8/8/2019 Prof Priya Sean http://slidepdf.com/reader/full/prof-priya-sean 1/35 for which categories of product a company should target women? why?what are the features in consumer durable & non durable category that are likely to influence decision-making by women?. "Jockettes," young women who embody active lifestyles and participate in sports, are the most common female segment that makes up over 25 percent. Girls are also categorized as "in-style socialites," "most likely to succeed," "style meets thrift" and "traditionalists." ³Brand marketers that target teens have so many variables to consider, including their interests, brand loyalties, shopping behaviors and Internet usage,´ said Don Damore, CEO of ASL, in a statement. ³This segmentation breaks down not only what teens are interested in, but where and how they shop, and how they respond to direct mail, digital advertising and in-store marketing. It also shows how teens use different forms of traditional and new media.´ The segmentation data found that gender influences teen buying habits. Fourteen percent of both male and female teens shop online, but are more likely to make in-store purchases. Despite increases in teen Internet usage, most still rate traditional media² TV, radio and magazines²as their most trusted sources of information; however, online sources did dominate some male segments. Non Durable Consumer Goods: Goods have a very short life span and are perishable in nature are called non-durable goods. yExamples:
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for which categories of product a company should target women? why?what are thefeatures in consumer durable & non durable category that are likely to influence
decision-making by women?.
"Jockettes," young women who embody active lifestyles and participate in sports, are
the most common female segment that makes up over 25 percent. Girls are also
categorized as "in-style socialites," "most likely to succeed," "style meets thrift" and
"traditionalists."
³Brand marketers that target teens have so many variables to consider, including their
interests, brand loyalties, shopping behaviors and Internet usage,´ said Don Damore,
CEO of ASL, in a statement. ³This segmentation breaks down not only what teens are
interested in, but where and how they shop, and how they respond to direct mail, digital
advertising and in-store marketing. It also shows how teens use different forms of
traditional and new media.´
The segmentation data found that gender influences teen buying habits. Fourteen
percent of both male and female teens shop online, but are more likely to make in-store
purchases. Despite increases in teen Internet usage, most still rate traditional media²
TV, radio and magazines²as their most trusted sources of information; however, online
sources did dominate some male segments.
Non Durable Consumer Goods:
Goods have a very short life span and are perishable in nature are called non-durable
Men tend to see life as a series of contests they must conquer to maintain personal
status. When a man sees a beer commercial he thinks, ³How can I achieve that
lifestyle?´ A woman who sees the same commercial thinks something completely
different. Men are also likely to think in a linear manner and validate themselves though
their accomplishments, while women are likely to validate themselves through their
relationships.
Men and women differ in just about every way including their buying behavior. Womendo have a greater affinity for what we think of as shopping ² walking at a relaxed pace
through stores, examining merchandise, comparing products and prices, interacting with
sales staff, asking questions, trying things on, reading labels and ultimately, making
purchases. Even when shopping for mundane everyday necessities, even when the
?Cohesion is the emotional bonding between family members. It measures how close
to each other family members feel on an emotional level. Cohesion reflects a sense of
connectedness to or separateness from other family members.
* ?Adaptability measures the ability of a family to change its power structure, role
relationships, and relationship rules in response to situational and developmental stress.
The degree of adaptability shows how well a family can meet the challenges presented
by changing situations.
* ?Communication is a facilitating dimension, critical to movement on the other two dimensions. Positive communication skills (such as empathy, reflective listening,
supportive comments) enable family members to share their changing needs as they
relate to cohesion and adaptability. Negative communication skills (such as double
messages, double binds, criticism) minimize the ability to share feelings, thereby
restricting movement in the dimensions of cohesion and adaptability. Understanding
whether family
members are satisfied with family purchase requires communication within the family.
To determine how the family makes its purchase decisions and how the family affects
the future purchase behaviour of its members, it is useful to understand the functions
provided and the roles played by family members to fulfill their consumption needs.
Men atr too precise / accurate thinkers / to the point.
A particularly interesting article was done at the University of Wisconsin where they
reviewed over 100 studies looking at whether men or women were better at math and
verbal skills.
It studied decision making in the form of mathematical questions and problem solving
amongst boys and girls of various ages. Their conclusion was that both boys and girls
have fair ly equal abilities. Any discrepancies were very much because of cultur al
biases and ster eotypes.
In one particular mathematics exam, the boys and girls had similar results, except for
those girls that had been told before the exam that the exam itself would indicategender differences. These girls did not score so well in the exam. It's even more
significant when you consider that all the students were in the top grade for
mathematics.
Influential ster eotypes
So the impact of stereotypes plays a huge role in the decision making process. What
somebody believes and assumes to be tr ue about themselves drives their decision
making.
And you think about young children and how boys and girls have different toys, and play
different games. The traditional boys games are 'wilder' and involve more risk than the
girls ones. They are essentially being 'groomed' to take on different roles.
These roles are changing mor e r apidly than at any other time in history. Children
seem to be growing up faster these days, and making mor e decisions at a younger
age. Just consider the rise in teenage pregnancy rates.
In addition to categorizing by type of offering, most products intended for consumer use
can be further categorized by how frequently and where they are purchased.
y Convenience Products ± These are products that appeal to a very large market
segment. They are generally consumed regularly and purchased frequently.
Examples include most household items such as food, cleaning products, and
personal care products. Because of the high purchase volume, pricing per item
tends to be relatively low and consumers often see little value in shopping around
since additional effort yields minimal savings. From the marketer¶s perspective
the low price of convenience products means that profit per unit sold is very low.
In order to make high profits marketers must sell in large volume. Consequently,marketers attempt to distribute these products in mass through as many retail
outlets as possible.
y Shopping Products ± These are products consumers purchase and consume on
a less frequent schedule compared to convenience products. Consumers are
willing to spend more time locating these products since they are relatively more
expensive than convenience products and because these may possess
additional psychological benefits for the purchaser, such as raising their
perceived status level within their social group. Examples include many clothing
products, personal services, electronic products, and household furnishings.
Because consumers are purchasing less frequently and are willing to shop to
locate these products, the target market is much smaller than that of
convenience goods. Consequently, marketers often are more selective when
choosing distribution outlets to sell their products.
y Specialty Products ± These are products that tend to carry a high price tag
relative to convenience and shopping products. Consumption may occur at about
the same rate as shopping products but consumers are much more selective. Infact, in many cases consumers know in advance which product they prefer and
will not shop to compare products. But they may shop at retailers that provide the
best value. Examples include high-end luxury automobiles, expensive
champagne, and celebrity hair care experts. The target markets are generally
very small and outlets selling the products are very limited to the point of being
exclusive.
In addition to the three main categories above, products are classified in at least two
additional ways:
y Emergency Products ± These are products a customer seeks due to sudden
events and for which pre-purchase planning is not considered. Often the decision
is one of convenience (e.g., whatever works to fix a problem) or personal
fulfillment (e.g., perceived to improve purchaser¶s image).
y Unsought Products ± These are products whose purchase is unplanned by the
consumer but occur as a result of marketer¶s actions. Such purchase decisions
are made when the customer is exposed to promotional activity, such as a
salesperson¶s persuasion or purchase incentives like special discounts offered to
certain online shoppers. These promotional activities often lead customers to
curves is characteristic of both the product introduction and market growth periods.
During this period, the sales of the total industry are r ising fairly rapidly as more and
more customers enter the market. The second phase may last from several days
to s eve r a l years, depending on whether the product in hula hoops or television
sets. The early innovators usually make substantial profits. The total industry
may appear extremely profitable and competitors rush in wi t h copies of the most
successful products. As far as this product is concerned, this is the time of peak
profitability
7.5.3. Mar ket Matur ity
In this third stage, many competitors have entered the market. We now move into a
more competitive situation with declining profits. Promotion emphasizes theadvantages of particular brands, but products differ only slightly because most of the
companies have settled on the same way to appeal to the mass market. There is a
tendency to copy competing features. Mass production methods also discourage
product variety. This market, still characterized by monopolistic competition, is
becoming much more competitive on product, price and promotion. Basic product
similarities and mass production mean that firms must resort to product differentiation
practices. At this time, emotional appeals become more common - the only remaining
way to add value to the product. Industry profits decline throughout the market maturity
period because the cost of promotion rises and competitors begin to cut prices to attract
business. Although each firm still has its own demand curve, the curves are becoming,
increasingly elastic as the various products become almost homogeneous. Prices may
be cut even as total industry volume rising. This has been the case recently in plastics
and transistors, for example.
7.5.4.
Sales
Decline
As new products come along to replace the old, this fourth and final stage of the life
cycle reached. Price competition from dying firms may become more vigorous, but
companies that have strong customer franchises may continue to profit almost until the
end. These competitors wi l l have down-sloping demand curves because they have
successfully differentiated their products. As the new product goes through the
introductory stage, the old product may still be able to retain some sales, until finally
sales decline so much that the product is withdrawn from the market.
7.6. Classification Of Pr oducts
Just as it's necessary to segment markets for meaningful programming in market, so
also it's helpful to separate products into homogeneous classifications. lere we shall
divide all products into two groups: CONSUMER GOODS and INDUSTRIAL GOODS a
classification that paral lels our segmentation of the market.
7.6.1. Consumer Goods And Industr ial Goods
There are many kinds of consumer goods. So many, in fact, that is impossible todiscuss the marketing process for each of them. Further, some products usually
considered consumer goods may also be industrial goods since they are destined for
use by intermediate customers. C onsumer goods are those goods or services destined
for the ultimate consumer in such a form that they may be used without further
commercial processing. These contrast with indust r ial goods, which are defined as
those goods and services destined for use in producing other goods and services. ' All
goods fit into either of these two categories.
The type of customer buying the good determines whether it should be classified as a
consumer and industrial good. Although the same physical product may be involved, an
entirely different marketing mix may be required, depending upon the type of buyer and
intended use. The following products and services can be either consumer or industrial
goods, depending upon whether they are destined for a final consumer or some
intermediate customer (such as a manufacturer, farmer or government agency):
producing other goods or rendering services as contrasted with goods destined to be
sold primarily to the ultimate consumer.
7.6.1.1 Need For A Classification System
Fresh meal, cannot salmon and lettuce are all foods, vet all are marketed differently.
Hosiery and women's party dresses are clothing items, but the marketing mixes for each
are quite dissimilar. Hosiery is available in many different types of outlets and has a
much simpler fitting problem. And hosier) has been successfully branded, wh i l e few
women's dress brands are widely recognized by customers.
There are many other examples of apparently similar products with dissimilar marketing
problems. It is clear that the nature of the product has considerable bearing on how the
four P's are combined in a marketing mix. To avoid treating every product as a special
case, we must try to develop some sensible, if tentative, generalizations about how
products are related to marketing mixes. Let us see if we can develop such a product
classification system.
7.6.1.2. Some Possible Classification Systems
One system of classification might be by the type of outlet through which the products
are marketed. All products usually found in grocery stores could be treated alike, for example. So could those found in drugstores, clothing stores, sporting goods stores,
hardware stores and so on.
Under such a system, how would we treat a product such as toothpaste? Toothpaste is
now being sold in drugstores, food stores, variety stores, department stores, college
book stores and many other places. At one time stores specialized in certain products,
but there is a definite trend for several types of store. This is called "scrambled
merchandising."
Another possibility would be to categorize a product as a necessity or as a luxury. The
difficulty with this system is that it would depend on the rater's attitudes. A "necessity" to
one person might be a "luxury" to another. Moreover, while broad categories such as
food are obviously necessities, relatively few individual food items are.
Classi fy i ng by the degree of demand elasticity is another poss ib i l i t y . But the
elasticity of demand for general categories such as food does not hold true for all the
products within the category. Within the meat category alone (which might be
considered to have a fairly inelastic demand) the demand for special meat products,
such as hamburger or porterhouse steak, are much more elastic. The reason is that
there are many substitute ways of satisfying the general demand for meat.
7.6.1.3. A Useful Classification System
We need a classification system based on the way people buy pr oducts. The purpose of
the marketing process is the satisfaction of consumers. It follows that, to develop and
market products effectively, we must know how they feel about these products and
especially their basis of choice. It follows that, then, that any classification systemshould be based upon customer behavior. Our system works that way, separating
goods into fourcategories:
1) Convenience goods,
2) Shopping goods,
3) Specialty goods,
4) Unsought goods.
C onvenience goods are those which customers wish to purchase immediately and with
a minimum effort. Put another way, convenience goods are those goods for which the
probable gain from making price and quality comparisons is thought to be small relative
to the value of customers." time and effort.
Shopping goods as the name implies, are those goods for which customers actually do
shop. That is, they compare price and quality of various brands. They may read about
performance, search newspaper advertisements and even go to several stores. In short,
they feel that the gain from making these comparisons is worth their time and
effort.Specialty goods are those which customers characteristically insist upon and for
which they are wi l l ing to make a special effort.
her store changes prices only infrequently on these items, she does not need to
reconsider which item to purchase, but can stay with familiar ones.
Staples items are offered for sale in many convenient places because of customers'
reluctance to search very far. They are found in food stores, drugstores, hardwarestores and vending machines, for example. Some customers value convenience so
highly that they prefer to have such goods delivered to their home. Some think of m i l k ,
ice and newspapers as items which ought to be delivered to them. This extra service
often increases the price but, because of the convenience, customers are willing to pay
sl ig htl y more.
Impulse goods. Contrasted to staples, impulse goods are those which customers
typically do not seek. They are included in the category of convenience goods (rather than unsought goods) mainly because they are items which the customer wishes to
purchase on sight and may have purchased the same way many times before. For
example, ifa housewife were to pass a street corner vendor, decide eating ice cream
would be a good idea and purchase an ice cream bar, this bar probably would be an
impulse good.
However (and this is the important distinction) if the same housewife were to purchase a
box of ice cream bars while shopping with the invention of using them for a family
dessert, then the bars would be regarded as staples. She was looking for desserts,
among other things. The distinction is a subtle but important one. If the customer docs
not purchase an impulse good immediately, the need may disappear and no purchase
will be made whereas she probably will buy some dessert. If the housewife passed a
man selling balloons and considers buying one for her small chi ld but finds she has not
the proper change, it is most unlikely that she will go back later looking for a balloon.
Other probable impulse goods include fountain service, roasted chestnuts or peanuts,
candy and novelties, some women's hats and blouses and costume jewelry. As the
income and buying power of consumers grow, the number of impulse items seems to be
expanding. But it should not be assumed that all impulse goods are purchased for
emotional reasons. To be sure, impulse goods may satisfy emotional motives, but they
may also satisfy economic motives. A housewife might buy a new floor mop which
promises to make her housework easier even though she had not even been thinking
about one.
Just because a product seems to be purchased as an impulse good does not mean thatthe customer was not already aware of the product category and perhaps even of the
brand. There might even be strong brand preference on some items which are
purchased on impulse for example Coca-Cola and some brands of candy bars. An
impulse purchase might satisfy a strongly felt need in the same way that the need had
been satisfied many times before. This would still be an impulse purchase, however,
because the particular purchase in question was not planned and the need might not be
satisfied (at least with the particular product involved) if it had not been seen.
This means place will be extremely important for impulse goods. Department stores
often place such goods on the first floor near main doors, while supermarkets and
drugstores put them near the checkout counter.
Emergency goods. Emergency goods are purchased less frequently, only when the
need is urgent. Then the customer wants the product available in the most convenient
place. Price, perhaps even quality, is of small concern especially if the need is
immediate enough. The demand for such goods may be extremely inelastic. Ambulance
services, umbrellas or raincoats during a rainstorm and tire chains during a driving
snowstorm are examples of emergency goods.
7.6.2.2. Shopping Goods
Shopping goods are those for which the probable gain from making price and quality
comparisons is thought to be lar ge relative to the time and effort needed to shop
properly for these goods. When a substantial group of customers find it worthwhile toshop around for a particular product, then we arc dealing with a shopping good.
Shopping Goods can be divided into two classifications depending on what
branded item which develops a strong consumer franchise may achieve specialty goods
status. Consumers have been observed asking for a drug product by its brand name
and when offered a substitute, actually leaving the store in anger.
Same well-advertised food a drug products seem to have carved out a market for themselves. If they achieve the brand insistence stage, we call them specialty goods.
As might be expected, the demand for specialty goods will be relatively inelastic, at
least within reasonable price ranges, since target customers are wi l l i n g to insist upon
the product.
7.6.2.4. Unsought Goods
Unsought goods are those which potential customers do not yet want or know they can
buy and therefore do not search for at all. Furthermore, if these target customers
happen to come upon the product, they probably would not buy unless additional
promotion were directed toward them.
In talking about unsought goods, it becomes extremely important to bring in the market
grid concept again and state specifically what target markets are being considered.
Mobile homes, for example, would probably be a shopping good for those who are
logically in the market: construction workers, servicemen, students and elderly couples.
At certain times, such families are definitely seeking a mobile home and for them (at
that time) the product would be a shopping good. Most mobile home dealers treat the
product as a shopping good, selling against other mobile homes rather than against
tract home builders.
But if the target market is defined as all those families who might be interested in
purchasing homes, then mobile homes probably are unsought goods. Again the
classification depends upon the attitudes of the relevant target market.
7.6.2.5. Industr ial Goods
While a consumer goods classification system is useful for developing effective
marketing mixes, an industrial goods classification is even more valuable. In
the family, even allowing for the growing importance of husbands and children, the
wife is the prime buyer; she buys all types of goods.
But is an industrial plant, there are a number of buying influences, depending mostly on
the product but partly on the company involved. While most purchases are made by apurchasing agent, the major influence may be exerted by the office manager, plant
foreman or the executive group.
7.6.2.5.1. Gener al Char acter istics of Industr ial Goods
Most industrial goods have the following general characteristics:
Their demand is derived from the demand for final consumer goods,
Industrial demand may be inelastic while one company's demand may be elastic,
Buyer interest in price depends on the nature of the product,
Buying is basically concerned with economic factors,
The buyer's attitude seems to be affected by the tax treatment accorded the
product
Whether the expenditure for the product is charged off as a capital or an expense item.
7.6.3. Industr ial Goods Classifications
Industrial goods buyers do relatively little shopping as compared with consumer goods
buyers. The accepted practice is for the seller to come to the buyer. This means that a
productclassification system based primarily on shopping behavior is not appropriate.
The industrial goods classification we will use is determined by how buyers look at
Accessory equipment (like installations) does not become a part of the final product.
These products are usually less expensive and shorter lived than installations, but still
are capital items.
Actually, accessory equipment is very similar to the smaller standard installations. This
category includes tools and equipment which facilitate production or office activities,
examples include portable drills, sanding machines, electric lift trucks and small lathes.
7.6.3.3. Raw Mater ials
Raw materials are those products which have undergone no more processing than is
required for convenience, protection or economy in storage, transportation or handling.In cont rast with our first two categories, they become part of the physical product.
Raw materials are expense items and are regarded in an entirely different light from the
capital items we have been considering. Their purchase has a major impact on the
current profit and loss situation, but less impact on the long-run situation. Even so,
where raw materials represent a large part of the firm's costs, top executives may enter
into the negotiation, especially of annual contracts. Subsequently, routine purchase
orders are sent through against suck contracts. Obviously these products would comedirectly from farms, forests, seas or mines. Since many different products come under
this raw materials category it is useful to break them into two broad categories:
1) Farm products,
2) Natural products. These may be subdivided as follows: