Principles of Marketing Lecture-4

Today’s Topics

Class Communication Indi Head rolls ! Indi Head rolls !

Attendance Attendance Quiz results Quiz results Do examples to clarify Do examples to clarify Discuss project report Discuss project report Market Segmentation and Target Markets Market Segmentation and Target Markets Road Map

Quiz Answers

Examples of GOST Mission Mission Goals and Objectives Goals and Objectives Strategies and Tactics Strategies and Tactics

Mission: Be independent Goal 1: Be independent in transport Goal 1: Be independent in transport Strategy: Ability to travel alone Strategy: Ability to travel alone Objective 1: Buy a car by end of 2007 Objective 1: Buy a car by end of 2007 Objective 2: Get a driver’s license Objective 2: Get a driver’s license Objective 3: Find at least 2 means of local transport that fits my needs Objective 3: Find at least 2 means of local transport that fits my needs Tactics: Tactics: Save Rs.5000 every month to buy a car Save Rs.5000 every month to buy a car Search at least 12 classified ads every week to look for a car. Search at least 12 classified ads every week to look for a car. Enroll in a driving learners class Enroll in a driving learners class Go on test drives with family and friends Go on test drives with family and friends Find 3 places where I can practice driving etc Find 3 places where I can practice driving etc Do you want to do more examples. Do you want to do more examples.

Porter’s Generic Strategies Model

Mission: Provide the best quality products in the shampoo market. Goal 1: Make our brand #1 in children’s shampoos. Goal 1: Make our brand #1 in children’s shampoos. Strategy: Differentiate our product (i.e. focus on quality vs. price) Strategy: Differentiate our product (i.e. focus on quality vs. price) Objective 1: Increase quality of children shampoos by 10%. Objective 1: Increase quality of children shampoos by 10%. Objective 2: Make caps of the bottles child proof as per industry standards. Objective 2: Make caps of the bottles child proof as per industry standards. Objective 3: Package bottles in shape of cartoon characters. Objective 3: Package bottles in shape of cartoon characters. Tactics: Tactics: Use natural ingredients in the kid shampoos. Use natural ingredients in the kid shampoos. Use less chemical dye in the shampoo. Use less chemical dye in the shampoo. Use less chemical smell agents in shampoo. Use less chemical smell agents in shampoo. Use focus group to test caps for being child proof. Use focus group to test caps for being child proof. Survey at least 20% of target population to find quality rating of our product. Survey at least 20% of target population to find quality rating of our product. Plan for ISO 9001:2000 & ISO 14001:2004 quality certifications of kid shampoos. Plan for ISO 9001:2000 & ISO 14001:2004 quality certifications of kid shampoos. Survey to find out top 5 most favorite cartoon characters in kids aged 1 to 15 yrs. Survey to find out top 5 most favorite cartoon characters in kids aged 1 to 15 yrs. Contact cartoon copyright companies to use their cartoons in our packaging etc. Contact cartoon copyright companies to use their cartoons in our packaging etc.

Product- Market Growth Matrix

Group Project

Group Project Links /docs/faqs.html /docs/faqs.html /docs/faqs.html /docs/faqs.html ml ml ml ml AL/DATASTATISTICS/ AL/DATASTATISTICS/ AL/DATASTATISTICS/ AL/DATASTATISTICS/

Example of Switzerland

Marketing Plan Outline Executive Summary Executive Summary Situation Analysis Situation Analysis Analysis of country Analysis of country Political and legal environment Political and legal environment Economic environment Economic environment Social and cultural environment Social and cultural environment Technological environment Technological environment SWOT analysis SWOT analysis

Market Segmentation Market Segmentation Description Description What they want What they want How they use the product How they use the product How to reach them How to reach them Price sensitivity Price sensitivity Marketing Strategy Marketing Strategy Discuss why you selected this strategy Discuss why you selected this strategy Discuss elements of the marketing mix (4 P’s) Discuss elements of the marketing mix (4 P’s)

Marketing strategy cont…. Marketing strategy cont…. 4 P’s cont…… 4 P’s cont…… Product Product Color Color Quality’ Quality’ Warranty Warranty Packaging etc Packaging etc Price Price Price range and discuss why you selected this range (hint income) Price range and discuss why you selected this range (hint income) Discounts Discounts Payment or leases etc. Payment or leases etc.

Marketing strategy cont…. Marketing strategy cont…. 4 P’s cont…… 4 P’s cont…… Place or Distribution Place or Distribution Distribution Channels Distribution Channels Discuss why you selected the channel Discuss why you selected the channel Promotion Promotion Advertising Advertising Public Relations Public Relations Budget Budget

Marketing Segmentation and Target Markets

Customers Needs and other Segmenting Dimensions Company Mission, Objectives, & Resources Competitors Current & Prospective

Customers Needs and other SegmentingDimensions Company Mission, Objectives, & Resources Competitors Current & Prospective S. W. O. T. External Market Environment External Market Environment Customers Needs and other Segmenting Dimensions Company Mission, Objectives, & Resources Competitors Current & Prospective

Customers Needs and other SegmentingDimensions Company Mission, Objectives, & Resources Competitors Current & Prospective S. W. O. T. Targeting & Segmentation Positioning & Differentiation Customers Needs and other SegmentingDimensions Company Mission, Objectives, & Resources Competitors Current & Prospective S. W. O. T. External Market Environment External Market Environment Customers Needs and other Segmenting Dimensions Company Mission, Objectives, & Resources Competitors Current & Prospective

Customers Needs and other SegmentingDimensions Competitors Current & Prospective S. W. O. T. External Market Environment External Market Environment Targeting & Segmentation Positioning & Differentiation Narrowing down to focused strategy with quantitative and qualitative screening criteria Company Mission, Objectives, & Resources Customers Needs and other SegmentingDimensions Company Mission, Objectives, & Resources Competitors Current & Prospective S. W. O. T. Targeting & Segmentation Positioning & Differentiation Customers Needs and other SegmentingDimensions Company Mission, Objectives, & Resources Competitors Current & Prospective S. W. O. T. External Market Environment External Market Environment Customers Needs and other Segmenting Dimensions Company Mission, Objectives, & Resources Competitors Current & Prospective

Market Segmentation The process of dividing the total market of a good or service into smaller groups such that each group is similar w.r.t. factors that influence demands. The process of dividing the total market of a good or service into smaller groups such that each group is similar w.r.t. factors that influence demands. Ex. Bikes Ex. Bikes Ex. Airline Ex. Airline

Why Segment Identifies opportunities and needs. Identifies opportunities and needs. Allows firm to focus on specific needs. Allows firm to focus on specific needs. Improves marketing mix for each segment. Improves marketing mix for each segment. Allows small firm to exist. Allows small firm to exist.

Segmentation Requirements to Segment: Sizeable or large enough Sizeable or large enough Identifiable or measurable Identifiable or measurable Reachable or accessible Reachable or accessible

Segmenting the Consumer Market Geographic Geographic Region, city, urban-rural, climate, country etc Region, city, urban-rural, climate, country etc Demographic Demographic Income, age, family, social class, education, occupation, religion etc Income, age, family, social class, education, occupation, religion etc Psychographic Psychographic Personality, lifestyle Personality, lifestyle Values: self-respect, self-fulfillment, security, belonging, excitement, accomplishment, fun etc Values: self-respect, self-fulfillment, security, belonging, excitement, accomplishment, fun etc Buying Behavior Buying Behavior Benefits desired, usage frequency, buyer preference Benefits desired, usage frequency, buyer preference

Target Market A target market is the marketing segment selected for marketing the product. A target market is the marketing segment selected for marketing the product.

style price Homogeneous Preference -no natural segments -all buyers have same preference

Diffused Preference -no pattern (…or poor research) -take center position style price

Clustered Preference -natural segments -increases as number of competitors increases style price

End of Lecture -4