Product mix
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There are four basic types of opportunities for organizations: market penetration, market development, product development, and diversification. Marketing strategy involves market segmentation, targeting, positioning, and developing the right marketing mix. Segmentation involves dividing the market into distinct groups based on characteristics and behaviors. Targeting selects which segments to focus on. Positioning determines how the product is viewed relative to competitors. The marketing mix consists of the product, price, place, and promotion tools used to appeal to the target market.
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. MARKETING STRATEGY MASS MARKET MULTISEGMENT CONCENTRATION STRATEGY STRATEGY STRATEGY Organization’s Organization’s Organization’s Single Several Single Marketing Mix Marketing Mixes Marketing Mix A D F Segment Segment Segment Segment Mass Market A B C D E F A B C D E
- 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 1 2 3 4 5 6 Determine Define overall Identify Evaluate desired product market distinguishing Describe approaches for Select target positioning and in which characteristics segments potential & market then develop company of segments or likely success marketing mix operates bases for to achieve segmentation desired position
- 11. Bases for Segmentation Demographics Geographic Psychographics & Lifestyles Behavioral Segmentation
- 12. Segmentation Variables Geographics Nation/Region State/Region Age City/Neighborhood Gender Climate/Population Income density Market density Buying Power Psychographics Demographics Expenditure patterns Potential Occupation Personality Consumer Education Lifestyle Segments Race or nationality Family life cycle Decisions Social class Amount of usage Type of usage Brand loyalty Behavioral
- 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 • Lower classes – Plan and save for the future – Live for the present – Analyze alternatives – Have simplistic ideas about – Understand how the how things work world works – Feel controlled by the world – Feel they have opportunities – Want help with decision – Willing to take risks making – Confident about decision – Want short-run satisfaction making – Want long-run quality or value
Editor's Notes
- #4: 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.
- #5: 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?
- #7: 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
- #8: 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.