Studied by 0 people
Looks like no one added any tags here yet for you.
Consumer Market
o Also called B2C Market (Business to Consumer Market)
o it is the end consumers of various merchandise like products that are purchased by the consumer for their own or household usage that constitutes the consumer market
Business Market
o defined as a market where output of one form goes either as raw material, or as processed goods, or as consumable goods into another industry
o also called B2B Market (Business to Business market)
o buyers buy goods to resell at some point of time for profit to some other business buyer.
Institutional Market
o the purchase is done by institutions, organizations.
o The purchase is bulk just like business market.
o not for profit making
o not for reselling to any third party
Ten Types of Entities
Goods
Services
Experiences.
Events
Persons
Places
Properties
Organizations
Information
Ideas
Ideas
Every market offering has a basic idea at its core. In essence, products and services are platforms for delivering some idea or benefit to satisfy a core need
Internal Factors
- close to the company because they have a direct impact on the organization's strategy
- they are controllable by the organization, whether completely or partially.
- These factors include competitors, customers, employees, the suppliers to the organization and the various shareholders in the organization
Marketing and Selling
Selling
Marketing
Product
Business Model Templates
- Has nine (9) different blocks or constituents
o Customer segment - customer
o Value proposition - value to the customer
o Various channel - how to reach the customer
o Customer relations - how to develop and maintain relationships with customer
o Revenue stream - what will be the revenue cost and hence the net earnings
o Key resources - what assets are required to deliver this value
o Key activities - what activities need to be carried out to provide value to the customers
o Key partnership - what activities they do in-house and what they outsource
o Cost structure - what are the different costs incurred to operate the business
Target segment
A consumer group on which the marketer wants to focus for their marketing efforts
Supply chain
It includes all activities and processes (including organizations, resources and people) involved in transportation of goods from the manufacturer / supplier to the end consumer
Marketing channels
The means through which the products reach the end consumer from the marketers' site.
Market Segmentation
- an increasingly important part of a strong marketing strategy and can make all the difference for companies in competitive market landscapes, such as ecommerce.
- offers an opportunity to pinpoint exactly what messaging will drive your customers to make a purchase
Bases for Segmentation
· Demographic (who)
. · Psychographic (why)
· Geographic (where)
· Behavioral (how)
Demographic (who)
o This is perhaps the most straightforward way of defining customer groups, but it remains powerful.
o looks at identifiable non-character traits such as:
§ age
§ gender
§ ethnicity
§ income
§ level of education
§ religion
§ profession or role in a company
Psychographic (why)
o Focused on your customers' personalities and interests
§ Personality traits
§ Hobbies
§ Life goals
§ Values
§ Beliefs
§ Lifestyles
Conditions for effective segmentation
- The total market should be heterogeneous. However, each of the identified segments must be homogeneous (within the segment
- There should be enough potential customers in each of the identified segments for the business to be profitable. Too small a segment becomes infeasible from the company's perspective.
- The customers within the segment should be willing and should have the ability to buy the product.
- The final condition is that marketers should be able communicate effectively with the customers. It must be possible to effectively reach the target segment.
Targeting
- also known as multisegmented marketing
- a marketing strategy that involves identifying specific personas or markets for specific content
- means selecting one or more identified segments and concentrating on those segments rather than the whole market.
Target Strategies
Demographic Targeting
Geographic targeting
Psychological and behavioral targeting
Demographic Targeting
- based on age, gender, ethnicity, race, income, education, religion, economic status and more, and are extremely commonly used in all types of marketing.
Psychological and behavioral targeting
- uses personality traits, previous purchases, favorite places, shopping habits, "Likes" on Facebook or Twitter, opinions, etc.
Targeting Strategies
Single Segment Concentration
Selective Specialization
Product Specialization
Market Specialization
Full Market Coverage
Single Segment Concentration
focusing on one segment (Example: Company decides to focus on adult ladies, that is, 25 to 35 age and cosmetics)
Selective Specialization
which means the focus is on two or three segments which are apparently not related with each other; or you are looking. (Example: cosmetics, apparel, and shoes)
Differentiation
- is a marketing tool used to distinguish a product from others in the same category.
- the act of designing a set of meaningful differences to distinguish the company's offerings from competitor's offerings
UNDIFFERENTIATED MARKETING
- Markets which are non-segmented and all consumers have more or less similar needs for a specific product
- assumes the lack of significant differences among the consumers and their requirements.
Differentiation Strategies
Price
Quality
Service
3 Types of Product Differentiation
· Vertical Integration - when two products are similar but priced differently.
· Horizontal Differentiation - occurs regardless of a product's quality or price point. The customer chooses a product or brand according to personal preference.
· Mixed Differentiation - is complex and involves factors of both vertical and horizontal differentiation.
Importance of Product Differentiation
• it allows different brands or companies to gain a competitive advantage in the market.
• If differentiation were unachievable, the bigger companies with economies of scale would always dominate the market because they can undercut smaller producers in terms of price.
• Product differentiation is also a way to control costs for the consumer by maintaining a competitive market.
• Differentiation is also a way for market forces to do their work and keep prices down for the consumer
Service Differentiation
- is the specific way in which a company provides certain services to its customers
- is more common in industries with significant customer-facing interaction
Environment
· Most companies have a customer service department to help clients solve problems and ensure customers have a positive experience with the organization
Convenience
· - Make your services easy to access. Many customers will choose a convenient option over a more complex, though potentially preferable, service
Usability
· Make any products, applications or digital offerings you provide user friendly and as intuitive as possible
Customization
· - Offer customization options when applicable for your products or services
Self - Service
· - Some customers prefer to solve problems or access information on their own without working with a company representative during business hours.
Pricing
Consider inventive pricing structures for your products or services to maximize your impact in the marketplace.
Tips for Differentiating Services
• Consult your customers. The goal of services differentiation is to increase customer engagement and purchasing. Find out what your customers want and implement those specific strategies.
• Speak with your team. Look for opportunities by asking your team and colleagues what they think would improve your competitive edge in services differentiation.
• Have a person answer the phone. If possible, have an employee answer all phone calls rather than an automated answering service. •
• Maintain customer focus. Ensure any services differentiation strategies you choose to use put the customer first.
• Choose a few. Rather than implementing 10 or 15 strategies, look for two or three that will best suit your organization and your customers' needs. •
• Build relationships. Take time to build relationships with your customers to establish loyalty. Many services differentiation strategies help you do this. •
• Track progress. Once you've implemented a services differentiation strategy, track it to ensure it's helping your company meet goals and objectives. •
• Watch your competitors. See what services differentiation choices your competitors are making to ensure you're maintaining your competitive edge in the marketplace.
Personnel Differentiation
- refers that the corporation obtains differential advantage through hiring and training staff better than competitors '.
- requires that a company should select its customer-contact people carefully and train them well.
Competitor
- is anyone who provides the same offering to the same target segment. Competition like brand level, industry level, form level and generic level.
Value Proposition
- The output of such good positioning; a convincing reason why the target group should buy the product
Process of Positioning
1. Determining a Frame of Reference
2. Identifying the optimal Points of Parity and Points of Difference
3. Creating a Brand Mantra to summarize the positioning and essence of the brand.
Frame of Reference
- specifies the various other brands with which a brand competes and defines which brands should be the focus of competitive analysis
Consumer Decision Making Process
· Extensive Problem Solving - the consumer absolutely has no idea about the product category nor has any idea about the brands
· Limited Problem Solving - the consumer may choose to skip a few steps as he may have some idea about the product category, but no idea about the brands involved.
· Routing Problem Solving - the consumer may not follow most of the steps as has complete knowledge about the products and brands involved.
Five Stages of Decision-Making Process
Need Recognition
Pre-purchase information search
Evaluation of Alternatives
Purchase Decision
Post-Purchase Behavior
Post-Purchase Dissonance
- The consumer may regret the purchase
- More common in case of high involvement products
How can marketers reduce dissonance?
- Positioning the product to the right segment of consumers. •
- Educating the consumers on the product/service. •
- Staying in touch with the consumers after the sale, will help marketers understand their post-purchase behavior, which will help them address dissonance.
- Communicating the return and the post sales warranty will help in reducing dissonance to a large extent.
How can consumers reduce dissonance?
- A thorough research on the product/service and its attributes before making the purchase.
- Having clarity on the purpose that the product or service is likely to serve.
- Returning the product before use or during the allowed return period in case of dissatisfaction during usage
Influences of Consumer Behavior
Personal Factors
Cultural Factors
Social Factors
Psychological Factors
Cultural Factors
Culture does influence the way a consumer behaves in a purchase situation. This can be further divided into
• Culture
• Sub-culture
• Social class
Marketing
- the process of planning, executing, and tracking the marketing strategy of an organization
- deals with identifying and meeting human and social needs.
- One of the shortest definitions of marketing is "meeting needs profitably."
- encompasses a broad scope of activities and ideas and thus settling on one definition is difficult
Kotler's Marketing Definition
- it is societal process
o It is process and it is societal. Hence, marketing is a societal process where the marketer satisfies the consumption requirements of the consumers inside the society and hence the starting point, which is the societal process
Different Definitions of Marketing
- Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others
- Marketing is the set of activities, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large
- Marketing is an organizational function and a set of processes for creating, communicating, delivering value for customers and for managing customer relationships in ways that benefit the organizations and its stakeholders
- Marketing is the performance of business activities that directs the flow of goods and services from producer to consumer or user.
Market
- defined as a physical place where potential customers, buyers, and sellers gathered, they gathered together and to buy and sell some goods
- a set of buyers, sellers, intermediaries, and organizations who are involved in the process of exchange.
- the gathering of people for the purchase and sale of provisions, livestock, etc., and the space, it could be open or covered, that is used for the same purpose.
Types of Market
· Consumer Market
· Business Market
· Institutional Market
Goods
· Physical goods constitute the bulk of most countries' production and marketing effort.
Services.
· As economies advance, a growing proportion of their activities are focused on the production of services.
Experiences.
By orchestrating several services and goods, one can create, stage, and market experiences
Events
· Marketers promote time-based events, such as the Olympics, trade shows, sports events, and artistic performances.
Persons.
Celebrity marketing has become a major business. Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other professionals draw help from celebrity marketers.
Places
Cities, states, regions, and nations compete to attract tourists, factories, company headquarters, and new residents
Properties.
Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds).
Organizations
· Organizations actively work to build a strong, favorable image in the mind of their publics.
Information
· The production, packaging, and distribution of information is one of society's major industries.
The Marketing Environment
- consists of a micro-environment such as actors engaged in producing, distributing and promoting its offering
Selling
the act of persuading or influencing a customer to buy a product or service
Marketing
creating a demand in the customers mind so that they will seek you out; a process, and the process involves selling as a promotional tool.
Product
something that is typically created by a company, made in their factory and placed in stores or given to salesmen to sell
Value Chain
Value Chain can be summarized as a chain of activities by which an organization can:
• Get materials
• Create a product
• Market the product; and
• Provide service once product is sold.
Market.
Physical or virtual place where buyers and sellers assemble to carry out business transactions
Marketing.
It is the process of identifying the right customer for you, identifying the requirements of the customers and developing an offering to satisfy the customer.
Marketing management
involves developing an appropriate managerial process to implement the marketing strategy and satisfy the customer
Consumer
Anyone who consumes the product/service that is offered by the marketer
Customer
Anyone who regularly purchases any product / service / brand from any specific store
Segmentation
Process of dividing the market into various homogenous groups based on some common parameters
Positioning
Creating an image in the mind of the target consumers
Marketing mix
A combination of marketing tools to create a marketing strategy.
5Ps
Any of packaging, people, positioning, performance etc.
6Ps
Any of Political power, public opinion, production etc.
7Ps:
- Any of Packaging, process, people, practice, physical evidence etc
Logistics
Physical movement of goods from one location to another. It includes all the commercial activities in the process of transportation
Niche marketing
Focusing on a small customer segment with specific requirements and trying to satisfy the customers at a premium
Segmentation
- The process of dividing the market into various homogeneous groups based on some common parameters
Behavioral (How)
o Possibly the most useful
o Requires a little data to be truly effective
§ Spending habits
§ browsing habits
§ interactions with the brand
§ loyalty to brand
§ previous product ratings
Geographic targeting
- based on a certain location and can be as broad as a country or region, or as specific as a city or neighborhood
Product Specialization
- one product satisfying all the different markets (Example: Having cosmetics for all categories)
Market Specialization
Here the company takes up a particular market segment for supplying all relevant products to the target group; looking up to the needs and wants of one total market in different stages (Example: Target segment are the adult ladies at the elite class)
Full Market Coverage
The full market coverage could be different offers for each of these different segments or it is the same offer for the total market (Example: Even though you are supplying cosmetics to each of these different segments, like teens and adults and elder ladies, but they are different. The cosmetics offering to the teen females is not the same cosmetics that you are offering to adult ladies.)
Marketing differentiation
- is crafting unique products and services to attract and retain customers
Price
one of the most common ways businesses differentiate themselves from competitor
Quality
another common way marketing differentiation occurs
Service
sets many companies apart from their competition, particularly in industries where personal relationships are essential (such as real estate).
Product Differentiation
- It is the characteristic or characteristics that make your product or service stand out to your target audience
- related to the concept of how the marketer differentiates the offer on certain product attributes
- It the process of distinguishing your offering from similar products or services in the market
- a way for products and brands to command market share based on consumer preferences
Differentiation Parameters
1. Product Differentiation
2. Service Differentiation
3. Personnel Differentiation
Types of Service Differentiation
Environment
Customer Service
Branding
Functionality
Reliability
Reputation
Convenience
Usability
Terms
Customization
Self - Service
Options
Pricing
Speed
Customer Service
· The environment in which your customers or clients interact with your organization is a great services differentiation opportunity
Branding
· - includes your slogan or tagline, which your customer service or sales team will likely use when interfacing with customers.
Functionality
By maximizing the functionality of your product or service, you're improving the customer experience with your company
Reliability
· - Keep the services you offer reliable.
Reputation
· Your company's reputation is a key service differentiation option.
Terms
· Some services require contracts with terms and conditions. If your company offers a service like this, keep your terms as simple, concise and straightforward as you can.
Options
· Having choices often entices customers to make not just an initial purchase but also follow up purchases.
