Fundamental MARCOM Decisions Chapter 4 Shimp 7th Edition Targeting, Positioning, Objective Setting

Major Components of the Marketing Plan Situation Analysis Problems and Opportunities Marketing Objectives Marketing Strategies Implementation Evaluation

The Situational Analysis Internal Considerations Product PLC, BCG Promotion Mix, slogans Distribution strategy Price Skimming, penetration

Situational Analysis External Considerations Marketplace Competition Consumers Demand Environment

Hierarchy of Marcom Effects Sales Promotion Advertising and PR Advertising

Marketing Communications All marketing communications should be directed towards a 1) target market, 2) clearly positioned, 3) created to achieve a specific objective, and 4) taken to accomplish the objectives within the budget constraints Seems simple, huh?

Targeting and Segmentation Segmentation enables the marketer to break the general marketplace into cohesive subsets (segments) Targeting is the process by which the marketer determines which segments to pursue Consumer characteristics such as behavioristics, psychographics, geodemographics and demographics help us understand what we will consume and how we will respond to marketing communications

Marketing Segmentation Identifying groups of people with shared characteristics within the broad markets for consumer or business products aggregating these groups into larger segments according to their mutual interest in the product’s utility

Segmentation Variables Demographics* age, income, sex, family size Geodemographics regions, climate, density Psychographics AIO Behaviorgraphic benefits sought, usage rates, purchase occasion *increasingly hard to measure but more predictive

Behaviorgraphics and Psychographics Targeting based on the way people behave Best data to have, but not always available Psychographics Targeting based on lifestyle and attitudes Values, motivations, and lifestyles as they relate to buying behavior

VALS Innovator – successful, sophisticated, take charge people exhibit all three motivators; niche, upscale buyers Ideals Motivated Thinkers - 11% ; avg age 48, mature, satisfied, comfortable, responsible, educated, healthful products purchasers. Seek durability and functionality, yet financially able to consider many choices Believers - 16%; avg age 58; conservative, predictable, conventional, buy American products, loyal consumers

VALS Achievement Motivated Achievers - 13%; avg age 36, successful, work and goal oriented, satisfaction from families and jobs. Lifestyle structured around family and value consensus and stability over risk. Purchase prestige products and services, time saving goods Strivers - 13%; avg age 34 fewer resources, trendy and fun loving consumers, that seek approval. Money defines their choices and not enough to fund! Impulsive within limits

VALS (cont’d) Self Expression Oriented Experiencers (12%); avg age 26, high energy levels, exercisers, socialites! Young, enthusiastic, impulsive shoppers. Buy clothes and food, want to look good and have fun! Makers (13%); avg age 30; practical, self sufficient, focus on family, work, physical recreation, don’t seek new and different Survivors Strugglers (14%) avg age 61; lowest incomes, not consumer oriented, seek safety and security Actualizers (8%) avg age 43, highest incomes, resources, and high self esteem

Demographics/Geodemos Monitoring demo shifts can assist with identifying segments forecasting of sales assisting with media planning Minimizing wasted coverage Geographic Dispersion Population relocating to South and West from Northeast and Midwest 70% growth to come in these regions

Criteria For Usable Segments Sufficient Size Large enough to profit? Measurability Identify the group with characteristics such as demos Accessibility Responsiveness Durability

Population Growth Relatively slow population growth in U.S. World population to grow from 5 to 8 billion in 2025 China and India combined have 2.2 billion compared to the U.S. at 300 million Role of China in World Economy - UPS

Changing Age Structures Baby Boomers 1946-1964 - birth of 77 million Americans created a mini baby boom increase in # kids <10 preteens, teenagers and young adults declined epicenter of society - but are aging not a true market segment - merely share age range Middle Agers (35-54 years old) Nearly 85 million as of 2005 Mature Consumers 55 and older quality and service > price Highest discretionary income and accumulated assets

Middle Agers 35-54 not psychologically old! Exercise equipment, personal care items, skin care Will spend money on grown up toys Plastic surgeons?

Mature Consumer Segment Communication Techniques?? Olders 55-59 60-64 Elders 65-69 70-74 The Very Old 75-79 80-84 85 and older Average Age 1985 31.4 2000 35.5 2025 38

Mature Consumers 65 and over have the highest discretionary income 12.6% of the population or 36 million in 2005 Ads portray them as vital and active targeting products such as Viagra Internet and computers Not a homogeneous group! Healthy hermits, ailing out goers, frail recluses, healthy indulgers

Changing Age Structures Children 4-12 Preschoolers – 6.7% often play an Elementary aged – 6.6% influential role 6-11 in decision making Tweens (8-12 yrs old) – 7.2% Teenagers Generation Y (1982-1994) substantial influence conformist, narcissistic and fickle Young Adults Generation X ( 1961-1981 ) Baby busters Yup and Comers, Bystanders, Playboys, Drifters

Changing Households - Trends Growth of nontraditional Households 40% + population unmarried 35 million nonfamily households Singles have very different buying needs example: Stouffers New Women’s Roles 70% working – changing retailing options traditional strategies for advertisers declining

New Roles for Women Stereotypes wife, homemaker, sexy # in workforce growing dramatically; 70% 25-54 staying single longer Increasing diversity of roles – 1st woman President of Harvard

Ethnic Population Developments African-Americans 12-13% population not a single market growing market, young market, geographically concentrated, prestige buyers Hispanic-American Spanish speaking 12-15% market Geographically more mobile Asian-Americans higher incomes, growing, considerable differences, most prestigious jobs, 50% linguistically isolated 4% market

Product and Brand Differentiation Perceptible Differences - unique taste, features, quality Hidden Differences - ingredients (i.e., natural vs. artificial chemicals, use of recyclables, etc.) Induced Differences - branding the #1 tool!

Brand Positioning Create a specific meaning for the brand and have that “stick” in the mind of the consumer Brand meaning is formed and retained “in comparison” to competing products (brands)

Positioning Positioning by Attribute Positioning by Price and Quality Positioning by Usage Imagery SUV and ruggedness Jeep Grand Cherokee and agility Positioning by User Imagery Type of individual that uses the product Can use celebrities or man on the street Positioning by Brand Benefits Functional, experiential (sensory) and symbolic (belongingness) needs

Repositioning How to you change a negative perception, revitalize, target new consumer groups? Camel, Oil of Olay, Arm and Hammer Identify problems in consumers’ minds (perceptual maps), address communication, packaging, package issues

Consumer Processing Model/Hedonic, Experiential Model Exposure Attention Avoid selectivity Comprehension/Miscomprehension Agreement with Comprehended information Retention/Search/Retrieval HEM - Feelers Subjective symbols that precipitate feelings (fun, status, memories)