Professional Documents
Culture Documents
Marketing Strategy
Chapter 6
Chapter 6
Chapter 6
Product
Price
Distribution
Promotion
Chapter 6
Chapter 6
Market Segmentation
Market segmentation involves dividing the total market into groups of customers having relatively common or homogeneous needs and attempting to develop a marketing mix that appeals to one or more of these groups.
This approach may be necessary when customer needs are similar within a single group, but their needs differ across groups. Through research, firms can identify the needs of each market segment and create marketing mixes that best match those needs and expectations. There are a variety of factors that can be used to divide markets into homogeneous groupings, but most fall into one of three general categories:
State-of-being segmentation divides markets into segments using demographic factors such as gender, age, income, and education. State-of-mind segmentation deals with how consumers think and feel. State-of-being and state-of-mind segmentation are really surrogates for the true issue in market segmentation, benefits sought.
Chapter 6
Multisegment Strategy
Product
Price
Distribution
Promotion
Product
Price
Distribution
Promotion
Chapter 6
Multisegment Strategy
Firms using the multisegment option (or differentiated marketing) seek to attract buyers in more than one market segment by offering multiple marketing mixes that will appeal to more parts of the total market.
The firm can increase its share of the market by responding to the heterogeneous wants and desires of different segments or submarkets. If the segments have enough buying potential, and the product is successful, the resulting sales increases can more than offset the increased costs of offering multiple marketing mixes.
Chapter 6
Chapter 6
Product
Price
Distribution
Promotion
Chapter 6
Chapter 6
Product
Price
Distribution
Promotion
Chapter 6
Chapter 6
Price
Distribution
Promotion
Product
Price
Distribution
Promotion
Individual Customers
Chapter 6
Chapter 6
Chapter 6
Product
The product is at the core of the marketing strategy. Products refer to more than tangible goods and are usually some combination of goods, services, ideas, and even people. Products in and of themselves are of little value.
The real value a product provides is derived from its ability to deliver benefits that enhance the buyer's situation. Organizations that keep their sights set on developing products, systems, and processes that identify and meet needs of the target market are more likely to be successful.
Chapter 6
Chapter 6
Price
Price can be the most critical, the most visible, and the most over manipulated element of the marketing mix. The manager must set the price correctly to achieve the right balance between customers' needs, alternative solutions, and the firm's need to cover its direct and indirect costs, while also making an acceptable profit. Price is the most flexible element of the marketing mix as it can be adjusted to meet changing market conditions. Price is more than a financial or economic issue; it also has significant social and psychological connotations. There are two points of view to consider with regard to price.
To the marketer, price is the amount of money that the firm is willing to accept in exchange for a product. To customers, price is anything they are willing to give up in exchange for the product.
Chapter 6
Chapter 6
Promotion
Promotion activities are necessary to communicate the features and benefits of a product to its intended target market(s).
The role of advertising, sales promotion, personal selling, and public relations (elements of the promotional mix) in a particular marketing strategy will vary depending on the nature of the product.
The role of promotion mix elements also varies by stage in the product purchase process (awareness, interest, desire, and action).
Promotion mix decisions are affected by price, as lower priced products tend to have a lower profitability per unit that would dictate advertising while higher priced products include a level of margin that makes covering the costs of personal selling feasible.
Chapter 6
Promotion Strategies
Push Strategy
Producer
Marketing Communications
Resellers
Marketing Communications
End Users
Pull Strategy
Marketing Communications
Producer
Request Products
Resellers
Request Products
End Users
Chapter 6
Distribution (Place)
Distribution refers to both of the following:
Marketing channelsa system of organizations through which a product, resources, information, and/or product ownership flows from producer to customers. Physical distributionmoving products to the right place in the right quantities at the right time, and in a costefficient manner.
Logistics strategies address physical distribution issues, such as transportation, storage, materials handling, and the systems and equipment necessary for these functions.
A good distribution strategy is essential because once a channel is selected and commitments are made, distribution often becomes highly inflexible due to longterm contracts, investments, and commitments with channel members.
Chapter 6
Chapter 6
Chapter 6
Marketers can manipulate the marketing mix elements to position and enhance a product's image (typically through promotion activities) in consumers' minds.
Chapter 6
Chapter 6