1. MGT301 Principles of Marketing
Lecture-19

2. Summary of Lecture-18

3. Market Segmentation (cont..)

4. Requirements for Effective Segmentation

5. Measurable Accessible Substantial Differential Actionable
Effective Segmentation
This CTR relates to the material on pp. 215.
Accessible
Size, purchasing power, profiles of segments can be measured.
Substantial
Segments must be effectively reached and served.
Differential
Requirements for Effective Segmentation
Measurability . This refers to the degree to which the size and purchasing power of the segments can be measured. The accuracy and availability of measures of market potential are important.
Accessibility. This refers to the degree to which a market segment can be reached and served. Identifying a segment is useless if the marketer has limited access to the customer.
Substantiality. This refers to the degree to which the segments are large or profitable enough to service.
Actionability. This is the degree to which an effective marketing program can be designed for attracting and serving segments. Company resource limitations figure prominently in actionability issues.
Segments must be large or profitable enough to serve.
Actionable
Segments must respond differently to different marketing mix elements & actions.
Must be able to attract and serve the segments.

6. Target Marketing

7. Positioning for Competitive Advantage

8. Identifying Possible Competitive Advantages
Product
Differentiation
i.e. Features, Performance, Style & Design, or Attributes
Services
Differentiation
i.e. Delivery, Installation,
Repair Services, Customer
Training Services
Image
Differentiation
i.e. Symbols, Atmospheres, Events
Personnel
Differentiation
i.e. Hiring, Training Better People Than Competitors Do

9. Today’s Topics
Marketing Mix 4 Ps

10. Marketing is the involved process of determining the 4 P’s of the Marketing Mix
Product
Price
Promotion
Place (Distribution)

11. The Marketing Mix Product Target Market Price Place Promotion
Four marketing activities—product, Price, Place and Promotion—that a firm can control to meet the needs of customers within its target market
Product
Target Market
Price
Place
Promotion

12. Marketing Mix Variables
Product
Goods, services, or ideas that satisfy customer needs
Pricing
Decisions and actions that establish pricing objectives and policies and set product prices
Place
The ready, convenient, and timely availability of products
Promotion
Activities that inform customers about the organization and its products

13. Components of Strategic Marketing

16. Value-Driven Marketing
A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
Customer value = customer benefits – customer costs
Customer benefits
Anything desired by the customer that is received in an exchange
Customer costs
Anything a customer gives up in an exchange for benefits
Monetary price of the benefit
Search costs (time and effort) to locate the product
Risks associated with the exchange

17. Benefits Consumers don’t buy products; they buy benefits
Functional benefits: relating to the practical purpose a product serves
Psychological benefits: relating to how a product makes one feel

18. Question: Why do you buy laptop?

19. What is a Product?
Whatever is offered for “sale” in a marketing exchange
Can be tangible goods (Laptop), services (VU education), ideas (Don’t smoke), places (Muree hills ), persons.

20. What is a Product ? Products, Services, and Experiences
Market offerings, pure tangible goods, pure services, experiences

21. Definitions
Product
Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
Service
Any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything.

22. Goods
Services

23. Sold Then Produced and/
Goods
Services
Tangible
Produced Then Sold
Intangible
Sold Then Produced and/
or Consumed Same Time

24. Sold Then Produced and/
Goods
Services
Tangible
Intangible
Produced Then Sold
Sold Then Produced and/
or Consumed Same Time
Can Store and Transport
Produced Separate
From Consumer
Perishable
Often Produced In
Consumer's Presence

25. Levels of Products

26. Core Benefit or Service
Augmented
Product
Product Levels
This CTR corresponds to Figure 8-1 on p. 239 and relates to the material on pp
Installation
Packaging
Brand
Name
Features
Delivery
& Credit
After-
Sale
Service
Core
Benefit or
Service
Product
A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Products can be physical objects, services, persons, places, organizations, and ideas.
Product Levels
Core Product. This concept refers to the use-benefit, problem-solving service that the consumer is really buying when purchasing a product.
Actual Product. The actual product is the tangible product or intangible service that serves as the medium for receiving core product benefits. Five characteristics:
Quality Level refers to product performance.
Features include combinations of product attributes.
Design consists of aesthetic or ergonomic aspects of the product.
Brand Name may help consumers position and identify the product.
Packaging serves to both protect the product and to promote it to consumers.
Augmented Product. The augmented consists of the measures taken to help the consumer put the actual product to sustained use. Measures can include installation, delivery & credit, warranties, and after sale service.
Quality
Level
Design
Warranty
Core
Product
Actual
Product

27. Product Classifications
Consumer products
Industrial products

28. Product Classifications

29. A Product..
Anything tangible or intangible that, through the exchange process, satisfies consumer or business customer needs.
Products can be:
physical goods,
services,
ideas,
people, or
places

30. Classification of Products How Long the Products Will Last

31. Provide Long-Term Benefits (cars, furniture, appliances)
Durable Goods
Provide Long-Term Benefits
(cars, furniture, appliances)
High
Involvement Decisions
Nondurable Goods
Provide Short-Term Benefits
(newspapers, food)
Low
Involvement
Decisions

32. Product Classifications Consumer Products

33. Types of Consumer Products
Frequent purchases bought with minimal buying effort and little comparison shopping
Low price
Widespread distribution
Mass promotion by producer
Convenience
Shopping
Specialty
Unsought

34. Types of Consumer Products
Less frequent purchases requiring more shopping effort and price, quality, and style comparisons.
Higher than convenience good pricing
Selective distribution in fewer outlets
Advertising and personal selling by producer and reseller
Convenience
Shopping
Specialty
Unsought

35. Types of Consumer Products
Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity
High price
Exclusive distribution
Carefully targeted promotion by producers and resellers
Convenience
Shopping
Specialty
Unsought

36. Types of Consumer Products
Little product awareness and knowledge (or if aware, sometimes negative interest)
Pricing varies
Distribution varies
Aggressive advertising and personal selling by producers and resellers
Convenience
Shopping
Specialty
Unsought

37. Industrial products
Materials and parts
Capital items
Supplies and services

38. Enough for today. . .

39. Summary
Marketing Mix 4 Ps

41. Levels of Products

42. Core Benefit or Service
Augmented
Product
Product Levels
This CTR corresponds to Figure 8-1 on p. 239 and relates to the material on pp
Installation
Packaging
Brand
Name
Features
Delivery
& Credit
After-
Sale
Service
Core
Benefit or
Service
Product
A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need. Products can be physical objects, services, persons, places, organizations, and ideas.
Product Levels
Core Product. This concept refers to the use-benefit, problem-solving service that the consumer is really buying when purchasing a product.
Actual Product. The actual product is the tangible product or intangible service that serves as the medium for receiving core product benefits. Five characteristics:
Quality Level refers to product performance.
Features include combinations of product attributes.
Design consists of aesthetic or ergonomic aspects of the product.
Brand Name may help consumers position and identify the product.
Packaging serves to both protect the product and to promote it to consumers.
Augmented Product. The augmented consists of the measures taken to help the consumer put the actual product to sustained use. Measures can include installation, delivery & credit, warranties, and after sale service.
Quality
Level
Design
Warranty
Core
Product
Actual
Product

43. Product Classifications

44. Next….
Product (cont..)

45. MGT301 Principles of Marketing
Lecture-19