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October 26, 2013

Essay on CAM Marketing and Consumer Behavior Assignment

CAM Marketing & Consumer Behaviour Assignment



This research paper will address the concept of market segmentation, targeting and positioning (STP), the importance of branding to customers and organisation with relevance to the BHP Billiton organisation. Headquartered in Melbourne, Australia, BHP Billiton is an Australian multinational petroleum and mining company with a major management office in London, United Kingdom. Measured by market capitalization it is the 3rd largest company of the world and the largest mining company of the world, in accordance to the revenues of the year of 2011.


Task 1 – Explanation of the Concept of Market Segmentation, Targeting & Positioning (STP)

For product promotion amongst all individuals, similar strategies cannot be afforded by an organisation as same demand and requirement are not acquired by every individual. This results to the concept of market segmentation, targeting and positioning (STP) which was derived by the marketers. In understanding the strategies and marketing of firms, the STP process is a fundamental concept.
In the process of product promotion, the first step is segmentation. The market segmentation is division of a broad market into small segments that comprise of individuals with similar thinking and inclination towards similar brands and products (Dibb & Simkin, 2008, pp. 7). To bring together consumers who have similar interests, needs, and requirements within a large market, the process of creation of small groups is referred to as market segmentation. Identical products are required, and similar market fluctuations are responded by individuals in a particular segment, therefore, grouping is another word used for market segmentation. The segments must be distinct from one another, profitable, accessible and measurable in order to be useful.
In accordance to the tastes of the individuals of a particular segment, various promotional schemes and marketing strategies are devised by the marketer after he or she created different segments within the market and this process are known as targeting. The market segments are targeted by the organization after they have been created. Once the markets have been segmented, targeting is the second stage of the STP process.
In the segmentation targeting positioning cycle, is the last stage is positioning. To create an image of the product in the minds of the consumers, the organisation strives hard once it has decided its target market. Through positioning, in the minds of consumers, the first impression of the product is created by the marketer. In the minds of the target audience, the organisations are helped by positioning to create a perception of the products.

The Three Key Theories within marketing – Segmentation, Targeting & Positioning (STP)

Based on customer needs and characteristics, the process of dividing the market into segments is known as segmenting. Selection of the attractive customer segments, analysing the intensity of competitors in the market, identification of segments, determination of the potential and the actual customers, are the four sub activities of the main activity segmenting.
The first part of the topic of competitor analysis is the third step of segmenting as a company must decide its entrance into a certain market and it is hard to obtain a profitable market share, when there is a high intensity of competitors (Dacko, 2007, pp. 587). The attractiveness of entering a certain market is greatly influenced by the competitors as a company is never alone in a market.
The existence of no homogeneous market is the fact on which the need for segmenting a market is based. The market can be divided in different customer groups for one product. The variables used for this segmenting in these groups are usually demographic, behavioural and psycho-graphical variables which results in heterogeneous and homogeneous segments.
Since in defining a target market, other relevant factors also come into play, a company must not directly start targeting all these segments after the most attractive segments are selected. Deciding on the actual target markets, in comparison to the abilities of the competitors the consideration of the abilities of the company, analysis of the skills and resources of the competitors and defining the required resources and the abilities of the company to enter a market, are the four sub activities within targeting.
A list of most attractive segments and a good chance of a profitable market share is derived from the results of the competitor analysis. It is essential to know the differential advantages of each segment to decide on the actual marketing strategy.
A good marketing mix must be decided by a company after it has made the list of target markets. The creation of an image or identity of the product in the mind of the customer is critical for developing the marketing mix. Decision of different positioning concept for each of these segments and identification of the differential advantages in each segment is the steps in the process of positioning the company. The company can start on creating the marketing mix once it has created the positioning statement. In order to create a good positioning statement, the abilities and competitors of the company and analysis of the market must be done.

The Concept of Market Segmentation, Targeting & Positioning (STP) applied BHP Billiton

The BHP Billiton falls under the category of mining and diversified metals and is in the sector of manufacturing and mining. ‘Resourcing the future’ is the slogan/tagline of the company. The USP of the company is the ‘The largest producers of the world of significant commodities, like, uranium, silver, nickel, metallurgical coal, manganese, iron ore, energy coal, copper and aluminium along with substantial interests in gas and oil’. Based on commodities extracted by the company, industrial segmentation is the segment of the company (PainterMorland, 2006, pp. 352).
The target group of the company is customer sector groups (CSG), like, speciality products and diamonds, manganese, stainless steel materials, aluminium, energy coals, metallurgical coal, petroleum, base metals and iron ore. Provision of low cost and diversified commodities is the positioning of the company. The major competitors of the company are Total S.A., Nippon Steel Corporation, BP Plc., ExxonMobil Corporation, Royal Dutch Shell plc, Chevron Corporation, ThyssenKrupp AG and Anglo American plc.

The Example of STP

A wide range of merchandise is offered by Garnier for both women and men. Amongst the specific market segments, like, the older generation, teenagers, women and men, each of their brands has been targeted effectively; they have creams to fight signs of wrinkles and ageing for the older generation, Garnier light fairness cream and hair colour products for teenagers, daily hair care and skin care products for women and deodorant and sunscreen lotions for men. A sunscreen lotion designed for men will never be approached by a woman, this reflects the brand positioning.

Task 2 – Explanation of the Importance of Branding to Customers

The Point of View of Branding by Customers

The integral part of the business building process is branding. Hundreds of millions of dollars are spent by large corporations in building their brands as value is added by brands, an emotion is conveyed, a message about the expectations of the customers is delivered, make it easier for current customers or clients to refer the company to others, lead to repeat purchases and build customer loyalty and enable customers to remember your product-service (De Chernatony, 1991, pp. 50). The customer expectations can be set within a brand as those expectations are counted when the service or product is purchased by the customer.
Consumers are persuaded by branding about a particular business which is the only company that can provide the solution to certain demands of service or product. Relational to their expectations, strong brands are trusted more by customers.

The Benefits of Branding to Customers

An effective brand will encourages customer loyalty and will motivate them to make a purchase. In compare to competing brands, the service or product from whom a positive experience was gained by the customer is more likely to be purchased more. Customers also buy related items of the same brand if they have developed a brand identity of the company.

The Examples of Importance of Brands and Branding for Customers

Identifiers developed by the company and nailed in accordance to the company name in the minds of public helps people when the identity of companies, who’s products or services they will want to purchase again, are reinforced by material reminders. Sticking and using an unusual colour combination can drive memorability, like, orange and purple colour used by FedEx’s.

Task 3 – Explanation of the Importance of Branding to Organisations

The Point of View of Branding by Organisations

Branding is the building of trust with stakeholders, customers and employees. The total of the values of the company inclusive of culture, positioning, advertising, people, services and products are the definition of branding in marketing terms. Through a company’s slogan, web presence, logo and name, branding can be accomplished as the identity of the company is defined by the brand (Mudambi, 2002, pp. 525). Whether it is multinational dollar cooperation or one man cooperation, branding the business is critical. Credibility with future customers can be built through brands. With the most significant factors of business, namely pricing, an organisation can be more in control and flexible through the strategic branding.

The Benefits of Branding to Organisations

Equating to higher ROI and profits, higher levels of conversion and stronger customer relationships are enjoyed by a business that have consistent and compelling brand. An effective brand is a great way for a business to differentiate itself from competitors and it promote the creditability of a business. It extends the product range, helps in product differentiation of one product from another and aids in personal selling. Increase in sales is the one of the benefits provided by branding to small businesses (Clifton, 2009, pp. 2). The target audience will accept the increased price as the company needs to increase its prices due to its small size.
Without losing the trust of the customers, the company can build up the next stage successfully if it is built upon a solid brand base. The uniqueness of the product is developed through branding. Trust and confidence in the service/product of the company are encouraged by the branding; if the problems are resolved in accordance to the brand ethos of the company then the customer will be more likely to understand the situation when a one-off issue with a service or product is experienced by the company.

The Examples of Importance of Brands and Branding for Organisations

In order to become the dominant brand and in order to promote the brand each year, an obscene amount of money is spent by Coca-Cola and Pepsi. The advertisements of both the company are focused on creating brand loyalty and brand awareness and selling their brands instead of making a contribution to its product because they want an inseparable link to be formed between the provider and its product through a well-established brand. Better products are outsold by better perceptions. For example, taste test is blinded by the famous Pepsi/Coke. Coke nearly always wins, whereas, the blindfold is required to take off by Pepsi as it tends to have a slight advantage.

Task 4 – The Use of Extended (7Ps) Marketing Mix by the Organisation

The modern marketing mix related to the service industry and to any form of business where the needs of customers is the first priority to be filled, processes, provision of service, physical presence, promotion, place, product, and price, are the seven P's included in it. The organisation is enabled to satisfy the requirements of the customers and meet its marketing objectives by getting the right mix of these elements (Goi, 2009, p. 2). Processes for handling order, for identifying customer requirements and needs and for handling customer complaints are the number of processes that are associated with customer service and in making marketing effective in an organisation. The heart of modern service industries is the customer service. The physical layout is also relevant to the structure of websites and virtual stores visited by the customer than to stores.

The Use of Extended (7Ps) Marketing Mix by BHP Billiton

The brand image is enhanced further through CSR activities, one of the largest mining and petroleum companies, strong workforce with over forty five thousands of employees, very strong international brand name, marketing is done centrally for all CSGs, strong financial position and diversified revenue stream, good return on assets owned – strong market position, are the various strengths of BHP Billiton. The revenue line of the Group is managed by the marketing organisation of BHP Billiton. Defining the company’s view of long-term market fundamentals, for the products of the group achieving market-clearing prices, with the revenue line the associated managing price risk and credit, from suppliers to asset and from asset to raw materials and market the supply chain of the various products of the company, and the purchasing of all major raw materials and selling of products are the factors that are included in the revenue line of the Group.
Close to the customers the marketers are located in regional offices and the marketing organisation have hubs in Houston and Singapore which ensure that the company is able to understand the markets that underpin its business and is able to meet the needs of its customers. The easy flow of information in the centralised marketing structure of the company, the proximity to its customers and multi-commodity nature of the business strengthens the market insight of the company. It positions the company to respond quickly to the arising changes in the market place and allow the company to form a more robust view of long-term market fundamentals.


Through the merger of the Anglo-Dutch Billiton PLC and the Australian Broken Hill Proprietary Company Limited (BHP), in the year of 2001 the BHP Billiton was created. On the Australian Securities Exchange, the Australian-registered BHP Billiton has a primary listing and is the majority partner.


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