Marketing Mini Lesson for IA

Market Segmentation A segment refers to a sub-group of consumers with similar characteristics in a given market Market segmentation is the process of dividing the market into smaller or distinct groups to meet their needs Types of segmentation: Demographic (age, gender, religion, family characteristics, ethnic grouping) Geographic (regions in a country, climatic conditions) Psychographic (social and economic status, values)

Advantages of Segmentation Segmentation helps businesses identify existing gaps and new opportunities Designing products for a specific group of consumers can increase sales Segmentation minimizes waste of resources Businesses can diversify and spread their risk by differentiating products

Targeting A target market consists of a group of consumers with common needs or wants that a business decides to serve or sell to Targeting can be carried out in the following ways: Undifferentiated marketing (aka mass marketing) Differentiated marketing (aka segmented marketing) Concentrated marketing (aka niche marketing)

4 P’s of the Marketing Mix Product The good or service that is offered in the market Aim to satisfy needs and wants of consumers Price The amount consumers are charged for a product Indicates the value consumers perceive the product to have Promotion The ways in which consumers are informed about and persuaded to purchase product Place The product’s location or channels of distribution used

An appropriate marketing mix Inappropriate examples: Advertising an expensive car in a colorful children’s magazine Selling an exclusive perfume in a stall where second-hand clothes are sold A real-estate agent attempting to sell houses in a vegetable market An appropriate marketing mix must: Be well coordinated Be clear, focused, and not abstract or ambiguous Consider the market it is aiming to sell the product to Look into the degree of competition that its product faces Target the right consumer

Product – Product Life Cycle Shows the course that a product takes from its development to its decline in the market Six stages: Development Introduction Growth Maturity Saturation Decline

Product – BCG Matrix

BCG Matrix for Adidas

Ansoff Matrix Penetration: When marketers try to sell the existing product to the existing customers. It can be achieved in multiple ways. For example, by changing pricing, by adding minor features (new and improved!), changing the packaging (shampoo sachets), or highlighting alternative uses. Product Development: McDonald's introduced salads in their outlets in order to retain its existing customers, many of whom were becoming more health conscious.Salads are exactly opposite of what McDonald's is known for! However, regulatory pressures, changing consumer behavior, and negative media coverage forced them to introduce more healthy choices on the menu. Market Development: Introducing an existing product in different markets is perhaps one of the most used strategies to extract full benefit of a successful product. A very common example is entering different geographical areas nationally and internationally. Diversification: When marketers introduce a totally new product to a completely new market, they engage in diversification. I think that iPod was perhaps one of the most successful diversification ever. With its launch Apple targeted a very large customer group, very different from its traditional smaller cult-like following.

Ansoff Matrix for Coca Cola

Price – Pricing Strategies Cost-plus pricing (mark-up pricing) Penetration pricing Price skimming Psychological pricing Price discrimination Competitive pricing

Promotion – Promotional Strategies Above-the-line promotion Advertising Informative advertising Persuasive advertising Reassuring advertising Below-the-line promotion Direct marketing Personal selling Public relations Sales promotions

Place – Distribution Channels Types of distribution channels: Zero intermediary channel One intermediary channel Two intermediaries channel

Unique Selling Point (or Proposition) This is a feature of a product that differentiates it from other competing products in the market. Your USP can come from any area of the marketing mix: Product: Apple Price: Walmart Place: Coca Cola Promotion: Nike

Product Positioning (customer perception) Product positioning involves analyzing how consumers define or perceive a product compared to other products in the market An effective tool they could use in planning their positioning strategies is a position or perception map Importance of a position map: Helps a company to establish which are its close competitors and threats Helps identify gaps or opportunities in the market Simple and quick way to present research data Helps in targeting specific market segments

Product Positioning: Chocolates

Product Positioning: Cars