Market Segmentation
Gillette Mach 3 Turbo has been particularly produced for higher income consumers. Thus, we see that income segmentation has been the main factor when Gillette decided to segment the market. Mach 3 Turbo has also been successful in those countries where the major segment of the population considers shaving to be a desirable activity and the means to look clean and sophisticated for example India and America. Thus, this type of international segmentation has also benefited Mach 3 Turbo. Another interesting to note is that, Gillette after seeing the success of the Mach 3 Turbo, decided to offer a similar product for women. Thus, Venus Power came into existence. So, Gillette also gender segmentation.
Target Marketing
Gillette Mach 3 Turbo’s market segment has proved to be extremely attractive and profitable for the company. The segment size is increasing at a rapid pace in India and America. Furthermore, the segment is made more attractive because of the fact that there are no strong and popular competitors of Mach 3 Turbo. This has provided Mach 3 Turbo with a lot of market power.
Substitute products like shaving machines are not considered as suitable enough to replace Mach 3 Turbo. The high price of Mach 3 Turbo proves that customers do not have enough power to reject the product and that the company is in a far stronger position than its suppliers and its customers. The company’s objective that Mach 3 Turbo should be considered by the customers as the best shaving product has been complimented by the investment of a lot of money in the product in terms of increased promotion and advertising.
Selecting Target Segments
Mach 3 Turbo’s marketing strategy was differentiated marketing from the beginning. Gillette wanted to differentiate it from other shaving products and to target several market segments. Some segments purchased Mach 3 Turbo because of the income factor. Some did because of their preferences and particular lifestyles. Gillette converted Mach 3 Turbo into Venus Power just in order to cater to the segment of women users. So, Gillette designed separate offers for different market segments.
Positioning for Competitive Advantage
Mach 3 Turbo’s position in the market place is extremely strong and secure. Consumers definitely consider it a superior shaving product compared to other products. One can definitely say that it occupies a unique position in the minds of those consumers who want to have an extremely close and smooth shave.
If we analyze the position of Mach 3 Turbo on a positioning map, we will see that due to its higher price, it will be situated on the upper portion of the map. As far as luxury and performance are concerned, Mach 3 Turbo is more inclined towards performance due to its three blades and other product features. These product features have provided Mach 3 Turbo with a strong competitive advantage. The value proposition of Mach 3 Turbo is definitely “more for more”. Extra product features have prompted Gillette to charge a higher price. Finally, I think that Mach 3 Turbo’s positioning statement should be:
“To those people who want to get up in the morning with a desire to succeed in this world, Mach 3 Turbo is a three blade shaving product with extra features that allows you an extremely smooth and close shave which lasts for the whole day”.
Monday, November 23, 2009
Sunday, November 22, 2009
4 Ps of marketing
Marketing decisions generally fall into the following four controllable categories:
* Product
* Price
* Place (distribution)
* Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:
The Marketing Mix
These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
* Brand name
* Functionality
* Styling
* Quality
* Safety
* Packaging
* Repairs and Support
* Warranty
* Accessories and services
Price Decisions
Some examples of pricing decisions to be made include:
* Pricing strategy (skim, penetration, etc.)
* Suggested retail price
* Volume discounts and wholesale pricing
* Cash and early payment discounts
* Seasonal pricing
* Bundling
* Price flexibility
* Price discrimination
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution decisions include:
* Distribution channels
* Market coverage (inclusive, selective, or exclusive distribution)
* Specific channel members
* Inventory management
* Warehousing
* Distribution centers
* Order processing
* Transportation
* Reverse logistics
Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
* Promotional strategy (push, pull, etc.)
* Advertising
* Personal selling & sales force
* Sales promotions
* Public relations & publicity
* Marketing communications budget
Limitations of the Marketing Mix Framework
The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.
* Product
* Price
* Place (distribution)
* Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:
The Marketing Mix
These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
* Brand name
* Functionality
* Styling
* Quality
* Safety
* Packaging
* Repairs and Support
* Warranty
* Accessories and services
Price Decisions
Some examples of pricing decisions to be made include:
* Pricing strategy (skim, penetration, etc.)
* Suggested retail price
* Volume discounts and wholesale pricing
* Cash and early payment discounts
* Seasonal pricing
* Bundling
* Price flexibility
* Price discrimination
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution decisions include:
* Distribution channels
* Market coverage (inclusive, selective, or exclusive distribution)
* Specific channel members
* Inventory management
* Warehousing
* Distribution centers
* Order processing
* Transportation
* Reverse logistics
Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
* Promotional strategy (push, pull, etc.)
* Advertising
* Personal selling & sales force
* Sales promotions
* Public relations & publicity
* Marketing communications budget
Limitations of the Marketing Mix Framework
The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.
FORCES AFFECTING MODERN MARKETING
Of all the forces affecting modern marketing, perhaps none is more important than globalization. Since the 1980s, technological advances such as global telephone and computer networks have reduced geographic and even cultural distance. As a result, companies can now buy supplies and produce and sell goods in countries far from their home offices. Products conceived in one country are now being manufactured and then sold in many others. For example, Sony (Japan), Nestlé (Switzerland), Bic (France), and Volkswagen (Germany) have become household words around the world.
Although being able to market goods far from home presents corporations with many new opportunities, it also means they face new competition. Local companies that never even considered international competition now find foreign competitors stocked on shelves right alongside their own products. Some economists argue that local companies should be protected from such competition through legislation that regulates the flow of goods through trade barriers and other measures. Others oppose such regulation, arguing that it only raises prices for consumers. See also Free Trade.
Globalization, however, is only one force changing the way companies market their products or services. Another involves changes in the very interests and desires of consumers themselves. Consumers today are more sophisticated than those of past generations. They attend school for a much longer period of time; they are exposed to newspapers, magazines, motion pictures, radio, television, and travel; and they have much greater interaction with other people. Their demands are more exacting, and their taste changes more volatile. Markets tend to be segmented as each group calls for products suited to its particular tastes. “Positioning” the product—that is, determining the exact segment of the population that is likely to buy a product, and then developing a marketing campaign to enhance the product’s image to fit that particular segment—requires great care and planning. This type of campaign is known as target marketing.
Competition also has sharply intensified, as the number of firms engaged in producing similar products has increased. Each firm tries to differentiate its products from those of its competitors. Profit margins, meaning the profit percentages made by a business per dollar of sales, are constantly being lessened. Although costs continue to rise, competition tends to keep prices down. The result is a narrowing spread between costs and selling prices. An increase in a business’s sales volume is necessary to maintain or raise profit.
Another force affecting modern marketing is the influence of the consumer rights or consumer protection movement. This movement insists on safe, reputable, and reliable products and services. Both consumer groups and government agencies have intensified their scrutiny of products, challenging such diverse elements as product design, length and legitimacy of warranty, and promotional tactics. Warranty and guarantee practices, in particular, have been closely examined. New legislation has generally defined and extended the manufacturer’s responsibility for product performance.
Environmental concerns have also affected product design and marketing, especially as the expense of product modification has increased the retail cost. Such forces, which have added to the friction between producer and consumer, must be understood by the marketer and integrated into a sound marketing program.
Even the way a firm handles itself in public life—that is, how it reacts to social and political issues—has become significant. No longer may a corporation cloak its internal decisions as private affairs. The public’s dissatisfaction with the actions and attitudes of a firm has sometimes led to a reduction in sales; conversely, consumer enthusiasm, generated by a firm’s intentional establishment of a good public image or public relations, has led to increased sales.
link:microsoft encarta
Although being able to market goods far from home presents corporations with many new opportunities, it also means they face new competition. Local companies that never even considered international competition now find foreign competitors stocked on shelves right alongside their own products. Some economists argue that local companies should be protected from such competition through legislation that regulates the flow of goods through trade barriers and other measures. Others oppose such regulation, arguing that it only raises prices for consumers. See also Free Trade.
Globalization, however, is only one force changing the way companies market their products or services. Another involves changes in the very interests and desires of consumers themselves. Consumers today are more sophisticated than those of past generations. They attend school for a much longer period of time; they are exposed to newspapers, magazines, motion pictures, radio, television, and travel; and they have much greater interaction with other people. Their demands are more exacting, and their taste changes more volatile. Markets tend to be segmented as each group calls for products suited to its particular tastes. “Positioning” the product—that is, determining the exact segment of the population that is likely to buy a product, and then developing a marketing campaign to enhance the product’s image to fit that particular segment—requires great care and planning. This type of campaign is known as target marketing.
Competition also has sharply intensified, as the number of firms engaged in producing similar products has increased. Each firm tries to differentiate its products from those of its competitors. Profit margins, meaning the profit percentages made by a business per dollar of sales, are constantly being lessened. Although costs continue to rise, competition tends to keep prices down. The result is a narrowing spread between costs and selling prices. An increase in a business’s sales volume is necessary to maintain or raise profit.
Another force affecting modern marketing is the influence of the consumer rights or consumer protection movement. This movement insists on safe, reputable, and reliable products and services. Both consumer groups and government agencies have intensified their scrutiny of products, challenging such diverse elements as product design, length and legitimacy of warranty, and promotional tactics. Warranty and guarantee practices, in particular, have been closely examined. New legislation has generally defined and extended the manufacturer’s responsibility for product performance.
Environmental concerns have also affected product design and marketing, especially as the expense of product modification has increased the retail cost. Such forces, which have added to the friction between producer and consumer, must be understood by the marketer and integrated into a sound marketing program.
Even the way a firm handles itself in public life—that is, how it reacts to social and political issues—has become significant. No longer may a corporation cloak its internal decisions as private affairs. The public’s dissatisfaction with the actions and attitudes of a firm has sometimes led to a reduction in sales; conversely, consumer enthusiasm, generated by a firm’s intentional establishment of a good public image or public relations, has led to increased sales.
link:microsoft encarta
Product Diffusion Curve
Consumers can be grouped according to how quickly they adopt a new product. On the one extreme, some consumers adopt the product as soon as it becomes available. On the other extreme, some consumers are among the last to purchase a new product. As a whole, the new product adoption process can be modeled in the form of a bell-shaped diffusion curve similar to the following:
New Product Diffusion Curve
Defining bins one standard deviation wide about the mean, five different product adoption groups can be defined:
Innovators - well-informed risk-takers who are willing to try an unproven product. Innovators represent the first 2.5% to adopt the product.
Early adopters - based on the positive response of innovators, early adopters then begin to purchase the product. Early adopters tend to be educated opinion leaders and represent about 13.5% of consumers.
Early majority - careful consumers who tend to avoid risk, the early majority adopts the product once it has been proven by the early adopters. They rely on recommendations from others who have experience with the product. The early majority represents 34% of consumers.
Late majority - somewhat skeptical consumers who acquire a product only after it has become commonplace. The late majority represents about 34% of consumers.
Laggards - those who avoid change and may not adopt a new product until traditional alternatives no longer are available. Laggards represent about 16% of consumers.
For this discussion, the term "consumers" represents both individuals and organizations.
The rate of adoption depends on many factors, including:
- perceived benefits over alternative products
- communicability of the product benefits
- price and ongoing costs
- ease of use
- promotional effort
- distribution intensity
- perceived risk
- compatibility with existing standards and values
- divisibility (the extent to which a new product can be tested on a limited basis)
Even if a product offers high value to the customer, the firm nonetheless faces the challenge of convincing potential customers to try the product and eventually to adopt it. The product diffusion curve is partly responsible for the product life cycle, which calls for different management strategies that depend on the product's stage in the life cycle.
source: http://www.quickmba.com/marketing/product/diffusion/
The SWOT Matrix
A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is shown below:
SWOT / TOWS Matrix
Opportunities | S-O strategies | W-O strategies |
Threats | S-T strategies | W-T strategies |
S-O strategies pursue opportunities that are a good fit to the company's strengths.
W-O strategies overcome weaknesses to pursue opportunities.
S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.
W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.
PEST Analysis
- Political
- Economic
- Social
- Technological
The acronym PEST (or sometimes rearranged as "STEP") is used to describe a framework for the analysis of these macroenvironmental factors. A PEST analysis fits into an overall environmental scan as shown in the following diagram:
Environmental Scan | |||
/ | \ | ||
External Analysis | Internal Analysis | ||
/ \ | |||
Macroenvironment | Microenvironment | ||
| P.E.S.T. | |||
Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:
- tax policy
- employment laws
- environmental regulations
- trade restrictions and tariffs
- political stability
Economic Factors Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macroeconomy:
- economic growth
- interest rates
- exchange rates
- inflation rate
Social Factors Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential markets. Some social factors include:
- health consciousness
- population growth rate
- age distribution
- career attitudes
- emphasis on safety
Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:
- R&D activity
- automation
- technology incentives
- rate of technological change
External Opportunities and Threats The PEST factors combined with external microenvironmental factors can be classified as opportunities and threats in a SWOT Analysis.
Source: http://www.quickmba.com/strategy/pest/
Additional Social Marketing "P's"
you all have heard about 7P's or 4P's so here are some more social marketing P's
source: http://www.social-marketing.com/Whatis.html
Publics--Social marketers often have many different audiences that their program has to address in order to be successful. "Publics" refers to both the external and internal groups involved in the program. External publics include the target audience, secondary audiences, policymakers, and gatekeepers, while the internal publics are those who are involved in some way with either approval or implementation of the program.
Partnership--Social and health issues are often so complex that one agency can't make a dent by itself. You need to team up with other organizations in the community to really be effective. You need to figure out which organizations have similar goals to yours--not necessarily the same goals--and identify ways you can work together.
Policy--Social marketing programs can do well in motivating individual behavior change, but that is difficult to sustain unless the environment they're in supports that change for the long run. Often, policy change is needed, and media advocacy programs can be an effective complement to a social marketing program.
Purse Strings--Most organizations that develop social marketing programs operate through funds provided by sources such as foundations, governmental grants or donations. This adds another dimension to the strategy development-namely, where will you get the money to create your program?source: http://www.social-marketing.com/Whatis.html
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