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.
Sink Water Fountain Golf Club and Weedwacker
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?