mt 219 marketing unit four segmentation and targeting product, branding, and packaging note: this...

MT 219 Marketing Unit Four

Segmentation and Targeting

Product, Branding, and Packaging

Note: This seminar will be recorded by the instructor.

Review of Unit 3

• How did Unit 3 go? Questions or concerns?

• Instructor suggestions for Unit 4- Pay particular attention to segmentation for the Unit 7 Research Project

• Success Tip: Turn in all of your assignments, even if they are late! While there are penalties for submitting late work, it is better to get some credit rather than none at all!

Consumer Markets

Individuals who purchase with the intent to consume or directly benefit from the purchased product.

Product is not intended for resale or use in a manufactured product.

Different from business markets where the product is used to produce goods or services in some way.

Target Market Segmentation

1. Identify appropriate strategy

2. Determine segmentation variables

3. Develop segment variables

4. Evaluate segments

5. Select specific segments

Basic Process: Heterogeneous Market Segmentation Homogeneous Sub-Markets

Major Segmentation Strategies

• Undifferentiated – single product and single strategy for entire market – requires homogeneous market. Broadly based segment- most of the population.

• Concentrated – Single segment , one strategymajor advantages include specialization and the ability to competemajor disadvantage – “all eggs in one basket”

• Differentiated – two or more segments each with its own marketing mixmajor advantages include potentially higher sales and absorption of excess production capacityMajor disadvantage is cost

Criteria for Effective Segmentation

1. Large enough with profit potential

2. Heterogeneous need for most products

3. Segments must be identifiable and divisible

4. Segments must be reachable

5. Segments should be open to comparison

Segmentation Variable – Which to use?

• Variable should be related to needs• Variable must be measurable• Company resources and capabilities must be

considered

Demographic Variables – closely related to needs and measurable

• Age• Gender• Race• Ethnicity• Income• Education

• Occupation• Family size• Family life cycle• Religion• Social class• Sexual orientation

Geographic Variable

• Climate• Terrain• City size• Urban/rural values• Market Density• Geo-demographic Segmentation• Micromarketing

Psychographic Variables

• Personality• Motivation• Lifestyle

- Activities

- Interests

- Opinions

Benefit Segmentation Variables

• Most Powerful Variables• Underlies all other segmentation variables• These relate most directly to consumer desires• How the product benefits the consumer directly

What is a Product?

Anything that is offered to a market to fulfill a need or want

good

service

idea

place

person

Classifying Consumer Products

• Convenience – relatively inexpensive, frequently purchased items with many substitutes. Don’t confuse with a convenience store.

• Shopping – items for which buyers are willing to spend considerable effort to compare and purchase. Don’t confuse with what you buy when just shopping

• Specialty - products with unique characteristics for which consumers are willing to expend effort

• Unsought – items people do not think about buying. Many times due to emergency needs. Also, many impulse items.

Product Line and Mix Concepts

• Product line – group of closely related items

• Product item – specific version of product

• Product mix – total group of products made by company. Think about Proctor and Gamble.

• Product mix width – total number of lines offered. Think of different types of Dove.

• Product Mix depth – average number of different items offered in each line. Think shampoos

Product Life Cycle Characteristics

• Introduction – sales begin at zero, profits negative• Growth – sales rise rapidly, profits peak• Maturity – sales peak and start to decline as profits fall• Decline – sales fall rapidly

Marketing Objectives at each stage

• Introduction – build awareness, trial, and distribution• Growth – establish unique selling proposition;

differentiate• Maturity – hold share, consumer loyalty• Decline – depends on which strategy is chosen

Adoption – individual process

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption

Adopter Categories - diffusion

• Innovators• Early Adopters• Early Majority• Late Majority• Laggards

• One Note: You can fall into different categories depending on the product we are talking about.

Branding - definitions

• Brand – identifying name, term, design, or symbol• Brand Name – part of brand that can be spoken• Brand Mark – part of brand that is non verbal• Trademark – legal and exclusive use of brand

Brand Equity

The marketing and financial value associated with a brand’s strength in a market

brand name awarenessbrand loyaltyperceived brand qualitybrand associations

Levels of Brand Loyalty

• Brand recognition• Brand preference• Brand insistence

Types of Brands

• Manufacturer’s brands• Private distributor brands• Generic brands• Family brands• Individual brands

Selecting a Brand Name

• Easy to pronounce, spell and remember• Can be Trademarked• Distinctive• Conveys brand benefits• Travels globally- Big concern today

Brand extensions – use of existing brand on a new category

Co-Branding – using two or more brands on one products

Brand licensing – giving permission to another company to use its brand on other products for a fee. Franchising does this.

Packaging Functions

• Product protection and form maintenance• Provide convenience to customers• Promotional role• Legal requirements• Security

Any Questions?

Thank you for attending!

See you next week!

Instructor will post the link to the recording of tonight’s seminar in the course Announcements.