Marketing management employs tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter’s five forces, analysis of strategic groups of competitors, value chain analysis, and others.
Marketing management often conducts market research and marketing research to perform marketing analysis. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
- Qualitative marketing research, such as focus groups and various types of interviews
- Quantitative marketing research, such as statistical surveys
- Experimental techniques such as test markets
- Observational techniques such as ethnographic (on-site) observation
Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company’s marketing analysis.
Marketing strategy
Two customer segments are often selected as targets because they score highly on two dimensions:
- The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors; and
- The company has the resources and capabilities to compete for the segment’s business, can meet their needs better than the competition, and can do so profitably.
A commonly cited definition of marketing is simply “meeting needs profitably”.
The implication of selecting target segments is that the business will subsequently allocate more resources to acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some cases, the firm may go so far as to turn away customers who are not in its target segment. The doorman at a swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has made a strategic decision to target the “high fashion” segment of nightclub patrons.