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Product mix
- 1. Four Basic Types of Opportunities
- 2. Examples of Different Types of Opportunities • Market Penetration – Arm & Hammer promotes new uses of its baking soda • Market Development – Marriott Hotels target families for weekend to rent rooms filled by business travelers during the week • Product Development – Microsoft develops a new version of its Windows operating system to appeal to the people who bought an earlier version but now want more features • Diversification – Reliance entering in to Telecom
- 3. Marketing Strategy and the Marketing Mix
- 4. Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
- 5. Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer Marketing mix is the set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market
- 7. MASS MARKET STRATEGY MULTISEGMENT STRATEGY CONCENTRATION STRATEGY Organization’s Single Marketing Mix Mass Market Organization’s Single Marketing Mix Segment A B C D E Organization’s Several Marketing Mixes A D F Segment Segment Segment A B C D E F MARKETING STRATEGY
- 8. Target Markets Targeting: Selecting which segments in a market are appropriate to focus on and designing the means of reaching them.
- 9. Criteria for Effective Segmentation 1. Measurability 2. Accessibility 3. Durability 4. Differential Responsiveness
- 10. Stages in Developing Market Segmentation Strategies Develop a market segmentation strategy Define overall product market in which company operates Identify distinguishing characteristics of segments or bases for segmentation Describe segments Evaluate approaches for potential & likely success Select target market Determine desired positioning and then develop marketing mix to achieve desired position 1 2 3 4 5 6
- 11. Bases for Segmentation Demographics Geographic Psychographics & Lifestyles Behavioral Segmentation
- 12. Behavioral Geographics Demographics Psychographics Personality Lifestyle Age Gender Income Buying Power Expenditure patterns Occupation Education Race or nationality Family life cycle Social class Decisions Amount of usage Type of usage Brand loyalty Nation/Region State/Region City/Neighborhood Climate/Population density Market density Segmentation Variables Potential Consumer Segments
- 13. Demographic Dimensions • Important operational dimensions for understanding market segments and developing marketing mixes – Much good data is available • Important for determining size of consumer target markets – Is the market substantial? • Seeing demographic trends helps identify opportunities – Shifts in age distribution – Geographic growth/decline
- 14. Income Distribution • Growth in real income has slowed down • Higher income groups still have much of the spending power • DISPOSABLE INCOME – Income that is left after taxes • DISCRETIONARY INCOME – What is left of disposable income after paying for "necessities"
- 15. Characteristics and Attitudes of Middle and Lower Classes • Middle classes – Plan and save for the future – Analyze alternatives – Understand how the world works – Feel they have opportunities – Willing to take risks – Confident about decision making – Want long-run quality or value • Lower classes – Live for the present – Have simplistic ideas about how things work – Feel controlled by the world – Want help with decision making – Want short-run satisfaction
Editor's Notes
- Note to InstructorConsumers stand in the center. The goal is to create value for customers and build profitable customer relationships. Next comes marketing strategy—the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). It identifies the total market, then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying the customers in these segments. Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control—product, price, place, and promotion (the four Ps). To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.
- Note to InstructorThis link goes to the nike.com site. Explore with the students the different segments including gender Nike Women, psychographics (sports centric including football), and age. Discussion Questions (can include the topic of positioning which is on the following slide).Specific questions for the students:How does Nike segment their market?What appears to be their most important segments?How does Nike position their products in the marketplace?
- Note to InstructorIt is interesting to ask how to make the 4Ps more customer centric? This leads to a redefining of the 4Ps to the 4Cs as follows:Product—Customer solutionPrice—Customer costPlace—ConveniencePromotion—Communication
- Q/A (p.150)Discuss a single standardized global strategy vs. Customized marketing strategyStandardized global strategy – can cause a firm to miss important target markets or to position products inappropriatelyCustomized marketing strategy – only to individual countries may result in a firm’s losing either potential economies of scale or opportunities for exploiting product ideas on a wider scale.