·
Market
o
Market: people or
organizations with needs of wants and the ability and willingness to buy
o
Market Segment:
subgroup of people or organizations sharing one or more characteristics that
cause them to have similar product needs
o
Market
segmentation: process of dividing a market into meaningful, relatively similar,
and identifiable segments or groups
o
The term market
means different things to different people.
o
Familiar markets
such as supermarket, stock market, labor market, fish market, and flea market
share several characteristics.
o
A market is composed of people or organizations who:
o
Have wants and needs that can be satisfied by
particular product categories.
o
Have the ability to buy the products they seek.
o
Are willing to exchange their resources, usually money
or credit, for desired products.
o
The purpose of market
segmentation is to enable the marketer to tailor marketing mixes to meet
the needs of one or more specific segments.
o
Importance for
segmentation:
o
Plays a key role in the marketing strategy of
successful organizations
o
Powerful marketing tool
o
Helps marketers define customer needs and wants
precisely
o
Helps decision makers define objectives and allocate
resources more accurately
·
Criteria for
Successful segmentation
o
Produces market
segments that meet:
o
Substantiality - Segment must be
large enough to warrant developing and maintaining a special marketing mix
o
Identifiability and measurability - Segment must be
identifiable and its size measurable
o
Accessibility - Marketing mix must be
reachable to members of targeted segments
o
Responsiveness - Segment need not be treated
separately unless it respond differently to a marketing mix
o
Markets are
segmented for three reasons:
o
Segmentation
enables the identification of groups of customers with similar needs and the
analysis of the buying behavior of these groups.
o
Segmentation
provides information to design marketing mixes to match the characteristics of
the segment.
o
Segmentation helps
marketers satisfy customer wants and needs while meeting the organization’s objectives.
·
Bases for
Segmentation
o
Geography,
demography, psychographics, benefits sought, usage rate
·
Geographic
Segmentation
o
Segments market
by: region of a country or the world, market size, market density (number of
people within a unit of land), climate (impacts purchasing behavior)
·
Demographic
Segmentation
o
Age, gender,
income, ethnic background, family life cycle
·
Gender and Income
Segmentation
o
Gender
segmentation
o
Uses different
strategies for men and women
o
Many marketers
are going after the less-traditional market
o
Income
segmentation
o
Income level
influences consumers’ wants and determines their buying power
o
Retailers can
appeal to low-income or high-income categories, or both
·
Bases for
Psychographic Segmentation
o
Personality,
motives, lifestyles, geo-demographics
o
Personality
reflects a person’s traits, attitudes, and habits.
o
Example - People
buy clothes that they feel represent their personalities and give others an
idea of who they are.
o
Motives - Marketers might
appeal to emotional, rational, or status-related motives, among others.
o
Example -
Carmakers might appeal to customers with status-related motives, whereas makers
of baby product might appeal to emotional motives.
o
Lifestyle
segmentation divides people into groups according to the way they spend their
time, the importance of the things around them, their beliefs, and
socioeconomic characteristics such as income and education.
o
Geodemographic
segmentation: Segmenting potential customers
into neighborhood lifestyle categories
o
It helps marketers
develop marketing programs tailored to prospective buyers who live in small
geographic regions, such as neighborhoods, or who have very specific lifestyle
and demographic characteristics.
o
It combines geographic, demographic, and lifestyle
segmentation.
·
Benefit and
Usage-Rate Segmentation
o
Benefit: groups
customers into market segments according to the benefits they seek from the
product
o
Usage-rate:
divides a market by the amount of product bought or consumed
o
80/20 principle:
principle holding tat 20% of all customers generate 80% of the demand
·
Bases for
segmenting business markets
o
Company characteristics
o
Geographic location
o
Type of company
o
Company size
o
Product use
o
Purchasing strategies of buyers
o
Influenced by the personal characteristics of buyers
·
Steps in
segmenting a market
o
Selecting a market
or product category for study, Choosing a basis or bases for segmentation, Selecting
segmentation descriptors, Profiling and analyzing segments, Selecting markets, Designing,
implementing, and maintaining appropriate marketing mixes
·
Target Market
o
Group of people or organizations for which an
organization designs, implements, and maintains a marketing mix
o
To meet the needs of that group, resulting in mutually
satisfying exchanges
o
Strategies for
selection
o
Undifferentiated
targeting
o
Concentrated
targeting
o
Multisegment
targeting
·
Target Marketing Strategies
o
Undifferentiated: views the market as one big market with no individual
segments and thus uses a single marketing mix
o
Concentrated: selects one segment of a market for targeting marketing
efforts
o
Multisegment: chooses two or more well-defined market segments and
develops a distinct marketing mix for each
·
Advantages and Disadvantages of Target Marketing Startegies
o
Undifferentiated
targeting strategy
o
Marketers of
commodity products, such as flour and sugar, are likely to use this strategy.
o
Small stores in
small towns with no competition may offer one marketing mix and be successful.
o
Concentrated
targeting strategy
o
Focusing on a
narrow market is sometimes more profitable than spreading resources over
several different segments.
o
It often enables
small firms to compete effectively with much larger firms.
o
However, it can
also be disastrous for a firm that is not successful in its narrowly defined
target market.
o
Multisegment
Targeting Strategy
o
Involving high
cost, since it needs to target on different segments; and each segment may have
different needs
·
Positioning,
Perceptual Mapping, and Repositioning
o
Position is the place a product, brand, or group of products
occupies in consumers’ minds relative to competing offerings.
o
Positioning
assumes that consumers compare products on the basis of important features.
o
Product
differentiation
o
Positioning strategy used by firms to distinguish
their products from those of competitors
o
Effective
positioning requires:
o
Assessing the
positions occupied by competing products.
o
Determining the
important dimensions underlying these positions.
o
Choosing a
position in the market where the marketing efforts will have the greatest
impact.
o
Positioning
(Repositioning) Bases:
o
Attribute:
Association of a product with an attribute, product feature, or customer
benefit
o
Price and quality:
High price as a signal of quality or low price as an indicator of value
o
Use or
application: Stresses on uses or applications
o
Product user:
Focuses on a personality or type of user
o
Product class:
Positioning a product as being associated with a particular category
o
Competitor:
Positioning against competitors is part of any positioning strategy.
o
Emotion: Focuses
on how the product makes customers feel
·
Marketing Research
o
Def: process of
planning, collecting and analyzing data relevant to a marketing decision
o
Descriptive: gathering
and presenting factual statements
o
Diagnostic:
explaining data
o
Predictive:
addressing “what if” questions
·
Process
o
1. Identify and
formulate the problem/opportunity. 2. Plan the research design and gather
secondary data. 3. Specify the sampling procedures. 4. Collect primary data. 5.
Analyze the data. 6. Prepare and present the report. 7. Follow up.
·
Components of a
Marketing Research Project
o
Management
decision problem: broad-based problem that uses marketing research in order for
managers to take proper actions
o
Marketing research
objective: Defines the specific information about which marketing research
problem need to be solved
o
Marketing research
problem: determines what information is needed and how it can be obtained
efficiently and effectively
·
Sources of
Secondary Data
o
Secondary data are
data previously collected for any purpose other than the one at hand. (internal
corporate info, govt agencies, tarde and industry associations, business
periodicals, news media)
·
Big data
o
Today, more and
more firms are using big data tools to catalog customer attributes and
analyze which characteristics they have in common.
o
Big data analytics
focuses on gathering data and learning and adapting based on that data.
·
Primary data
o
Info collected for
the first time
o
Advantages: answer
specific research questions, data are current, source is known, secrecy can be
maintained
·
Secondary data
o
Advantages: save
time and money, aid in formulating the problem statement, suggest research
methods and data to solve problems, serve as basis for comparison
o
Disadvantages: may
not give detailed info, quality and accuracy may pose a problem
·
Observation
Research
o
People watching
people, people watching an activity, machines watching people, machines
watching an activity
o
Mystery
shoppers are researchers posing as
customers who gather observational data about a store.
o
Behavioral
targeting (BT) combines a consumer’s
online activity with psychographic and demographic profiles compiled in
databases.
o
And one-way mirror
observation
·
Ethnographic research
o
Ethnographic
Research
o
Study of human
behavior in its natural context
o
Involves
observation of behavior and physical setting
·
Experiments
o
Used by
researchers to gather primary data
o
Casual
Relationship Testing
o
One or more
variables are altered, and the effects of the alterations are observed on
another variable
·
What is product?
o Everything,
both favorable and unfavorable that a person receives in an exchange
·
What are convenience products, shopping products,
specialty products, and unsought products? What are the characteristics of each
of the above product categories?
o Convenience:
inexpensive items that merit little shopping effort
o Shopping:
require comparison shopping
o Specialty:
particular items for which consumers search extensively and are reluctant to
accept substitues
o Unsought:
products unknown to the potential buyer or known products that aren’t actively
seeked
·
What are product item, product line, and product
mix? Make sure you can give examples for each of the above concepts.
o Item:
specific products from a line. Line: groups of closely related product items.
Mix: All products that the organization sells
·
What are the benefits for forming a product line?
o Advertising,
package uniformity, standardized components, efficient sales and distribution,
equivalent quality
·
What is product line depth?
o The number
of product items in a product line
·
What is product mix width?
o Number of
product lines in an organization
·
What is brand? What is brand name? What is brand
mark?
o Brand:
Name, term symbol or design that identifies a sellers products. Brand name:
part of a brand that can be spoken. Brand mark: elements of a brand that cannot
be spoken
·
What are the three main purposes for branding?
o Product
identification, new product sales, repeat sales
·
What is brand equity? What is global brand? What is
brand loyalty?
o 1. Value of
a company or brand name. 2. Brand that obtains at least one third of its earnings
from outside its home country. 3. Consistent preference for one brand over
others
·
What is co-branding and what are the three
different types of co-branding? Make sure you can give examples for each type.
o Placing two
or more brands on a product. Ingredient, cooperative, complementary
·
Understand the advantages for carrying
manufacturers’ brands and private brands.
o Heavy
consumer ads by manufacturers help build consumer loyalty
o Well-known
manufacturer's brands attract new customers and enhance dealer’s prestige
o Manufacturers
offer rapid delivery, enabling the dealer to carry less inventory
·
What are the functions of packaging?
o Contains
and protects products, Promotes products, Facilitates storage, use, and
convenience of products, Facilitates recycling and reduces environmental damage
·
What are persuasive labeling and informational
labeling?
o 1.
Promotional theme or logo, consumer information is secondary. 2 helps consumers
make proper selections
·
How does product warranty help to enhance consumer
confidence?
o Confirms
the good quality product or service
·
What are the strategies for product adjustments?
o Modification,
repositioning, line extension, contraction
·
Why companies need to make product adjustments?
·
What is product obsolescence?
o Practice of
modifying products so those that have already been sold become obsolete before
they actually need replacement
·
How does repositioning strategy help to make the
product adjustment?
o Changes
consumers perceptions of the brand
·
What is Product Line Extension? When can product
lines be overextended?
o 1. Adding
additional products to an existing product line. 2. Products do not contribute
to profits, items in line are obsolete
·
What is Product Line Contraction? What are the
benefits from this strategy?
o 1.
Contracting product lines is a strategic way to deal with over extension. 2. Resources
become concentrated on the most important products, Managers do not waste
resources trying to improve the sales and profits of poorly performing products,
New-product items have a
chance of being successful owing to availability of financial and human
resources
·
New products
o Important to sustain growth, increase revenues and
profits, and replace obsolete items
o Categories
of new products
o New-to-the-world
o New product
lines
o Product
line additions
o Improvements or revisions
o Repositioned products
o Lower-priced products
·
New product strategy
o Plan that
links the new-product development process with the objectives of the:
o Marketing
department
o Business
unit
o Corporation
o Sharpens the focus and provides general guidelines
for generating, screening, and evaluating new-product ideas
·
Idea generation
o Sources of
new-product ideas
o Customers
o Employees
o Distributors
o Competitors
o Research
and development
o Consultants
o Other
experts
·
Idea screening and concept test
o Screening: First filter in the product development process
o Eliminates ideas that are inconsistent with the
organization’s new-product strategy or are inappropriate for some other reason
o Concept
test: Test to evaluate a
new-product idea, usually before any prototype has been created
·
Considerations in busness analysis stage
o Demand,
cost, sales, profitability
·
Development
o Stage in the product development process that
includes:
o Developing a prototype
o Sketching a marketing strategy
o Deciding on packaging, branding, and labelling
o Mapping out promotion, price, and distribution
strategy
o Examining manufacturing feasibility
·
Simultaneous product development
o The development process works best when all the
involved areas work together rather than sequentially.
o Marketing, R&D, engineering, production, and
suppliers
o Team-oriented approach to new-product development
o Test marketing: Limited introduction of a product and a marketing program to determine
the reactions of potential customers in a market situation
·
Costs of test marketing
o Often takes
one year or more
o Can cost
over $1 million
o Exposes the
new product to competitors
o Competitors
can jam testing programs with their own promotions
·
Commercialization
o Decision to market a product involves:
o Ordering
production materials and equipment
o Starting
production
o Building
inventories
o Shipping
the product to field distribution points
o Training
the sales force
·
Reasons for product failure
o No
discernible benefit compared to existing products
o Poor match
between product features and customer desires
o Overestimation
of market size
o Incorrect targeting
o Too high or
too low prices
o Inadequate
distribution
·
Diffusion
o Process by which the adoption of an innovation
spreads
o Innovation: Product
perceived as new by a potential adopter
o Categories
of innovators
o Innovators
– 2.5%
o Early
adopters – 13.5%
o Early
majority –34%
o Late
majority – 34%
o Laggards –
16%
·
Product characteristics and the rate of adoption
o Five
product characteristics can be used to predict and explain the rate of
acceptance and diffusion of a new product:
o Complexity - The more complex the product, the
slower is its diffusion.
o Compatibility - Incompatible products diffuse
more slowly than compatible products.
o Relative advantage - The degree to which a
product is perceived as superior to existing substitutes.
o Observability - The degree to which the
benefits or other results of using the products can be observed by others and
communicated to target customers.
o Trialability - The degree to which a product
can be tried on a limited basis.
·
Product life cycle
o The product
life cycle (PLC) is a widely familiar concept in marketing and is
considered a useful marketing management tool. However, some critics have
challenged the theoretical basis and managerial value of the PLC.
o The product
life cycle traces the stages of a product’s acceptance from its introduction to
its decline.
o The PLC
concept can be used to analyze a brand, a product form, or a product
category.
·
No comments:
Post a Comment