September 29th Notes
September 29th Notes MKTG 3310-001
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This 2 page Class Notes was uploaded by Callisa Ruschmeyer on Thursday September 29, 2016. The Class Notes belongs to MKTG 3310-001 at Auburn University taught by MICHAEL KINCAID in Fall 2016. Since its upload, it has received 5 views. For similar materials see PRINCIPLES OF MARKETING in Marketing at Auburn University.
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Date Created: 09/29/16
September 29 Notes Continuation of Chapter 4 Requirements for Effective Segmentation Market segments must be: o Measurable o Accessible- the best way to communicate with segment o Substantial- size of people in it or the capacity to pay for higher margins (all in order to be attractive) Volume- segment must be large enough to provide the volume needed at lower margins to make it worth while Margin (not volume based/more high-end)- segment must be able to pay for margin; higher discretionary income o Differentiable- must be unique from other segments; so unique that it will not interest other people in other segments o Actionable- is that group of people able to take action to respond Will they do what we predict them to do Market Targeting Strategies Targeting broadly : undifferentiated (mass) marketing --> differentiated (segmented) marketing --> concentrated (niche) marketing --> micromarketing (local or individual marketing) : Targeting narrowly o Mass marketing- Model-T; one product for everyone Core product- what it does; its basic function Auxiliary dimensions- incidental actions o Shape, color, form, texture, packaging, brand o ^ the ways we differentiate what we are offering o Examples Hot Sauce @ $15 Package in a glass bottle Differentiate every aspect of product within that $15-dollar standard Flintstone Vitamin Gummies Core product- vitamin/medicine Auxiliary- gummy in fun shape Product Market Lifestyle Introductory phase o Strategy is to introduce one strategy to one target market o Concentrated target market strategy Growth o Adding target markets- giving consumers more of what they want- tailoring product by adding auxiliary dimensions, but does not change core function One or two of these markets might become dogs- low market share, growth not great Some may more from question marks to starts or cash cows o Attracts competitors Motivation for initial firm to come up with strategies against competitors Maturity o Growth in sales begins to subside- flattening out September 29 Notes Continuation of Chapter 4 o Still selling a lot- just not growing o Look at reasons to pare the tree: look at matrix- get rid of dogs, keep stars and questions marks by changing a little something about them Decline o If sales begin to drop, we collapse product line o We are not concerned about sales, but keeping a viable product line alive Differentiation and Positioning The company must decide on a value proposition o How it will create differentiated value for targeted segments o What positions it wants to occupy in those segments? Product position- the way a product is defined by consumers on important attributes o Basically, when you think of a specific product, what are all of the other products that also come to mind Choosing a Differentiation and Positioning Strategy 1. Identifying a set of differentiating competitive advantages o Value- one of the 36 blocks on the Buyer's Utility Matrix o Lower prices or provide more benefits o A firm can create differentiation on: product, services, channels, people, image