Product mix

Four Basic Types of Opportunities

Examples of Different Types of Opportunities

• Market Penetration – Arm & Hammer promotes new uses of its baking

soda• Market Development

– Marriott Hotels target families for weekend to rent rooms filled by business travelers during the week

• Product Development– Microsoft develops a new version of its Windows

operating system to appeal to the people who bought an earlier version but now want more features

• Diversification– Reliance entering in to Telecom

Marketing Strategy and the Marketing Mix

Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes

Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts

Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter

Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer

Marketing mix is the set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market

Marketing Mix

MASS MARKETSTRATEGY

MULTISEGMENTSTRATEGY

CONCENTRATIONSTRATEGY

Organization’s Single

Marketing Mix

Mass Market

Organization’s Single

Marketing Mix

Se

gmen

t

A B C D E

Organization’s Several

Marketing Mixes

A D F

Se

gmen

t

Se

gmen

t

Se

gmen

t

A B C D E F

MARKETING STRATEGY

Target Markets

Targeting:Selecting which segments in a market

are appropriate to focus on and designing the means of reaching them.

Criteria for Effective Segmentation

1. Measurability

2. Accessibility

3. Durability

4. Differential Responsiveness

Stages in Developing Market Segmentation Strategies

Develop a market segmentation strategy

Define overall product marketin whichcompanyoperates

Identifydistinguishingcharacteristicsof segments orbases forsegmentation

Describesegments

Evaluateapproaches forpotential &likely success

Select targetmarket

Determinedesiredpositioning andthen developmarketing mixto achievedesired position

1 2 3 4 5 6

Bases for Segmentation

Demographics Geographic Psychographics & Lifestyles Behavioral Segmentation

Demographics Geographic Psychographics & Lifestyles Behavioral Segmentation

Behavioral

Geographics

De

mo

gra

phic

s

Psy

cho

gra

phic

s

Personality

Lifestyle

Age

Gender

Income

Buying Power

Expenditure patterns

Occupation

Education

Race or nationality

Family life cycle

Social class Decisions

Amount of usage

Type of usage

Brand loyalty

Nation/Region State/Region City/Neighborhood

Climate/Population density Market density

Segmentation Variables

Potential

Consumer

Segments

Demographic Dimensions

• Important operational dimensions for understanding market segments and developing marketing mixes– Much good data is available

• Important for determining size of consumer target markets – Is the market substantial?

• Seeing demographic trends helps identify opportunities– Shifts in age distribution– Geographic growth/decline

Income Distribution

• Growth in real income has slowed down• Higher income groups still have much of

the spending power

• DISPOSABLE INCOME– Income that is left after taxes

• DISCRETIONARY INCOME– What is left of disposable income after

paying for "necessities"

Characteristics and Attitudes of Middle and Lower Classes

• Middle classes– Plan and save for the

future– Analyze alternatives– Understand how the

world works– Feel they have

opportunities– Willing to take risks– Confident about decision

making– Want long-run quality

or value

• Lower classes– Live for the present– Have simplistic ideas

about how things work– Feel controlled by the

world– Want help with decision

making– Want short-run

satisfaction