Market StrategyProduct vs. Service vs.

Brand

November 14, 2011

Information Gathering –Sampling

It is unrealistic for any company to research EVERY customer in their target audience, therefore market research relies on sampling

Sample/Sampling A selected portion of a population, representing the broader population A sample of the population is made to try and accurately reflect the

target Target needs to be determined

If Captain Crunch is looking to conduct some market research they need to decide if their intent is to find information about: Kids eating the cereal Parents purchasing the cereal

Sample size must be determined How many people will make up the sample

How to find the people to build the sample

Market Strategy

There are 4 Main Steps in a Marketing Strategy

1. Market Segmentation2. Target Marketing3. Differentiation4. Positioning

Market SegmentationStep 1: Market Segmentation

Dividing larger markets into smaller groups Customers with distinct needs, characteristics,

behaviors Demographics Geography Psychographics Behavior

Market TargetingStep 2: Market Targeting

Choosing a Market Segment Which segments to pursue that deliver the most

benefits to the company

Evaluate based on Size

Current size and potential for growth Structure

Competitive environment – too competitive already? Who are the consumers? Price opportunities?

Company Goals Which segments best align with company goals?

Market Targeting Strategies

Companies use different strategies for market targeting

Undifferentiated Marketing Differentiated Marketing Concentrated Marketing Micromarketing

Market Targeting Strategies

Undifferentiated Marketing Mass Marketing – everyone in the market is reachedDifferentiated Marketing Segmented marketing – a specific target is chosen and

marketing efforts (and often products) are created to for itConcentrated Marketing Niche marketing (a form of differentiated marketing) Small, very specific market segments are chosen but a large

share of those smaller segments are targetedMicromarketing Local marketing – tailored marketing efforts or products to

specific geographical locations Individual marketing – customization of products or

marketing to individual customers

Differentiation

DifferentiationStep 3: Differentiation

Value Proposition – needs to be distinct compared to competitors

Competitive Advantage The product/service has to stand out

differently from the competition Gained by offering some sort of greater

customer value Premium quality Excellent customer service Lowest prices Best customer experience

Positioning

PositioningStep 4: Positioning

The space a product/service holds in a consumers mind Based on key attributes of the product/service Perceptions, impressions, feelings a consumer has

for a product vs. other similar products

Takes the competitive advantages and creates a position Considers all advantages but usually only one or

two are chosen for positioning

Positioning

Picking differentiators/advantages worth promoting is based on the degree to which it is:

Important -- It delivers a highly valued benefit to target buyers

Distinctive -- Competitors don't offer the same benefit Superior -- It is better than alternatives Communicable -- Buyers can identify and understand it Preemptive -- It can't easily be copied by competitors Affordable -- Customers are able to pay for it Profitable -- It can make money for the company

Positioning Strategy

All based on and in line with the Value Proposition

“More for More” strategy High quality and service therefore high prices for

the customers Mercedes, Gary Danko, Ritz Carlton

“More for the Same” strategy Premium quality or service at the same price as

lesser alternatives Lexus, Nordstrom, In n’Out

Positioning Strategy

“The Same for Less” strategy A lower-price alternative for quality equal to competitor

products Dell, Burlington Coat Factory, Target Brand

“Less for Much Less” strategy The product quality or service could be inferior to

alternatives but customers pay a much lower price than competitors

Southwest, Super Cuts

“More for Less” strategy A higher quality or service for a lower price than competition Home Depot, Barnes and Noble

Positioning Statement

Once positioning is clear the company has to deliver on the promise Communicating the Value Proposition (directly or

indirectly) through ads/promotions A positioning statement is created to clearly

define the positioning (for the whole company, all employees) Includes information about the target segment

and need, the brand, the product concept, and the differentiating elements

A well defined Positioning Statement:

Defines the business you are in Defines your (very important) customers Identifies your competition Identifies your differentiation factor

what differentiates you from your competition Defines your value proposition

the value your product or service offers your customers

Positioning Statement

For [target end user] Who wants/needs [compelling reason to buy] The [product name] is a [product category] That provides [key benefit]. Unlike [main competitor], The [product name] [key differentiation]

The positioning statement is grounded in reality Not an "image" or "posture“ A position that is based on actual accomplishments and

relationships. It is for internal use, most companies don’t release their

positioning statements but you can figure them out through their marketing efforts

Positioning Statement

Burger King Have it your way Flame broiled burgers

Trident Gum 4 out of 5 dentists …..

Glad Trash Bags Stronger with less plastic waste

Positioning Statement

The iPad The iPad “is so much more intimate than a

laptop, and it’s so much more capable than a smartphone with its gorgeous screen,”

Clearly positions the iPad between the two giants of the mobile devices industry the smartphone and the laptop

Clearly presents the competitive advantage over each

Positioning Statement

Products and Services

Product vs. Service

Product Anything that can be offered to prospective

customers for their acquisition, use, or consumption in order to possibly satisfy a need or want (tangible)

Products are produced, then stored, later sold, and still later consumed.

Service A form of product offering that consists of intangible

activities or benefits that do not result directly in the ownership of any physical property or material

Services are first sold, then produced and consumed at the same time.

Consumer Products

Because of there are so many different variety of products available, marketers divide them into categories

Convenience products Shopping products Specialty products Unsought products

Consumer Products

Convenience products Products and services that customers usually

buy frequently and with a minimum of comparison and buying effort

dish detergent, paper towels, candy, and fast food.

Shopping products Purchased less frequently, time is spent

gathering information about these products Furniture, clothing, home electronics, hotels

and airline travel

Consumer Products

Specialty products Not usually compared to other products,

viewed as the best and worth the effort and to acquire

Designer clothes, sports cars, law services, watches

Unsought products Consumers either do not know about or have

not thought about purchasing New technology, Life insurance and pre-

planned funeral services.

Services

Services make up 64% of the gross world product

Estimated that 4 out 5 jobs in the US will be in the service industry Marketing is a service

There a four service characteristics1. Intangibility2. Inseparability3. Variability4. Perishability

Service Characteristics

Intangibility Not physical things that can be seen, felt, touched,

tasted, heard, or smelled before they are bought Travel Entertainment

Service inseparability The services can't be separated from their providers The customer is present for the production of the

product Business consultant, Health care provider Beauty

Service Characteristics

Service variability The quality of services depends on who provides them When, where, and how those services are provided

One person’s experience at a Jiffy Lube most likely varies than another’s at a different Jiffy Lube

Service perishability Services can't be stored for sale or use at a later time The service value exists only at the point when the service

is made available Spas, doctors, personal trainers

Will charge you for missing appointments

Supply/Demand fluctuates based on time of day, weather, time of year Vacation destinations (hotels, ski resorts, scuba diving)

Brand

Brand

The collective sum of all experiences each customer has with that company Names, terms, slogans, signs, symbols, designs,

concepts A customers' first hearing the name of the company Every experience a customer has talking to or

meeting with company salespeople or representatives Every store and shopping experience Every product purchase and use Every Web search and website visit, Every advertisement they read, see, or hear

All of these experiences can either help build and strengthen that company's brand or help break it down and diminish the brand

Branding

The active development and management of a company's brand

Branding is a part of the marketing mix Branding plays a vital role in customer

relationships because brands are made up of customer experiences with a company

People often make purchases based upon the reputation of the brand they choose to buy from high-quality products great customer service trusted source, perceived expert in its

Branding

Companies can position their brand based on: Product Attributes

Product attributes can be easily copied making them less relevant

Burger King, kiehls Desirable Benefits

Associating the company name with a desirable benefit Activia, Fructise shampoo

Beliefs and Values Engage customers on a deep, emotional level. Nike "Just Do It“ Coffee Cadillac – when you turn your car on, does it return the

favor?

Brand Name

Good names should do the following:1. Suggest something about the product's benefits and qualities

24 Hour Fitness, MySpace.com, or Super Glue

2. Be easy to pronounce, recognize, and remember Tide, Silk

3. Be distinctive Lexus, Zippo, YouTube.com

4. Allow for extension of the company's product or service offerings Amazon.com - began as an online bookseller, now sells just about

everything

5. Translate well into other languages

6. Be capable of registration and legal protection It isn’t already taken by someone else

Homework

1. Use your magazine and identify 4 different products Convenience products Shopping products Specialty products Unsought products Take a picture of each ad, upload to a ppt document,

identify each product and why it fits into each category If you can’t find ads in your magazine you can look online

and take a screen grab – must find at least 2 in the magazine

2. With your boat group create a company name Conduct a brainstorm and really talk about the names, review the 6

points of naming a brand Hand in the notes from the brainstorm, list of all original names List of the top 10 names and why they were chosen and then discarded

3. Do a SWOT analysis of YOUR specific business unit Consider the micro and macro environments

4. Read Module 7