Public Enterprise Management — Marketing Strategy — STP, 4P, and PLC

Public Enterprise Business Administration Ch10. Mastering Marketing

1. Five Stages of Marketing Management Philosophy

Evolution of Marketing Management Philosophy (Supplier -> Customer Centric)

Stage 1

Production Concept

Consumers prefer cheap and readily available products. Era of supply shortage.

Stage 2

Product Concept

Consumers prefer high quality, high performance, and unique products. Risk of 'marketing myopia'.

Stage 3

Selling Concept

Without sufficient selling and promotion, consumers will not buy. Emphasis on aggressive selling.

Stage 4

Marketing Concept

Identify customer needs and deliver satisfaction. Customer-centric management.

Stage 5

Societal Marketing Concept

Marketing concept + Corporate Social Responsibility (CSR). The goal of modern corporations.

2. ★★ STP Strategy — Core of Marketing

3 Stages of STP Strategy

S — Segmentation

Dividing the market based on specific criteria. Within segments: homogeneous / Between segments: heterogeneous

T — Targeting

Selecting attractive market segments. Choosing among undifferentiated, differentiated, concentrated, and micromarketing

P — Positioning

Establishing a differentiated position in the minds of target customers. Executed via the 4Ps of marketing mix

(1) Market Segmentation Criteria Variables ★

Classification	Variables	Role
Customer Behavioral Variables (Primary Role)	Benefits sought, usage situation, usage rate, brand loyalty, customer lifetime value	Core of identifying market segments
Demographic Variables (Secondary Role)	Age, gender, income, occupation, region, family composition	Market description and reach
Psychographic Variables (Secondary Role)	Lifestyle, personality	In-depth customer understanding

4 Conditions for Effective Segmentation: Measurability / Substantiality / Accessibility / Intra-segment homogeneity & Inter-segment heterogeneity

(2) Four Types of Targeting

Four Targeting Strategies
Strategy	Characteristics	Examples
Undifferentiated Marketing	Targeting the entire market with a single product	General goods like rice, salt, sugar
Differentiated Marketing	Offering different products for each market segment	Estée Lauder (elderly) / Clinique (middle-aged) / MAC (youth)
Concentrated Marketing (Niche)	Focusing on a single market segment only	Rolls-Royce — targeting ultra-high-end customers only
Micromarketing ★	Tailored marketing for individuals or specific regions	1:1 personalized marketing, region-tailored advertising

(3) Seven Positioning Approaches

Attribute-based: “World’s largest theme park — Shanghai Disneyland”
Benefit-based: “Specialized in dandruff — Head & Shoulders shampoo”
Use-occasion-based: “Rough roads and safe winter driving — SUV commercials”
User-based: “For those who love adventure — Timex”
Competitor-based: “We’re No.2. But we try harder — AVIS”
Product category-based: Positioning as an ‘energy drink’ rather than a cola
Price/Quality-based: Highest quality ↔ Reasonable price

3. Product Strategy

(1) Three Levels of Product

Three Levels of Product
Level	Content	Example (Hotel)
Core Benefit	The fundamental benefit the customer is actually buying	Rest and sleep
Actual Product	Tangible features like design, quality, brand, packaging	Clean bed, amenities, brand
Augmented Product	Additional benefits exceeding expectations (core of differentiation)	Free pickup, 24-hour room service, warranty

(2) Classification of Consumer Goods ★

Comparison of Three Consumer Goods Classifications
Type	Buying Behavior	Price	Distribution	Examples
Convenience Goods ★	Frequent, impulse buying. No planning.	Low price	Widespread distribution (everywhere)	Toothpaste, milk, magazines
Shopping Goods ★	Purchased after comparing alternatives. Shopping effort	High price	Selective distribution (few stores)	TV, furniture, clothing
Specialty Goods ★	Strong loyalty to a specific brand. No alternative comparison.	Very high price	Exclusive distribution (1-2 stores)	Hermès bag, Bentley

(3) Four Brand Development Strategies ★

Brand Development Strategies (Existing/New Brand × Existing/New Product)
Brand Name	Existing Product Category	New Product Category
Existing Brand	Line Extension ★ (Shin Ramyun Black, Rice Shrimp Crackers)	Category Extension (Ferrari perfume)
New Brand	Multi-brands (Multiple brands in the same category)	New Brand (Launching a completely new brand)

4. ★★ Product Life Cycle (PLC)

Product Life Cycle (PLC)

도입기 (Introduction)

성장기 (Growth)

성숙기 (Maturity)

쇠퇴기 (Decline)

Sales peak during the maturity stage → decline in the decline stage. Profits (dashed line) peak in late growth to early maturity.

Core Comparison Table of PLC 4 Stages
Stage	Sales	Profit	Main Customers	Competition	Marketing Objective	Strategy
Introduction	Low	Loss to Low	Innovators	None or few	Build awareness, create trial	Focus on advertising, expand distribution
Growth	High growth	Gradually increasing	Early adopters	Increasing	Expand market share	Respond to competition, new segments
Maturity ★	Peak to plateau	Peak maintained to decreasing	Early and late majority	Most intense	Maintain share, maximize profit	Modify market, product, and mix
Decline	Decreasing	Decreasing	Laggards	Decreasing	Cut costs, harvest	Withdraw, harvest, focus on niches

5. Everett Rogers’ Diffusion of Innovation

Five Categories of Innovator Adopters
Classification	Proportion	Characteristics
Innovators	2.5%	Risk takers. First to try new ideas
Early Adopters	13.5%	Opinion leaders. Cautious but adopt early
Early Majority	34%	Deliberate. Not leaders but faster than average
Late Majority	34%	Skeptical. Follow after the majority adopts
Laggards	16%	Tradition-bound. Adopt only after an innovation has become tradition

Chasm (Geoffrey Moore): A large gap between early adopters and the early majority. Applying early-market success methods directly to the mainstream market leads to failure. → Requires a solution that perfectly solves mainstream customer problems.

6. ★ Pricing Strategy

(1) Four Pricing Methods

Method	Basis	Disadvantages
Cost-plus pricing	Cost + standard markup	Completely ignores customers and competitors
Target-return pricing	Achieving target ROI	Difficult to reflect changes in demand
Competitor-based pricing	Competitor prices	Ignores customer-perceived value
Perceived-value pricing	Value perceived by customers	Most desirable method

(2) Time-based Pricing Strategies ★★

구분	Price Skimming Strategy (Skimming)	Market-Penetration Pricing Strategy (Penetration)
Launch Price	High → Gradually lowered	Low → Gradually raised
Target Customers	Price-insensitive high-income → General public	Aiming for rapid market share across the entire market
Suitable Situation	Strong price-quality association, no initial competition	High experience curve effects, prevent entry of competitors
Product Examples	New iPhone, luxury new releases	Lexus early US market entry

(3) Price Discrimination Strategy

Charging different prices to different customer segments for the same product.

Conditions for Success: Arbitrage (buying cheap and selling high) must be impossible / No legal issues / No negative customer emotions

7. Services Marketing — SERVQUAL 5 Dimensions

SERVQUAL 5 Dimensions of Service Quality
Dimension	Meaning
Reliability	Ability to perform the promised service dependably and accurately
Assurance	Knowledge and courtesy of employees and their ability to convey trust and confidence
Tangibles	Physical facilities, equipment, and appearance of personnel
Empathy	Caring, individualized attention provided to customers
Responsiveness	Willingness to help customers and provide prompt service

Services Marketing Triangle: Internal marketing (Company → Employees) + External marketing (Company → Customers) + Interactive marketing (Employees ↔ Customers) — Service quality is realized only when all three align.