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