MT 219 Marketing Unit Four Segmentation and Targeting Product, Branding, and Packaging Note: This seminar will be recorded by the instructor.

Review of Unit 3 How did Unit 3 go? Questions or concerns? Instructor suggestions for Unit 4 Questions?

Consumer Markets Individuals who purchase with the intent to consume or directly benefit from the purchased product. Product is not intended for resale or use in a manufactured product. Different from business markets where the product is used to produce goods or services in some way.

Target Market Segmentation Process 1. Identify appropriate strategy 2. determine segmentation variables 3. develop segment profiles 4. evaluate segments 5. select specific segments Basic Process: Heterogeneous Market  Segmentation  Homogeneous Sub-markets

Major Segmentation Strategies Undifferentiated – single product and single strategy for entire market – requires homogeneous market. Broadly based segment- most of the population. 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

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

Segmentation Variable – Which to use? Variable should be related to needs Variable must be measurable Company resources and capabilities must be considered

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

Geographic Variable Climate Terrain City size Urban/rural values Market Density Geo-demographic Segmentation Micromarketing

Psychographic Variables Personality Motivation Lifestyle -Activities -Interests -Opinions

Benefit Segmentation Variables Most Powerful Variables Underlies all other segmentation variables These relate most directly to consumer desires How the product benefits the consumer directly

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 think about buying. Many times due to emergency needs. Also, many impulse items.

Product Line and Mix Concepts Product line – group of closely related items Product item – specific version of product Product mix – total group of products made by company. Think about Proctor and Gamble. Product mix width – total number of lines offered. Think of different types of Dove. Product Mix depth – average number of different items offered in each line. Think shampoos

Product Life Cycle Characteristics Introduction – sales begin at zero, profits negative Growth – sales rise rapidly, profits peak Maturity – sales peak and start to decline as profits fall Decline – sales fall rapidly See figure in text

Marketing Objectives at each stage Introduction – build awareness, trial, and distribution Growth – establish unique selling proposition; differentiate Maturity – hold share, consumer loyalty Decline – depends on which strategy is chosen Look to this if you are doing Song Airline Case

Adoption – individual process 1.Awareness 2.Interest 3.Evaluation 4.Trial 5.Adoption

Adopter Categories - diffusion Innovators Early Adopters Early Majority Late Majority Laggards One Note: You can fall into different categories depending on the product we are talking about.

Branding - definitions Brand – identifying name, term, design, or symbol Brand Name – part of brand that can be spoken Brand Mark – part of brand that is non verbal Trademark – legal and exclusive use of brand

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

Levels of Brand Loyalty Brand recognition Brand preference Brand insistence

Types of Brands Manufacturer’s brands Private distributor brands Generic brands Family brands Individual brands

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

Brand extensions – use of existing brand on a new category Co-Branding – using two or more brands on one products Brand licensing – giving permission to another company to use its brand on other products for a fee. Franchising does this.

Packaging Functions Product protection and form maintenance Provide convenience to customers Promotional role Legal requirements Security

Any Questions? Thank you for attending! See you next week! Instructor will post the link to the recording of tonight’s seminar in the course Announcements.