evaluation market segments for overall attractiveness, and choosing segments that are consistent with the firm’s marketing strategy and capabilities. In evaluating market segments for overall attractiveness, firms can look at three factors; -
>Segment size and growth,
>Segment structural attractiveness.
>Company objectives & resources.

Once markets have been segmented and targeted, positioning then becomes the next step in the marketing strategy. There are positioning strategies;-
>Positioning on features to be perceived as the best in a particular product or service attribute, like style.
>Positioning on benefits to be perceived as effectively providing benefits such as happiness.
>Specific usage occasions such as functional for a given purpose.
>User category based on specific type of user .
>Against another product better than competitor.
>Product class positioning different type of product from what customer expect.
>Hybrid/combination of the above.

Once markets have been segmented and targeted and a positioning strategy has been chosen, a positioning plan can be put into place.
>Identify actual product positioning.
This step identifies, through consumer interviews or questionnaires, the variables important to consumers and the perceived position of a product according to these variables. This step also identifies competitors and their positions in the broader market, primarily through establishing appropriate perceptual maps. These maps visually show where different products serve different segments of the market.
>Determine ideal product position.
This step determines how to position a product in a more favorable location on the perceptual map. Determining the ideal position depends largely on the positioning strategy chosen.
>Develop alternative strategies for achieving ideal product position.
Attempt to reposition an existing product to a new position, with or without a change in the product itself. It also introduce a separate a new product with the characteristics necessary for the ideal positioning.
>Select & implement the most promising alternative.
The success of this step depends on choosing a plan that is the most favorable and consistent with a company’s objectives, resources and strengths. Implementation of the plan should include specific guidelines concerning what activities to carry out, when they should be carried out, who should carry them out, and how they might ultimately be accomplished.
>Compare new actual position with ideal position.
The positioning process must also include measures to track the success of the positioning move. Marketing strategy in an going process that involves decision making, implementation , the equally important task of tracking.

Bricks-and-Mortar is now considering the marketing strategy formulation for the retail firm Gap. The first task is to define the scope of the business unit. Let us assume that the business unit has both an offline retail store (GAP) and an online store (www.gap.com). Gap must first consider its overall business-unit strategy-mission, goals, competitive advantage, and revenue model. Within this context, the firm must develop an integrative marketing plan, one that reflects both the online and offline efforts. This integrative marketing planning effort combines the marketing effort for the retail stores (noted as marketing strategy for offline business) and the marketing effort for the online store (noted as marketing strategy for online business).

Given that Gap stores preceded the development of the website, it is clear that Gap.com must optimize its online marketing strategy within the context of Gap’s broader strategy-its offline positioning, image and asset base ( manufacturing plants, vendor relationship, etc.). Thus, Gap.com strategy is not a “green field” exercise; there are certain contexts and parameters that the marketing strategy, then requires choosing the degree of correspondence and consistency between the existing offline brand and assets.

Gap’s online marketing strategist must make choices related to segmentation approach, target segment, and subsequent positioning in light of the constraints and opportunities posed by the firm’s offline operation and strategic focus. This makes the job of the online marketing strategist very complex.

The basis for segmenting markets will naturally change when offline companies begin looking at customers on the internet, where variables such as geography were of primary importance in the past, ISP domain might now be considered.
>No change. Firms might find that online segmentation does not reveal any significantly new segments, and that the relative compositions and sizes of the online customer segments might be generally the same as the offline segments.
>Market expansion. Firms might find that the characteristics of the online segment are the same as the characteristics of the offline segment, but that the segment size changes.
>Market reclassification. Online segmentation could reveal that customer segments are different on the Internet , either slightly or significantly.
>Reclassified expansion. Firms might experience a combination of the previous two scenarios, so that segments might simultaneously change in both size and characteristics.

Targeting for BAMs moving online involve;-
>Blanket targeting. Firm might find that online segmentation does not reveal anything new, in effect , the general characteristics of the segments remain the same as those of the offline segments.
>Beachhead targeting. Another possible scenario arises when the online segment of customers is found to be smaller than the offline segment, perhaps representing a more narrow band of taste and preferences. This might be true if only part of a firm consumer base uses the internet to make purchases.
>Bleed-over targeting. The online target segment includes part, but not all, of the offline segment but also targets part of a distinctly new customer segment. The new target segment might include individuals previously ignored in offline targeting choices.
>New opportunity targeting. Online marketing strategy might choose an entirely different target segment. The target customer segment represents distantly different needs and preferences from the traditional offline segment.

Positioning for BAMs moving online involve;-
>Blanket positioning. The target segment does not change, and apporriatte positioning is fairly simple. Likely borrow heavily from existing offline positioning strategies, since the goal is to appeal to the same group of customers. The added advantage of internet, such as convenience and access.
>Beachhead targeting. Also borrow from offline positioning. Focus more, however, on needs of the smaller group and stress value-added advantages of the Internet. This positioning assumes that the smaller segment puts more value on the internet’s extended capabilities for convenience and access.
>New opportunity targeting. Reposition entirely and position differentiations which cater to the new segment. Arguably, such a positioning strategy is more effective if previous offline positioning strategies have not yet affected the new segment perception of the offering. This work for instance when increased geographic reach now allows a firm to communicate with new and different customers over the internet, giving that firm a chance to build a new position.
>Bleed-over targeting. Use dual positioning. Leverage existing positioning and position added benefits, such as augmented offerings via the Internet. For example increased product customizability. For example, gap’s online store might emphasize gap’s style while simultaneously stressing the ability to tailor clothes through gap’s online store.