Principles Of Marketing AT

Market segmentation

%%-**Market segmentation **%% The process of ==diving a target market into smaller more defined categories==. It segments customers and audiences into groups that ==share similar characteristics such as demographics, interests, needs, or location.==

-The importance of market segmentation is that it ==makes it easier to focus marketing efforts and resources on reaching the most valuable audiences== and achieving business goals.

-Market segmentation allows you to get to ==know your customers, identify what is needed in your market segment,== and determine ==how you can best meet those needs with your product or service== This helps you design and ==execute better marketing strategies from top to bottom.==

5 Benefits Of Market Segmentation

%%1.Improves Campaign Performance%% - Help you to improve the performance of ==your marketing campaigns by helping you to target the right people== with the right messaging at the right time.

%%2. Informs Product Development%% - Help companies to develop products that ==better meet the needs of their customers.== Designing your products with %%t%%==he needs of your customers in mind will help you to sell more and will make your customers happier==%%.%% Your customers will also $feel like you understand their needs, improving your company's reputation.$

%%3. Reveals Areas To Expand -%% Help businesses to ==identify audience segments that they are not currently reaching with their marketing== efforts and then expand into new markets.

%%4. Improves Business Focus%% - Help businesses to ==focus their efforts, which enables them to establish a brand identity and specialize in a particular type of products.==

%%5. Informs Other Business Decisions%% -Help to inform other ==important business decisions. regarding how you get your product to customers.== These decisions may ==involve matters such as pricing and distribution==

4 Type of Market Segmentation

%%DEMOGRAPHIC SEGMENTATION%%

• %%DEMOGRAPHIC SEGMENTATION%% the ==most common method of market segmentation.== This approach is also called ==socioeconomic segmentation==
• %%Demographic segementation%% defines ==consumer groups according to demographic variables such as age, sex, income, occupation,== education, household/family size and stage in the family lifecycle, religion, nationality and race.

%%-Segmenting by Gender%% is an ==obvious variable that help define the market for certain products== like lipstick for women and facial shaving products for men.

%%-Segmenting by Age %% seems an ==easy distinction to make baby foods for babies, retirement communities for seniors.==

%%-Segmenting by Family Size%% determined by the number of family members. $The needs of a two-member family for instance are different from those of a six-member family$. ==This variable is recognized by a car manufacturers when five seater cars and eight-seater vans are simultaneously sold in the market==

%%-Segmenting by Income and Expenditure Patterns:%%

1. High income group
2. Middle income group
3. Low income group

BEHAVIORAL SEGMENTATION

• %%-BEHAVIORAL SEGMENTATION%% a term that refers to %%t%%==he grouping of buyers on the basis of their knowledge, attitude, use or response to a product.== Buyer behavior may be segmented according to various categories namely:

1. %%Purchase Occasion -%% It calls for ==grouping of buyers according to occasion when they get the idea, make a purchase, or use a product.==

(Ex. The purchase of books, notebooks and pencils is made heavily during enrolment periods in school.)

1. %%Benefit Sought %%- Consumer ==seek various benefits in the products they buy-high quality, low price==%%.%% status, sex appeal good taste, health conscious.

(Ex. Jollibee originally differentiated its burgers by proclaiming them to be "langhap-sarap" appealing to a typical Filipino behavior of smelling food to fully appreciate it before eating it.)

1. %%User Status%%- It may be classified as follows

• ==Sole Users== are the $most "brand" loyal and require the least amount of marketing gimmicks.$
• ==Semi-Sole== users typically use $Brand A but have an alternate selection if it is not available or if the alterative is promoted with a discount.$
• ==Aware nontriers== use c$ompetitive products in the category but haven't taken a liking to Brand A.$
• ==Trial-Rejectors== bought $brand A's advertising message, but didn't like the product.$
• ==Repertoire users== perceive $two or more brands to have superior attributes and will buy at full price.$

-In other reference, user status may be classified namely: (1) Non-users. (2) Ex-users. (3) Potential users, (4) First-time users and (5) Regular users.

4. %%Usage Rate%% It is done by classifying buyers into:

• ==Light-users==
• ==Medium-users==
• ==Heavy-users==

-Often times, the very few heavy-users of a product consume more than the very many light-users. As companies are more interested in sales volume, marketing strategies are devised to attract the heavy users in the purchase of specific brands Also, light-users are urged to become heavy-users.

5. %%Loyalty Status%% - Buyers may also be ==grouped according to their loyalty to particular brands.== They may be classified as follows

• Those who buy $only one brand of a product;$
• Those who buy $two or three brands:$
• Those who $shift from one brand to another;$
• Those who have $no brand preference.$

5. %%Readiness Stage%%- This may be categorized into the following stages:

• people who are $unaware of the product,$
• people who are $aware of the product;$
• people who are $informed of the product;$
• people who are $interested in the product;$
• people who $desires the product:$
• people who $want to buy the product.$

-From the point of view of the marketer, the last stage refers to people who are most prepared to buy

7. %%Attitude Towards Product %%- This may be classified according to their "==degree of enthusiasm==." The ==enthusiastic attitude is most desired== by marketers while ==the hostile one is the most unwanted.==

• people who have an $enthusiastic attitude towards the product:$
• people who have a $positive attitude towards the product;$
• people who have an $indifferent attitude towards the product$
• people who have an $negative attitude towards the product$
• people who have an $hostile attitude towards the product You sent$

GEOGRAPHIC SEGMENTAION

%%-**GEOGRAPHIC SEGMENTAION **%%it requires ==dividing the market into different geographical units like nations, regions, provinces, cities, towns or barangays==. The physical location of market, including the general characteristics of the location. This includes factors such as climate (e.g., Baguio City offers a cooler overall climate), traffic condition, cultural c==haracteristics that are inherent in a geographical area, five livehood opportunities and population density.==

%%•GEOGRAPHIC VARIABLES%%

1. ==Region==%%-%% people in %%one region of the country (or the world) have needs, wants, and purchasing habits that differ from those in other region.%%
2. ==Country size==
3. ==Climate==%%-%% People in Sun Belt states, for example may buy suntan lotions. Canadian buy equipment for dealing with snow and ice - products many Floridians have never seen in stores.
4. ==City size==- $Many products sell well in urban areas and poorly in suburban or rural ones, and vice versa$
5. ==Population density-== the $number of people per square mile$
6. ==Proximity marketing ==- is an i$nteresting new technology firms$ are u$sing to segment buyers geographically and target them within a few hundred feet of their businesses using wireless technology$. In some areas, you can switch your mobile phone to a "discoverable mode." while you're shopping and, if you want, get ads and deals from stores as you pass by them. And it's often less expensive than hiring people to hand you a flier as you walk by.

%%•GEOGRAPHIC INFORMATION SYSTEM%%

-Once used in military, (GISS) are ==computer systems that assemble, store, manipulate, and display data by their location==%%.%% GISS ==simplify the job of analyzing marketing information by relating data to their locations.== The result is a geographic map overlaid with digital data about consumers in a particular area.

PSYCHOGRAPHIC SEGMENTATION

--%%PSYCHOGRAPHIC SEGMENTATION%% refers to ==how consumers see and feel about themselves hence psycho or "of the mind".== It includes elements such as social class, lifestyle, and personality. ==If you are segmenting the market by whether or not they are adventurous, idealistic,== how they feel about a particular issue, or who they aspire to be. then these are all factors that reside primarily in the people's mind. ==Psychographic data is not captured by the National Statistics Office,== so the way to determine how many people fit into a ==particular psychographic profile is generally through primary research methods such as survey Psychographic Segmentation can be segmented in societal division, lifestyle, and personality.==

MARKETING INFORMATION SYSTEM (MKIS)

%%MARKETING INFORMATION SYSTEM%% refers to the ==systematic collection, analysis, interpretation, storage and dissemination of the market information, from both the internal and external sources, to the marketers on a regular. continuous basis.== The ==marketing information system distributes the relevant information to the marketers who can make the efficient decisions related to the marketing operatio==ns, namely; pricing, packaging, new product development, distribution. media, promotion, etc.

COMPONENTS OF MARKETING INFORMATION SYSTEM

1. %%Internal Records:%%

• The Company can ==collect information through its internal records comprising of sales data== customer database, product database, financial data, operations data, etc. The information can ==be collected from the documents such as invoices, transmit copies, billing documents prepared by the firms== once they receive the order for the goods and services from the customers, dealers or the sales representatives.

• ==The current sales data should be maintained on a regular basis that serves as an aide to the Marketing Information System== The reports on current sales and the inventory levels help the management to decide on its objectives and the marketers can make use of this information to design their future sales strategy.

• The Companies maintain several databases such as

1. ==Customer Database ==where in the $complete information about the customer's name, address phone number, the frequency of purchase, financial position, etc. is saved$
2. ==Product Database- ==wherein the $complete information about the product's price, features, variants, is stored.$
3. ==Salesperson database, ==wherein the c$omplete information about the salesperson, his name, address, phone number, sales target, etc. is saved.$

• The companies store their data in th%%e%% ==data warehouse from where the data can be retrieved anytime the need arises.== Once the data is stored, the statistical experts mine it by applying s==everal computer software and techniques to convert it into meaningful information that gives facts and figures.==

%%2. Marketing Intelligence System:%%

•%%The marketing intelligence system%% provides ==the data about the happenings in the market==, i.e. data related to the marketing environment which is ==external to the organization==. It includes the information about the ==changing market trends, competitor's pricing strategy, change in the customer's tastes and preferences,== new ==products launched in the market, promotion strategy of the competitor, etc.==

•In order to have an efficient marketing Information System, the companies should work aggressively to improve the ==marketing intelligence system by taking the following steps:==

I. Providing the $proper training and motivating the sales force to keep a check on the market trends$%%,%% i.e. the change in the tastes and preferences of customers and give suggestions on the improvements, if any.

II$. Motivating the channel partners, namely, dealer, distributors, retailers$ who are in the actual market to provide the relevant and necessary information about the customers and the competitors.

III. The companies can also $improve their marketing intelligence system by getting more and more information about the competitors$%%.%% This can be done either by $purchasing the competitor's product. attending the trade shows,$ reading the competitor's published articles in magazines, journals, financial reports.

IV. The companies can have an efficient marketing information system by involving the $loyal customers in the customer advisory panel who can share their experience and give advice to the new potential customers.$

V. $The companies can make use of the government data to improve its marketing information system.$ The data can be related to the population trends, demographic characteristics, agricultural production etc. that help an organization to plan its marketing operations accordingly.

VI. Also, the companies can $purchase the information about the marketing environment from the research companies who carry out the researches on all the players in the market .$

VII. The Marketing Intelligence system can be $further improved by asking the customers directly about their experience with the product or service via feedback forms that can be filled online.$

3. %%Marketing Research The Marketing:%%

•Research is the ==systematic collection, organization, analysis and interpretation of the primary or the secondary data to find out the solutions to the marketing problems==%%.%% Several Companies conduct marketing research to analyze the marketing environment comprising of changes in the customer's tastes and preferences, competitor's strategies. ==the scope of new product launch, etc by applying several statistical tools.== In order to conduct the market research the data is to be collected that can be either primary data (the first-hand data) or the secondary data (second-hand data available in books, research reports, journals, etc). The secondary data are publicly available, but the ==primary data is to be collected by the researcher through certain methods such as questionnaires, personal interviews. surveys, seminars. etc.== A ==marketing research contributes a lot in the marketing information system as it provides the factual data that has been tested several times by the researchers.==

%%4. Marketing Decision Support System%%:

• %%Marketing Decision Support System %%includes several ==software programs that can be used by the marketers to analyze the data, collected== so far, to take better marketing decisions ==With the use of computers, the marking managers can save the huge data in a tabular form and can apply statistical programs to analyze the data and make the decisions in line with the findings==%%.%% Thus, the marketers need to keep a check on the marketing environment, ie. both the internal (within the organization) and the external (outside the organization, so that marketing policies, procedures, strategies can be designed accordingly.

Marketing Mix 4P’s

•The %%4 P's of marketing%% are product, price, place, and promotion. The 4 P's of marketing, also known as the marketing mix, ==are essential in helping a company to make necessary decisions in order to launch a successful product.==

THE 4P's of MARKETING

1. %%PRODUCT%%

•It is ==anything offered for sale by a firm or business to buyers to satisfy their physical, social, symbolic, and psychological wants and needs.==

• A product can be either ==a tangible good or an intangible service== that fulfills a need or want of consumers.

*may take any of the following forms:

==•Products==

1. $A physical object$ (ex. Toy, kilo of pork)
2. $A service ($ex, dental check-up, massage)
3. $A place$ (ex. Boracay, London)
4. $An organization$ (ex. Knights of Columbus, Philippine Marketing Association)
5. $An idea$ (ex. Pro-life)
6. $A personality$ (Evita Peron or Efren "Bata" Reyes)

==• Products may be classified into two categories:==

(1) C$onsumer good$s and (2) i$ndustrial goods.$

2. %%PRICE%%

%%•Price%% is the ==money, good and service exchanged for the ownership or use of a good== and/or service.

•Once a ==concrete understanding of the product offering is established we can start making some pricing decisions.==

• Price determinations wil==l impact profit margins, supply, demand and marketing strategy==%%.%% Similar (concept) products and brands may need to be positioned differently based on varying price points. while price elasticity considerations may influence our next two Ps.

==• Pricing objectives:==

• $Sales-oriented$
• $Profit-oriented$
• $Status quo-oriented$

%%3.PROMOTION%%

%%•Promotion %%looks at the ==many ways marketing agencies disseminate relevant product information to consumers and differentiate a particular product or service.==

==• Promotion includes elements like:==

• $Advertising$
• $Public Relations$
• $Social media marketing$
• $E-mail marketing$
• $Search engine marketing$
• $Video marketing$

1. %%PLACE%%

•Often you will hear marketers saying that marketing is about putting ==the right product, at the night price, at the right place, at the right time.== It's critical then, to evaluate what the ideal locations are to convert potential clients into actual clients Today even in situations where the actual transaction doesn't happen on the web, the initial place potential clients are engaged and converted is online.

==•When a company makes decisions regarding place,== they are trying to determine where they should sell a product and how to deliver the product to the market. The goal of business executives is always to get their products in front of the consumers that are the most likely to buy them.

•In some cases, this may refer to placing a product in certain stores. but it also refers to the product's placement on a specific store's display in some cases, placement may refer to the act of including a product on television shows, in films, or on web pages in order to garner attention for the product.

STEPS IN PRODUCT DEVELOPMENT

• %%Idea Generation%% %%-%% initial stage wherein those ==involved determine the new product to be offered to the market==$,$ which begins by ==gathering ideas through brainstorming.==
• %%Idea Screening%% -ideas gathered are screened and evaluated. ==The objective is to eliminate poor and weak ideas and must choose the most feasible idea== taking into consideration the company resources.
• %%Product Concept Developments and Concept Testing %%-new product idea is ==concretized into meaningful and understandable terms==. After product concept development is the concept testing, ==where product concept is tested to groups of target audience or market so as to determine if the concept has indeed an excellent consumer appeal.==
• %%Market Strategy%% %%-%%consists of ==the strategy for the new product, its price, the strategy on product distribution, and the product promotion to be used.==
• %%Business Analysis%% -analysis of the general situation of a company. T==his is making company assessment by accomplishing what is called the Strengths, Weaknesses, Opportunities. Threats== (SWOT) Analysis. Doing this type of evaluation will help the company to fully understand what it has to offer against what it needs to enhance.

==a. Strengths== - are known as $Internal Positive$. They refer to the $various resources that the company has such as capital, manpower, equipment, raw materials$, and a good method or system of doing things. $Abundant supply of these resources and having them in good quality are considered strengths of the company.$

==b. Weaknesses== - are known as $Internal Negative$. These refer to %%r%%$esources that a company does not have or resources in limited supply such as the lack of manpower or equipment$; thus, making it difficult for the company to aggressively compete in the marketplace.

==C. Opportunitie====s== - are recognized as $External Positive$. Opportunities are $challenges in the market that a company may consider to exploit to its advantage if it has sufficient and good resources that it can utilize in order to compete.$

==d. Threats== - are $obstacles that may hinder a company or limit its capabilities to achieve its goal.$ These are conditions outside the company, which a company does not have the power to control These conditions or situations may have an impact to the company's operations. Therefore, the company must be prepared to eliminate or avoid threats.

• %%Budget %%-is the ==capital involved in the process==. All aspect of product development, including product distribution and promotion, involve budget.
• %%Product Development%% - the stage where ==actual production of the product is done.==
• %%Test Marketing%% - is done in order for the ==company to know product acceptability of the market before going to full commercialization.== Majority of companies produce and distribute products to selected geographical location only. However, if the company is very confident about its new product, it may provide little or no test marketing at all.
• %%Full Commercialization %%- full-scale production and distribution are achieved at this stage. It is expected that at this stage, the ==company is now ready to face its competitors with great hope that the new product can provide not only profit on its part, but also satisfaction of the needs and wants of its potential market.==

PRODUCT LIFE CYCLE

•A %%product life cycle%% is ==the amount of time a product goes from being introduced into the market until it's taken off the shelves==

•There are ==four stages in a product's life cycle-introduction, growth, maturity, and decline.== The concept of product life cycle helps ==inform business decision-making from pricing and promotion to expansion or cost-cutting==

•Newer, more successful products push older ones out of the market

1. ==Introduction: ==This phase $generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits$
2. ==Growth:== If $the product is successful, it then moves to the growth stage.$ This is characterized by growing demand, $an increase in production, and expansion in its availability.$
3. ==Maturity:== This is the $most profitable stage, while the costs of producing and marketing decline.$
4. ==Decline==: A product takes on %%i%%$ncreased competition as other companies emulate its success- sometimes with enhancements or lower prices. The product may lose market share and begin its decline$

CONSUMER PRODUCTS

%%-CONSUMER PRODUCTS%% are intended for ==consumer market or end users who purchase for their personal consumption or family consumption.==

1. %%Convenience Products %%- are products which are ==purchased frequently, and immediately and with minimum efforts because these products are available anywhere and anytime.==

For example newspaper, toothpaste, washing-detergent, cigarette, tobacco, etc. Convenience products can be categorized into:

==•Staple goods ==are those that form $part of consumer's regular consumption$ like rice, coffee, milk, dairy products, soap or shampoo.

==•Emergency goods==-refer to those $products customers purchase during emergency$

Examples are batteries, sanitary napkins or an umbrella - in case of unexpected heavy rain

==•Impulse goods-== those $unplanned product purchases$ like playing cards, chewing gums, razors, and chocolates. $These items are normally placed near the checkout counters of convenience stores or supermarkets$

%%2.Shopping Products%%- products which ==customer purchases less frequently and after careful comparison, on the basis of suitability, quality, price and style, are known as shopping products==.

For example- major appliances, clothing, furniture cars, etc

%%3 Specialty Products%% - products that have ==brand identification or unique characteristics are known as specialty products. Buyers for these goods generally spend more time seeking the product they want than on comparing brands.==

For examples, cars, stereos, television, etc

4. %%Unsought Products%% - %%consumer products that are either not known to the consumers are known, customers generally do not have compelling impulse to buy them products%%

For example-Life insurance, blood donation, etc..

INDUSTRIAL PRODUCTS

%%- **INDUSTRIAL PRODUCTS **%% are ==products that are purchased for further processing or for use business in operating.==

1. %%Materials and Parts%%

   ==A.== ==Raw materials== - consists of $products necessary to produce another products.$ For instance, potatoes, salt, and cooking oil are raw material for a company that produces chips such as Pos and Lays.

   ==B.== ==Parts and Materials== - products that $become a part or component of a finished product$. Examples include paper used by publishing companies to produce books, magazines or newspapers.

2. %%Capital Products%%

==a.== ==Installations== - $consists of buildings and land, and major equipment$ like tractors, printing machines, and generators.

==b.== ==Accessory equipmen==t - %%p%%$roducts used by businesses necessary for their operation, but not as part of the finished products.$ Examples are computers, cash register machines. freezers, and air conditioning units

3. %%Supplies and Services%%

==a.== ==Supplies -== include $operating maintenance supplies supplies$ like pens, paper, brooms, and other cleaning.

==b.== ==Services== - include $legal assistance, auditing services management consulting, and services of advertising agencies that are normally provided by other business groups$

PRODUCT BRANDING

%%•Brand%%- composed of ==the name of the product and the logo or design that represents the product== speaks about certain attributes of a product that consumers are looking for

%%•Brand Name%%%%-%% word or ==words that represent the produ==ct

%%•Brand Mark%% %%-%% design t==hat goes with the brand name. It is recognizable but cannot be uttere==d.

==*Criteria in Choosing a Brand Name==

1. $Must be distinct$
2. $Easy to pronounce and remember$
3. $Possibility of product expansion$

==*Benefits of Product Branding==

1. $Able to distinguish one product from another$
2. $Able to sue unscrupulous business people who copy the brand name of leading product manufacturer$
3. $Can communicate the benefits of the product offered to the market$

PRODUCT PACKAGING

%%•Packaging%%-refers to the ==process of making the wrapper, covering, or container of a product or the product package. It involves the product's Product==

%%•Package%% - refers to ==the container used by the company to design==, package color and packaging materials to be used protect. promote, and transport its product. It has a product label or insert

%%•Labe%%l - part of a ==product package that contains information about the product that target what customers need to know, l==ike the ingredients used to produce the product, the instructions for use, safety information, or precautions in the case of chemicals, medicines, and toys. manufacturing date and expiration date, manufacturer's name address and logo.

PRICING OBJECTIVES

1. %%Meet their profit objective%% %%-%% Every company sets a ==specific profit target for a particular product at a particular time. This profit objective or target becomes the motivating force for companies' marketing efforts.==
2. %%Maintain or improve market share%% - ==Right pricing scheme can enormously build customer traff==ic and an important factor for brand shift decision of a market.
3. %%Control entry of new players in the market offering competing brands %%- Companies do this by ==offering low prices and sometimes much lower than industry standard.==

•IMPORTANCE OF PRICE

%%1 Price dictates product demand%% - ==Market patronizes products because of their prices.== Some factors must be considered==, like product quality and type of services given to customers by the company's staff==

%%2. Price determines the level of expenditures of the market%% - ==Price influences buyers' decision whether to buy the product or not.==

PRICING STRATEGIES

1. %%Pricing in relation to product quality%%

   ==a.== ==Premium pricing strategy== - involves setting $high price to products with high quality$

   ==b====. Economy pricing strategy== - involves setting the $price low because the product is of low quality.$

   ==c.== ==Value pricing strategy== -companies that offer the same $high quality products but offer the customers with more value for their money$

   ==d.== ==Overcharging pricing strategy== -products are $priced high but the quality of the products is lo$w

2. %%Other pricing strategies%%

   ==a.== ==Penetration pricing strategy== - involves setting $low initial price for new products offered in the market. The objective is to be able to enter the market immediately$

   ==b.== ==Market skimming pricing strategy== - involves setting $high initial price for a product or services offered. and after a definite period of time, companies either lower the price of the offering or maintain its price$

   ==c.== ==Bundle pricing strategy== - involves setting $one price for a set of complimentary products$. For example, spaghetti pasta and spaghetti sauce are bundled and given a price of P100

   ==d.== ==Geographical pricing strategy== - involves setting $price differently in different locations.$ Producers of goods or channels of distribution like wholesalers set geographical pricing scheme due to shipping cost or transport cost.

$*Zoning pricing$ - the seller set up zones where markets @@within the zone pay the same price for the products.@@ The farther the distance of the market from the seller's zone, the higher will be the product price

$*Freight absorption pricing$ - s@@ellers shoulder part, if not, the entire cost of the freigh@@t. Some companies practiced this belief that distribution cost will be compensated by business done in volume.

REASONS FOR PRICE CHANGE

%%•COMPANIES CUT PRICE WHEN:%%

*There is ==excess capacity==

*There is ==continuous decrease in market share==

*Competitors ==lower their price offerin==g and other ==companies believe that it is advantageous to their companies to follow the price decrease==

*Company desires to ==regain lost market share and gain more customers==

*Company is ==anticipating new product model or design==

%%•COMPANIES INCREASE PRICE WHEN:%%

*There is a desire to ==increase profit==

*There is ==high demand for the product==

*There is i==ncrease in the cost of raw materials or labor cost==