Marketing Concepts

Workbook – DO NOW

• Page 254 – Tesco is Market leader in Thailand.

• Question 1,2,3 (15 mins)

Adding Value

• Marketing is the added value on most products, the customers will pay for something the perceive is of better quality.

How Companies Add Value

• Retail environment improvements i.e. a beauty salon or hairdresser needs to make the customer feel welcome, magazines, comfortable waiting area, TV etc

• Packaging creates a POD i.e. Chocolate• Promotion must have brand

Ie Coke, Levis• Create a USP – differentiates your

product from competitors.

USP + Product Differentiation

• USP – the feature of the product that differentiates it from the competitor.

• Product Differentiation – Making the product stand out from competitors in the consumers perception.

Golf Club and Weedwacker

Sink Water Fountain

Mass Marketing

• Selling product to the whole market without targeting anyone specifically.

• This isn't very common as it means there is no real direction for your product line.

• What Companies would you consider use mass marketing?

Advantages of Mass Marketing

• Small Market Niches don’t allow economies of scale to be achieved. Mass Marketing firms will have lower costs of production.

• Mass Market strategies run fewer risks than Niche Market. Ie if tastes and preferences change in your niche this can result in a loss of sales.

Niche Marketing

• Identifying and exploiting a small segment of a larger market by developing products to suit it.

• What companies might use Niche Marketing as there approach?

Advantages of Niche Marketing

• Small Firms can survive and thrive in markets that are dominated by large firms.

• Sometimes you can make high profits because of a lack of competitors within the market.

• Niche market products can be used by large firms to create status and image that their mass market products lack.

Market Segmentation

• Market segment – A sub group of consumers within a market in which consumers have similar characteristics.

• Market Segmentation – identifying different segments within a market and targeting different products or services to them.

• This approach is very normal within the business world, it requires businesses really understanding consumers and the groups within there market.

Market Segmentation

• What Segments of the market are the following products targeted at?

Market Segmentation

• Marketers need to identify different consumer groups that are most likely to buy there products.

• This leads to a consumer profile, so the marketing can be more effective in terms of promotion, design and price.

• Consumer profiles include – age, income level, location, gender and social class.

Market Segmentation

• There are three commonly used basis for segmentation

• Geographic Differences

• Demographic Differences

• Psychographic Differences

Geographic differences

• Consumer tastes may vary between different areas so it may be appropriate to offer different products and market them in location specific ways.

• Different countries have different cultures so some forms of advertising are not going to be acceptable in different countries.

• Before entering a new market extensive research needs to be done to avoid a loss of sales from a disrespect of local laws or culture.

Examples

• Frank Perdue's chicken slogan, "it takes a strong man to make a tender chicken" was translated into Spanish as "it takes an aroused man to make a chicken affectionate".

• The Coca-Cola name in China was first read as "Ke-kou-ke-la", meaning "Bite the wax tadpole" or "female horse stuffed with wax", depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent "ko-ou-ko-le", translating into "happiness in the mouth".

Examples

• We all know about GM's Chevy Nova meaning "it won't go" in Spanish markets, but did you know that Ford had a similar problem in Brazil with the Pinto? Pinto was Brazilian slang for " tiny male genitals". Ford renamed the automobile Corcel, meaning "horse".

Demographic Differences

• The most common use for segmentation.• Demography is the study of the population data, and

identifies the following characteristics.-Age-Income-Sex-Religion-Ethnicity- Social Class

• This helps organizations become more effective with there marketing.

Demographic Differences

• Socio economic groups or social class include – Upper Middle class, Middle Class, Lower Middle class, working class.

• Your class often determines what you would spend your income on, so the higher the class the more likely to spend money on luxury goods.

Class System

• Identify two products that each different class might buy.

- Upper Class

- Middle Class

- Lower Middle Class

- Working Class

Acronyms for different Groups

• DINKY – double income no kids yet• NILK – no income lots of kids• WOOF – well off older folk• SIN BAD – Single Income, No Boyfriend and Absolutely

Desperate • GLAM – Greying, Leisured, Affluent, Middle-aged • YUPPIE – Young Urban Professional

Psychographic factors

• Differences in consumers lifestyles, personalities, values and attitudes. These can be influenced by the consumers social class.

• I.e. consumers different attitudes to ethical business, private education and organic food

Psychographic Factors

• How Might your Life Style affect your purchasing decisions?

• What about your personality?