Marketing Mix 4ps

Product What is the product Detail what does it do How does it appeal to your target market Jack in the Box

Price How much do you charge for the product or how much does it cost? Coke a Cola

Place Where are you going to sell is so it will be seen? End caps

Promotion How are you going to promote it? AARP Life Alert Above the influence commercials

Target Market Group of people your sales are targeted toward.

http://www.youtube.com/watch?v=JIirzTdaey4 4ps

Market Segmentation

Mass-marketing A strategy that presumes there is one undifferentiated market and that one product will appeal to all consumers in that market. What is “mass marketing?” Examples of mass-marketed products? The Model-T Ford, which was offered “in any color they wanted, as long as it was black.” Coca-Cola (before the classic coke fiasco, and now “cherry coke” etc.)

One advertising campaign is needed One marketing strategy is developed Advantages Lower cost One advertising campaign is needed One marketing strategy is developed Usually only one standardized product is developed What huge advantage does it have over other types of marketing?

Disadvantage It only works if all consumers have the same needs, wants, desires, and the same background, education and experience What’s the drawback of mass marketing?

Market segmentation The process of dividing a market into distinct subsets (segments) of consumers with common needs or characteristics and selecting one or more to target with a distinct marketing mix What is Market Segmentation? What do we mean by “segment”?

Segmentation Variables Geographic Demographic Psychographic Behavioral They are the many possible “variables” into which you can divide a market. Your text identifies five: We’ll look at each of these in a moment

Geographic Segmentation Division of the market based on the location of the target market People living in the same area have similar needs and wants that differ from those living in other areas Climate Population density Taste Micromarketing What is it? What is the theory behind it? Examples? Climate: snowblowers/Subaru Outbacks vs. sunscreen/convertibles Population Density: lawn mowers/gas grills vs. small appliances/convertible sofas Taste: mild salsa sells best in the northeast while hot salsa is preferred in the west A concept related to this issue is Micromarketing: Campbell Soup segments its domestic market into 20 different segments; each regional sales office has its own budget and authority to develop specific advertising and promotional campaigns geared to local market needs and conditions

Demographic Segmentation Partitioning of the market based on factors such as age gender marital status income occupation education ethnicity What is it? Let’s look at some of these demographic variables…

Age Product needs and interests often vary with consumers’ age Why is age a logical segmentation variable? Examples? Children are going to be interested in toys and games Teens are going to be interested in clothing People in their 50’s are more likely to be concerned with issues like health care and retirement, etc., than those in their 20’s Demographers have identified two different underlying forces related to chronological age…

Gender Gender is frequently a distinguishing variable Changes in the family and growth of the dual-income household have blurred some of the lines Another distinguishing variable is… Examples? Hair products, cosmetics, clothing However… Examples of how things are different now? Women are buying more household repair tools Men have become significant purchasers of skin care and hair products

Marital Status Marketers have identified specific marital status groups, such as: Singles Divorced individuals Single parents Dual-income married couples They then market products specifically designed for one or more groups What kinds of products might appeal to the first three groups? Single-serving prepared foods, two-cup coffee makers, etc. for singles and divorced individuals How about the fourth? More expensive convenience foods

Income, Education & Occupation These three variables are often related and therefore often used together as a measure of one’s social class. Income is commonly used because marketers feel it is a strong indicator of ability to pay for a particular product or service Income is often combined with other variables to narrow target markets: With age to identify the important affluent elderly With age and occupation to produce the yuppie segment Why do you suppose these three variables are combined? Cuz they go together! As we’ll see in a later chapter…

Psychographic Segmentation market based on lifestyle and personality characteristics What is it?

Examples of the use of psychographic segmentation reflected in marketing messages Kellogg’s targets health-conscious consumers with brands such as Special K and Product 19 Old Spice is targeting the active sports lifestyle with High Endurance deodorant Other examples? Nissan Xterra clearly appeals to the same “active” consumer

Behavioral Segmentation market based on attitudes toward or reactions to a product and to its promotional appeals Another segmentation variable is… What is it?

Behavioral segmentation can be done on the basis of: Usage rate Benefits sought from a product Loyalty to a brand or a store What do these things mean?

1. Usage Rate Differentiates between heavy users medium users light users nonusers Targeting those heavy users is a common marketing strategy Why is this important? Because… (heavy users) For example, 25-35% of beer drinkers account for 70% of consumption

2. Benefit Segmentation Marketers constantly attempt to identify the single most important benefit of their product that will be the most meaningful to consumers Changing lifestyles play a major role in determining the product benefits that are important to consumers and also provide marketers with opportunities for new products and services For example, microwave ovens for the dual-income family (speed and convenience) Financial Security (Met Life) Comfort (Bausch & Lomb disposable contact lenses) Good health (egg beaters egg substitute) Backache relief (Advil, etc.)

3. Brand and Store Loyalty The tendency of some consumers to repeatedly select the same brand within a given product category A parallel tendency of some consumers to repeatedly patronize a particular retail establishment Marketers reward brand loyalty by offering special benefits to frequent customers What is brand loyalty? What is store loyalty?