Welcome to MT- 219 Marketing Seminar Dear Students, The Seminar will start promptly at the Schedule Time. Remember that the system saves a transcript of everything in the Chat, if you wish to talk among yourselves you may do so, or you may use the Private Chat Option. Dr. Nardi

Welcome to MT- 219 Marketing Unit 4- Seminar Professor: Dr. Nardi Unit 4- Seminar Professor: Dr. Nardi ………

Agenda Greeting & Welcome Back Review – last week This week’s Topic: Marketing Planning, Research and Segmentation –Strategic Planning »SWOT Analysis –Nature and Content of a Marketing Plan –Marketing Plan Criteria –Marketing Research Process –Measuring Marketing Productivity –Segmentation –Levels –Segmenting Customer Markets –Bases for segmenting Business Markets –Market Targeting Marketing Roundtable –This week’s Question: »“What is the best type of Marketing Research?” Wrap Up: Q&A Session

Announcements Quiz - Review –Will close on Tuesday at 11:59PM Mid-Term Survey –Opens on Monday. Mid-Term Grades –Average of Unit 1-3 Grades –Available to you On Wednesday after Unit 4 Ends.

Review of Unit 3 How did Unit 3 go? Questions or concerns? Instructor suggestions for Unit 4- Pay particular attention to segmentation for the Unit 6 Research Project Questions?

Review from Last Week Customer Behavior The Marketer’s responsibility with Quality Customer Perceived Value (CPV) What influences Consumer’s Behavior

What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors

Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups

Model of Consumer Behavior

Types of buying behavior Routinized response behavior frequently purchased, familiar, lost cost items Limited Problem Solving behavior unfamiliar brand in familiar category Extended Problem Solving unfamiliar, expensive or infrequently purchased items

Characteristics of Business Markets Fewer, larger buyers Close supplier-customer relationships Professional purchasing Many buying influences Multiple sales calls. Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

Kodak offers services that streamline processes for hospital administrators

Aramark successfully services institutional and government markets

? Any Questions??

Strategic Planning The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan.

Another Look at: Strategic Planning long-term plans based on the organizations overall business objectives. Strategic plans are typically multiple years and reach out 5 or 10 years (or more) using Scenarios or other planning methods that identifies Assumptions, Risks, and Environmental factors.

SWOT Analysis Internal - S trengths - W eaknesses External –Opportunities –Threats

SWOT - Examples Strengths –Patents, good brand name, good reputation among customers, good lead times, etc Weakness –Lack of patent protection, poor reputation among customer, lack of access to key distribution channels, etc. –Flipside of a Strength. Opportunities –An unfulfilled customer needs, arrival of new technologies, loosening of regulations, etc Threats –Shifts in customer tastes away from the company’s products, emergence of substitute products, new regulations, increased trade barriers, etc.

Marketing Plan –The central instrument for directing and coordinating the marketing effort. –The marketing plan operates on two levels: 1.The strategic marketing plan lays out target markets and the value proposition. 2.The tactical marketing plan specifies the product, promotion, merchandising, pricing, sales channels, and service.

Levels of a Marketing Plan Strategic –Target marketing decisions –Value proposition –Analysis of marketing opportunities Tactical –Product features –Promotion –Merchandising –Pricing –Sales channels –Service

? Any Questions??

Sources of Marketing Opportunities First is to supply something in short supply. Second is to supply an existing product or service in a new or superior way. Third is a totally new product or service.

Product Planning Each product level (product line, brand) must develop a marketing plan for achieving its goals. A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives.

Marketing Plan Contents Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls

? Any Questions??

Customer Driven Marketing Strategy Four stage process that segments, targets, differentiates and positions a product Segmentation- Basic Process: Heterogeneous Market  Segmentation  Homogeneous Sub- Markets Targeting- Selecting the best segments to focus on Differentiating- Create unique benefits for target segments Positioning- Placing product into customer’s minds compared to competition.

Mature consumers are a rapidly growing market

Target Market Segmentation Process 1. Identify appropriate strategy 2. determine segmentation variables 3. develop segment profiles 4. evaluate segments 5. select specific segments

Criteria for Effective Segmentation 1. Large enough with profit potential 2. Heterogeneous need for product 3. Segments must be identifiable and divisible 4. Segments must be reachable 5. Segments should be open to comparison

? Any Questions??

Effective Targeting Requires… Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. Establish and communicate the distinctive benefits of the market offering.

Major Segmentation Strategies Undifferentiated – single product and single strategy for entire market – requires homogeneous market Concentrated – Single segment, one strategy * major advantages include specialization and the ability to compete * major disadvantage – “all eggs in one basket” Differentiated – two or more segments each with its own marketing mix * major advantages include potentially higher sales and absorption of excess production capacity * Major disadvantage is cost

? Any Questions??

Levels of Segmentation Mass Marketing Segment Marketing Niche Marketing Local Marketing Customerization

Ford’s Model T Followed a Mass Market Approach Click Here

Segment Marketing Targeting a group of customers who share a similar set of needs and wants.

Niche Marketers Enterprise Rent-a-Car targets the insurance- replacement market Click Here

Examples of Market Customization

? Any Questions??

Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral

Geographic Variable Climate Terrain City size Urban/rural values Market Density Geodemographic Segmentation Micromarketing

Demographic Variables – closely related to needs and measurable Age Gender Race Ethnicity Income Education Occupation Family size Family life cycle Religion Social class Sexual orientation

Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

Profiling American Generations GI Generation – Silent Generation – Baby Boomers – Generation X – Generation Y – Millenials –

More on American Generations - Links America Generations:

Psychographic Variables Social class Lifestyle –Achievers –Strivers –Survivors Personality –Compulsive –Romantic –Authoritarian –Enthusiastic

Behavioral Segmentation Variables Most Powerful Variables Underlies all other segmentation variables These relate most directly to consumer desires How the product benefits the consumer directly Examples- –Occasions –Loyalty –Usage rates

Behavioral Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Psychographic Variables Personality Motivation Lifestyle –Activities –Interests –Opinions

? Any Questions??

Which Segment Variables to Use? Marketers are not likely to use just one segment variable Market segments often combine multiple variables together to create a desirable target segment Which variables might be combined to create a segment for- –Harley Davidson Motorcycles/ –Prada Shoes?

Positioning Where the product lives in the mind of the consumer as it relates to the competition Identify and select appropriate competitive advantages for the product Combine competitive advantages to develop an overall positioning strategy –More for More –More for the same –More for less –The same for less –Less for much less

? Any Questions??

Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics Personal Characteristics

? Any Questions??

What is a Product? Anything that is offered to a market to fulfill a need or want good service idea place person

Classifying Consumer Products Convenience – relatively inexpensive, frequently purchased items with many substitutes. Don’t confuse with a convenience store. Shopping – items for which buyers are willing to spend considerable effort to compare and purchase. Don’t confuse with what you buy when just shopping Specialty - products with unique characteristics for which consumers are willing to expend effort Unsought – items people do not know of or do not think about buying. Many times due to emergency needs. Also, many impulse items.

Services Intangible products involving a deed, performance, or effort that cannot be physically possessed Haircuts Concerts Tax preparation Annual doctors’ physicals

Nature of Services Intangibility Inseparability Variability Perishability Let’s look at these individually

Issues related to service intangibility Difficult for customers to evaluate No physical possession Difficult to advertise and display Pricing is problematical and subjective Service process not always protected by patents

Issues related to service inseparability Does not allow for mass production Customer participation required Other customers can affect process Difficult to distribute

Issues related to variability Quality difficult to control Standardization is a problem Services vary from provider to provider Services can vary from the same provider Reputation is crucial Franchises try to emphasize service homogeneity Reason for grading rubrics

Issues related to service perishability Services cannot be stored or inventoried Unused capacity is lost forever Demand may be time sensitive Balancing supply and demand is difficult

Branding- Brand Equity The marketing and financial value associated with a brand’s strength in a market brand name awareness brand loyalty perceived brand quality brand associations

Selecting a Brand Name Easy to pronounce, spell and remember Trademarkable Distinctive Conveys brand benefits Travels globally- Big concern today

Types of Brands National (Manufacturer’s) brands Store (Private) brands Licensing

Brand Development Line extensions- new forms, sizes, fragrances, etc are created in existing product line Brand extensions – use of existing brand on a new category, such as extending from a rock singer into acting Multibrands- use of different brand names by one company. Nestle or Proctor and Gamble New Brands- Creating entirely new brands

? Any Questions??

Instructor’s suggestions for Unit 4  Readings  Chapter 6 and Chapter 7  Make sure you understand the major segmentation variables?: Demographic, Geographic, Psychographic and Behavioristic Variables.  Discussion  Graded Assignment  Watch the Discussion Introduction Video  This week we’ll  Discuss the characteristics or variables that could be used to segment the market.  Take a look at the P&G site and the following product categories:  Deodorant, Baby Care, Health Care, Bodywash & Soap, Oral Care, Household Cleaners, Haircare, Shaving, Pet Nutrition.  Question:  Discuss the characteristics or variables that could be used to segment the market. Be sure to discuss some characteristics from each of the four major variable groupings. Provide a brief explanation for your choices and use specific examples where appropriate.  Using the assigned products listed in the Discussion Introduction; discuss the characteristics or variables that could be used to segment the market. Be sure to discuss some characteristics from each of the four major variable groupings. Provide a brief explanation for your choices and use specific examples where appropriate.  1 Response & 2 peer to peer comments.  Post on 3 days. (for full points).  Primary post by Saturday (for full points).  Response Words (minimum)

Assignment  Umpqua Bank  Watch the "Umpqua Bank" Video Case.  The video will take approximately 5 minutes to view.  Visit Umpqua Bank at  Template Available:  Answer the questions in a double spaced paper, no more than three pages long, and submit it to the Dropbox.  This Assignment must be completed in Microsoft Word format.  For some of the questions in this Assignment, you will have to review your reading from Unit 3.

Simulation  Segmentation Simulation  Theory Application.  In this simulation, you need to select the segmentation variable or variables that are being used in each situation.  As you will see, sometimes only one is being used, but there are sometimes multiple variables that need to be selected.  You will be using this knowledge in your Research Project in Unit 6 when you segment the market for the brand you selected in Unit 2.

? Any Questions??

Wrap Up Do your readings. Discussion: Remember you have to Answer ALL questions / elements of the Question. –Do NOT Neglect the Peer-to-Peer comments. Remember you have assignments due this week. –Due on Tuesday by 11:59 PM E.T. –Discussion, Simulation & Written Assignment

Contact  you can contact me through my through AOL Instant Messaging my AOL IM name is nknardi, (put me on your buddy list) my AOL IM “Office hours” are: Tuesdays 8:00-10:00 pm Eastern Time or through the “Instructor’s Office” link under the Course Home page

Thanks Thank you for Attending!!!! See you in the Discussion Thread Questions and in Next Week’s Seminar

Marketing Shoptalk Discussion: What is the best type of Marketing Research?