Strategic marketing management – a letter from a Customer 2

Remember the story of MLL Ori-barber? Visit @LBSInsight to get an excerpt

Key Issues:

A, Determining how MLL should play the game going forward.

B. Positioning Ori-Barber Aftershave in the appropriate market segment.

  1. Were they targeting the right consumers? Should they rebrand; re-segment to appeal to a higher income bracket?
  2. If MLL rebrands, what would advertising, repackaging, and distribution cost be?
  3. If MLL sticks with the original target market, how would they effectively expand that market and grow the business?


  1. Which key segment(s) is MLL presently targeting? Should they consider re- segmentation of their target market?
  2. After targeting, how would you effectively position the product for the selected market? How would you design a marketing plan for MLL using the appropriate Marketing Mix?
  3. How would you help Gbenga and Ndali take a long-term view toward achieving market growth? What strategy should MLL pursue using the Ansoff Matrix: market penetration, product development, market development, and diversification? Give reasons for your choice.
  4. How would you attempt to ensure success for the marketing advice you offer in (c) above? What are the key considerations needed for your strategic planning?

Section B: Key Marketing Concepts

  1.  Segmentation, Targeting & Positioning (STP)(source:

Segmentation involves categorizing markets along homogenous or related lines, using some similarity criteria to divide the market into groups. It is utilised when businesses are deciding their target customers.  Types of market segmentation include demographic, geographic, psychographic and behavioural segments.

Demographic segmentation: division of customers using criteria like age, gender, education, occupation, income and religion. An example is a manufacturer categorizing consumers into low, middle, and upper-class income segments. Geographic segmentation involves division of customers into regions, e.g., North, South, West, East, and Urban-Rural. Psychographic segmentation uses indices such as personality, lifestyle, and social class, amongst others to categorize customers. Behavioural segmentation involves division of consumers into their likely preference for products such as perceived benefits and frequency of usage.

Targeting is selecting one/more segments that shows potential for profitability given the nature and type of product. The makers of a product will use the segmentation data to find an appropriate combination of demographic, geographic, and psychographic characteristics when they cannot focus on all indices in each of the major typologies. For instance, for a “cool” new technology gadget being introduced in Nigeria, the appropriate target would likely be high school or college students who live in Lagos, with easy access to the Internet and from an upper-income family. Targeting involves strategic selection of the segment typology that may be profitable to a business. Targeting can be undifferentiated when all the segments are selected (mass market); differentiated when one or more segments are selected; and concentrated when only one segment typology is focused on.

Positioning comes after targeting, which has identified the appropriate segment(s). The role of positioning is to assure that targeted customers receive a message that a product or service will meet their desires, and preferences. It is about creating a positive image about the offering so it achieves Top of Mind Awareness (TOMA) and consumers will associate the product with meeting need providing solutions. Positioning is ensuring that the customers perceive a product or service is better than others serving the same purpose.

The Marketing Mix

A company must have a clear understanding of its customers’ needs and develop an appropriate marketing mix. Initially, the marketing mix consisted of four elements: Product, Price, Promotion, and Place (4Ps). That concept has been expanded to include – People, Process, and Physical evidence, all relevant in the service industry.

We shall concentrate on the initial 4Ps, which must be well blended to give a company, unique competitive advantage.

ProductPricePromotion Place

Companies should constantly work on improving the elements of their marketing mix to gain competitive advantage within identified target segment(s).

Ansoff Matrix

Ansoff Matrix is a strategic marketing technique that can be considered by the company after the STP process. The Ansoff Matrix identifies four strategies that a business can use to grow: market penetration, product development, market development, and diversification.

  • Market penetration: expanding sales of an existing product within existing markets.
  • Product development: introducing a new product in an existing market.
  • Market development:  introducing an existing product in a new market.
  • Diversification: trying a new product in an entirely new market.

Market penetration means devising a strategy to intensify efforts within an already successful target market. Strategies might include increasing productivity, production, awareness and visibility, improving quality and distribution. For instance, a new advert of noodles aimed at the same target market in the same locality.

Product development is an introduction of a new product in an existing market or consumer segment to achieve growth. For instance, Coca-Cola introducing a diet Coke brand to traditional Coke consumers.

Market development, a more aggressive strategy, means introducing an existing product into a new market. For instance, a company decides to offer a product that is already known in Lagos (West) to consumers in Enugu (Southeast) Nigeria.

Diversification is entering a new business to achieve growth. The company develops a new product(s) for a completely new market(s). Diversification is considered the riskiest: an unknown product in an unknown market. Diversification gives a business an opportunity to have a contingency strategy or backup plan in the event of the collapse of another part of their business.

Of Ansoff’s four marketing strategy options, market penetration appears to be the easiest as the business is not considering a new product or a new market, but is expanding distribution of an existing product within an existing market. It is about reaching out to a new consumer cohort within an existing market.

In conclusion, marketing strategy is about taking into consideration the needs, wants, and demands of customers and devising strategies to create value for the right target market and thereby make a profit. Right TOMA will lead to greater Share of Wallet.

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