Marketing Concepts

Workbook – DO NOW Page 254 – Tesco is Market leader in Thailand. Question 1,2,3 (15 mins)

Adding Value Marketing is the added value on most products, the customers will pay for something the perceive is of better quality.

How Companies Add Value Retail environment improvements i.e. a beauty salon or hairdresser needs to make the customer feel welcome, magazines, comfortable waiting area, TV etc Packaging creates a POD i.e. Chocolate Promotion must have brand Ie Coke, Levis Create a USP – differentiates your product from competitors.

USP + Product Differentiation USP – the feature of the product that differentiates it from the competitor. Product Differentiation – Making the product stand out from competitors in the consumers perception.

Golf Club and Weedwacker Sink Water Fountain

Mass Marketing Selling product to the whole market without targeting anyone specifically. This isn't very common as it means there is no real direction for your product line. What Companies would you consider use mass marketing?

Advantages of Mass Marketing Small Market Niches don’t allow economies of scale to be achieved. Mass Marketing firms will have lower costs of production. Mass Market strategies run fewer risks than Niche Market. Ie if tastes and preferences change in your niche this can result in a loss of sales.

Niche Marketing Identifying and exploiting a small segment of a larger market by developing products to suit it. What companies might use Niche Marketing as there approach?

Advantages of Niche Marketing Small Firms can survive and thrive in markets that are dominated by large firms. Sometimes you can make high profits because of a lack of competitors within the market. Niche market products can be used by large firms to create status and image that their mass market products lack.

Market Segmentation Market segment – A sub group of consumers within a market in which consumers have similar characteristics. Market Segmentation – identifying different segments within a market and targeting different products or services to them. This approach is very normal within the business world, it requires businesses really understanding consumers and the groups within there market.

Market Segmentation What Segments of the market are the following products targeted at?

Market Segmentation Marketers need to identify different consumer groups that are most likely to buy there products. This leads to a consumer profile, so the marketing can be more effective in terms of promotion, design and price. Consumer profiles include – age, income level, location, gender and social class.

Market Segmentation There are three commonly used basis for segmentation Geographic Differences Demographic Differences Psychographic Differences

Geographic differences Consumer tastes may vary between different areas so it may be appropriate to offer different products and market them in location specific ways. Different countries have different cultures so some forms of advertising are not going to be acceptable in different countries. Before entering a new market extensive research needs to be done to avoid a loss of sales from a disrespect of local laws or culture.

Examples Frank Perdue's chicken slogan, "it takes a strong man to make a tender chicken" was translated into Spanish as "it takes an aroused man to make a chicken affectionate". The Coca-Cola name in China was first read as "Ke-kou-ke-la", meaning "Bite the wax tadpole" or "female horse stuffed with wax", depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent "ko-ou- ko-le", translating into "happiness in the mouth".

Examples We all know about GM's Chevy Nova meaning "it won't go" in Spanish markets, but did you know that Ford had a similar problem in Brazil with the Pinto? Pinto was Brazilian slang for " tiny male genitals". Ford renamed the automobile Corcel, meaning "horse".

Demographic Differences The most common use for segmentation. Demography is the study of the population data, and identifies the following characteristics. -Age -Income -Sex -Religion -Ethnicity - Social Class This helps organizations become more effective with there marketing.

Demographic Differences Socio economic groups or social class include – Upper Middle class, Middle Class, Lower Middle class, working class. Your class often determines what you would spend your income on, so the higher the class the more likely to spend money on luxury goods.

Class System Identify two products that each different class might buy. - Upper Class - Middle Class - Lower Middle Class - Working Class

Acronyms for different Groups DINKY – double income no kids yet NILK – no income lots of kids WOOF – well off older folk SIN BAD – Single Income, No Boyfriend and Absolutely Desperate GLAM – Greying, Leisured, Affluent, Middle-aged YUPPIE – Young Urban Professional

Psychographic factors Differences in consumers lifestyles, personalities, values and attitudes. These can be influenced by the consumers social class. I.e. consumers different attitudes to ethical business, private education and organic food

Psychographic Factors How Might your Life Style affect your purchasing decisions? What about your personality?