1. segmentation, dividing the market into small segments,
2. targeting, selecting the segments you will target and appeal to,
3. differentiation, differentiating the products and creating competitive advantage, and
4. positioning, positioning the products in the minds of customers.
I found some Japanese companies and products that illustrate well the importance of these steps of marketing, so I'll show you.
The first example is "スタジオアリス" or "Studio Alice Co.,Ltd.," which are a Japanese photo studio company, targeting the families who have children.
Customers may use photo studio in various occasions, such as wedding, graduation, coming of age ceremony and so on. However, Studio Alice targeted children and provides the services that fit children. For example, most workers in Studio Alice are women.
Studio Alice provide the service of free costume rental, and it allows customers to change costumes as much as they want, so that children enjoy taking pictures. Also, thanks to the service, not only parents but also grand parents come to the photo studio for grand children and enjoy to choose costume and posing all together. Studio Alice give customers a enjoyable place where all families get together for children. This service also benefits Studio Alice, because grand parents also come to the store, so customers have what is called "six pockets," parents and grand parents pocket money, and photos sell well.
There are a lot of companies whose service is taking pictures, but Studio Alice targeted children, and differentiate its services that provide the place for children and their family to enjoy taking photos, so Studio Alice succeeded.
The next example is "Kit Kat,"a chocolate from Nestlé.
At first, Kit Kat was a just one of a reasonable chocolate brands in Japan.
However, now Kit Kat is a lucky chocolate that brings student a luck to pass the entrance exam.
This is because of play on words.In Japanese, "Kitto Katsu" means "You will win," and the pronunciation is similar to "Kit Kat." Also, the entrance exams for college, university, high school, or junior and high are very big and important events for Japanese students.
Therefore, the company market Kit Kat focusing on students who will take the exams that are usually taken place on the spring., their friends and families.
For example, the package of Kit Kat has space to write message, so that people can give Kit Kat to friends who are going to take exam. Marketers position Kit Kat as a perfect gift to the students, because the name of Kit Kat is very good for exam, chocolate gives energy for the exam, and Kit Kat is not so expensive to give friends. This Kit Kat in the picture below has a place to put a stamp and write a zip code, to send Kit Kat as a mail.
Also a lot of cherry blossom flower are printed on the package, because the cherry blossom flower is the symbol of passing the exam.
Because of these efforts, Kit Kat sell better that before, even though Kit Kat itself is the same as before.
Kit Kat also position itself by different way.
Kit Kat has a lot of tastes only provided in a limited region, and regarded as a popular and useful souvenir to give others.
For example in Kyoto, a famous green tea producer, there is a green tea Kit Kat.
In Hokkaido, a famous melon producer, there is a melon Kit Kat.
Kat Kat target students who will take exams and tourists, differentiate from another chocolate, by its design and tastes.
After these marketing efforts, Kit Kat is not a just chocolate, has a unique brand image, and sell well.
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