marketing slogan and will not withstand competition (Porter, 1996).
Emotional appeals are likely to have strong effects in explaining advertising effectiveness (Kalra and Goodstein, 1998).
Fournier, Dobscha and Mick (1998) suspect that when companies ask customers for friendship, loyalty and respect, they often do not recipro- cate with friendship, loyalty and respect. They cite examples of such behaviour as loyal customers swamped by inappropriate mailings that seem to treat them as new marketing targets and ignore any long-standing relationship. They conclude that this has brought the viability of the entire marketing discipline into question by actually making customers less trusting and suggest that ‘we’ve taken advantage of the words for long enough’ (51). The positioning decision has to take account of the ability of the business to fulfil claims and promises before making wayward claims of ability and competence.
The vast increase in the number and availability of products has led to products and services becoming more and more similar with companies imitating each others’ technological advantages with the consequence that emotional logic has become the single most important business driver ( Jones, 2000). As Hatch and Schultz (2001: 130) point out: ‘Our research into 100 companies around the world over ten years shows that a company must align three essential elements – call them strategic stars – to create a strong corporate brand: vision, culture, and image . . . aligning the stars takes concentrated managerial skill and will.’ This reflects recognition that emotion alone is insufficient to establish a long-term relationship and a need for the application of genuine facets in the establishment of a positioning strategy.
Segmentation, Targeting and Positioning 31 of customer geography or customer scale – or of anything that requires a different set of activities to reach customers in the best way (Porter, 1996: 66). As Porter (1979: 143) says: ‘Strategy can be viewed as building defences against the competitive forces or as finding positions in the industry where the forces are weakest.’
The basis of strategy is the detailed analysis of customers and competi- tors and of the resources and skills for competing in target market segments (Day and Wensley, 1988). Managers have to operate in a world that is changing all the time and where nothing is constant, whether in technology, politics or society, and this constant change presents new strategic challenges and makes business strategy more difficult to plan and implement (Maljers, 1990). Dependence on operational plans and promotional props rather than a long-term personality and a strategic perspective would lead to a short life for a brand (Chernatony and McDonald, 1992).
The key outcomes of any planning process are market segmentation, market targeting, and positioning in the target segments resulting in the key strategic question of how to compete in the firm’s chosen businesses (Webster, 1992). The positioning decision in strategic terms is the one that chooses the exact value basis on which the firm will compete and differentiate from competitive offerings (Czepiel, 1992). The meaning and relevance of segmentation, targeting and positioning, or even the separate aspects of the process, are seen in different ways. Market segmentation to the market researcher refers to a set of techniques designed to produce discrete segments of people, but segmentation to marketing management refers to a strategy of directing products at specific target groups (Sampson, 1992). However, Sampson (1992) proposes that seg- mentation is an operational tool for promotion that explores the minds of consumers through qualitative research and leads to hypothesized and subsequently validated psychological segments.
Strategy is the art of creating value, the way a company defines its business and links together two important resources – knowledge and relationships, or an organization’s competencies and customers – with a company positioning itself in the right place on the value chain – the right business, the right products and market segments, the right value- adding activities (Normann and Ramirez, 1993). As Kotler (1994b: 356) points out: ‘Strategic marketing is the homework that a company must do before it establishes the marketing mix. Companies must carry out STP: segmentation, targeting and positioning.’
Resources are ‘the tangible and intangible entities available to the firm that enable it to produce efficiently and/or effectively a market
offering that has value for some market segment or segments’ (Hunt and Morgan, 1995: 6). The way that a company perceives its resources is therefore significant in the creation of value. Knowledge and relationships, and competencies and customers, are resources that will vary in perceived importance and influence from one business to another. Similarly, different market segments will place different values on these resources.
Positioning strategy is not sustainable when operated solely as a communications function. The position of a product or service in the marketplace relative to the competition based on taglines, names and logo designs requires further actions to be planned and implemented in order to strengthen brand loyalty and to reinforce a brand character (Bergstrom and Bresnahan, 1996) and these need to have a firm founda- tion in fact and reality. Strategy is about combining activities and oper- ational effectiveness is about achieving excellence in individual activities or functions (Porter, 1996). Critical marketing dimensions such as price, product features, distribution and promotions are a fundamental determinant of market acceptance and are the foundation for enabling strategies rather than a definitive positioning strategy (Hill, 1997). Hooley, Saunders and Piercy (1998: 25) point out:
Strategic marketing planning today attempts to build flexibility into the organization to enable it to cope with [an] increased level of complexity and uncertainty and to take full advantage of the changing environment. At the heart of that planning process is the creation of a strong competitive position and a robust marketing strategy.
A strong competitive position is not only the result of planning to satisfy the needs of chosen customers through the creation of superior value, but it is likely to take account of the ability of the business to do so: ‘By better understanding the relationship between their company’s assets and the particular characteristics of their industry, managers can also anticipate how their strategies may evolve over time’ (Dawar and Frost, 1999: 129).
Branding has to embody the personality and beliefs of the company, a holistic approach of brand and organization, and companies need to be defined by the products they make (Kunde, 2000). Pringle and Gordon (2001) identify household names such as Marks & Spencer, Barclays, Railtrack, Nike, Perrier, Hoover, Persil and others who have not only experienced major operational problems but also vitally misunderstood the promise that their name made to customers. They propose that the
Segmentation, Targeting and Positioning 33 name or brand represents promises that a customer expects from the product, service or company. This expectation, say Pringle and Gordon (2001), is based on ‘brand manners’. People’s behaviour towards each other is based on a kind of code of how things should be done and implies relating to each other with mutual respect. This suggests a promise, a guarantee or statement about the purchaser and a record of fulfilment, good or bad, fixed in memory as an expression of the organization, and inclusive from chief executive to receptionist (ibid.).