I can’t wait to go!!!. Marketing – SM122 Product.
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Transcript of I can’t wait to go!!!. Marketing – SM122 Product.
I can’t wait to go!!!
Marketing – SM122
Product
Consumers Have Different NeedsMarket: Aggregate of people who,
as individuals or as organizations, have needs for products in a product class and who have the ability, willingness, and authority to purchase such products
Segment: Group of individuals, groups, or organizations that share one or more similar characteristics which make them have relatively similar products needs and have high probability of responding to a similar marketing mix
Segmentation: Process of identifying segments or groups of people / organizations that exist within the larger market
How to Segment Consumer Markets
CommonBases for
SegmentingMarkets
Geographic
Psychographic
De
mo
gra
ph
icBe
hav
iora
l /P
rod
uc
t U
sa
ge
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
All Four P’s Contribute to the Whole
ProductProduct
PricePrice
PlacePlace
PromotionPromotion
Selectionof TargetMarket
Selectionof TargetMarket
Position
Approaches to Serving MarketsApproaches to Serving Markets
Approach
Mass Marketing A single marketing mix for the entire market
Segmentmarketing
Description Examples
Individualmarketing
Commodity products
A single marketing mix for one segment of the market (Concentrated Marketing)
Women's Workout World (exercise facilities for women); American Association for Retired Persons (lobbying and membership services for people over 50)
McDonald’s (Happy Meals for young children, Big Macs for Teens, Arch Deluxe for adults); Toshiba copiers (several sizes and features to meet different levels of business needs)
Personalized amenities for repeat guests at Ritz-Carlton hotels; management consulting services tailored to an organization’s needs
A marketing mix customized for an individual or organization
Separate marketing mixes for two or more segments of the market (Multisegment Marketing)
Consumers Buy Benefits Not Features
•Consumers buy:•Consistency, convenience
McDonald’s•Fun, hip, cool
Reef Flip - Flops, Pacific Sunwear of CA•Aspirational, escape, illusion
Jimmy Buffet, Grateful Dead, Jaguar, Maxim, Cosmopolitan•Cleanliness, brightness, freshness
Tide Detergent•Timeliness, safety
SwissAir, Airport Security
Product
The good or service that is offered has basic functionality and features. It may be offered in one or multiple varieties.
But, not just the good or service you offer, but a much broader definition to include warranties, after-sales service, installation, image,
Products are Goods and Services
GoodGoodServiceService
PureService
PureGood
G
S
S
GG
Product LevelsProduct Levels
Core BenefitOr
Service
BrandName
Quality
Packaging& Labeling
Styling
Features
Delivery& Credit
Installation
Warranty
After-Sale
Service
Actual/Expected ProductActual/Expected Product Core/Generic ProductCore/Generic Product
Augmented ProductAugmented Product
Classification of Consumer Goods
Toothpaste,cake mix, handsoap, laundrydetergent
Relativelyinexpensive
Widespread;many outlets
Price,availability,and awarenessstressed
Convenience Shopping Specialty Unsought
Type of Consumer GoodBasis ofcomparison
Product
Price
Place
Promotion
Cameras, TV’sbriefcases,appliances,clothing
Fairlyexpensive
Large numberof selectiveoutlets
Differentiationfromcompetitorsstressed
Rolls Roycecars,Rolex watches
Usually veryexpensive
Very limited
Uniqueness ofbrand andstatus stressed
Burialinsurance,thesaurus
Varies
Often limited
Awareness isessential
Classification of Consumer Goods
Aware ofbrand, but willacceptsubstitutes
Frequentpurchases; little time andeffort spentshopping;routinedecision
Convenience Shopping Specialty Unsought
Type of Consumer GoodBasis ofcomparison
Brand loyaltyof consumers
Purchasebehavior ofconsumers
Prefer specificbrands, butwill acceptsubstitutes
Infrequentpurchases;comparisonshopping;uses decisiontime
Very brandloyal; will notacceptsubstitutes
Infrequentpurchases;extensive timespent to decideand get theitem
Will acceptsubstitutes
Very infrequentpurchases;somecomparisonshopping
Diffusion or
Why does everyone have (will have) an MP3 player.
Time (t)
Cumulative Probability of
Adoption up to Time t
F(t)
Introduction of product
1.0
What happens when everybody that is going to acquire a product has it?
From a presentation given by Professor David Berkowitz
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
Consumer Life CycleConsumer Life CycleSlide9-5
Figure9.2
Innovators(2.5%)
EarlyAdopters(13.5%)
EarlyMajority
(34%)
LateMajority
(34%)
Laggards(16%)
F(t)
1.0
St = p * Remaining + q * Adopters Potential
Innovation Imitation Effect Effect
Bass Model of Product Diffusion
where:
St = sales at time t
p = “coefficient of innovation”
q = “coefficient of imitation”
# Adopters = S0 + S1 + • • • + St–1
Remaining = Total Potential – # AdoptersPotential
From a presentation given by Professor David Berkowitz
Examples of Innovation and Imitation Parameters
Innovation ImitationProduct/ parameter
parameter Technology (p) (q)
B&W TV 0.028 0.25Color TV 0.005 0.84Air conditioners 0.010 0.42Clothes dryers 0.017 0.36Water softeners 0.018 0.30Record players 0.025 0.65Cellular telephones 0.004 1.76Steam irons 0.029 0.33Motels 0.007 0.36McDonalds fast food 0.018 0.54Hybrid corn 0.039 1.01Electric blankets 0.006 0.24
A study by Sultan, Farley, and Lehmann in 1990 suggests an average value of 0.03 for p and an average value of 0.38 for q.From a presentation given by Professor David Berkowitz
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
The Product Life CycleThe Product Life Cycle
Slide
9.1
Dollars Total Market SalesTotal Market Profits
Time
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
Factors affecting the rate of diffusion
Product-related – diffusion will be faster if… High relative advantage over existing products High degree of compatibility with existing approaches Low complexity Can be tried on a limited basis Benefits are observable
Market-related – diffusion is influenced by … Type of innovation adoption decision (eg, does it involve
switching from familiar way of doing things?) Communication channels used Nature of “links” among market participants Nature and effect of promotional efforts
From a presentation given by Professor David Berkowitz
Product Life Cycle for Wine Coolers
Source: Figure drawn from Wine and Liquor Handbook statistics
Mil
lion
s of
dol
lars
$1500
$1000
$500
1990
1991
1992
1993
1994
1995
1989
1984
1985
1986
1987
1988
1983
1982
Recording Industry Product Form Life Cycles
Source: Figure drawn from Recording Industry Association of America statistics.
Mil
lion
s of
uni
ts s
old
650600550500450400350300250200150100500
1989
1991
1993
1995
1987
1977
1979
1981
1983
1985
1975
1973
Vinyl
Cassettes
Compactdisks
How stages of the product life cycle relate to marketing mix decisions
Marketing objective
Marketing objective
Gain Awareness
Gain Awareness
Stress differentiation
Stress differentiation
Maintain brand loyalty
Maintain brand loyalty
Harvesting, deletion
Harvesting, deletion
CompetitionCompetition NoneNone GrowingGrowing ManyMany ReducedReduced
ProductProduct OneOne More versionsMore versions Full product line
Full product line Best sellersBest sellers
PricePrice Skimming or penetration
Skimming or penetration Gain share, dealGain share, deal Defend share,
profitDefend share, profit Stay profitableStay profitable
PromotionPromotion Inform, educateInform, educate Stress competitive differences
Stress competitive differences
Reminder oriented
Reminder oriented Minimal
promotionMinimal promotion
Place(distribution)
Place(distribution) LimitedLimited More outletsMore outlets Maximum
outletsMaximum outlets Fewer outletsFewer outlets
Stage of the product life cycleSa
les
reve
nue
or p
rofi
t Introduction Growth Maturity Decline
+0–
Total industrysales revenue
Total industry profit