MGT301

Principles of Marketing
Lecture-19
Summary
of
Lecture-18
Market Segmentation (cont..)
Requirements for Effective Segmentation
 • Size, purchasing power, profiles of
Measurable
Measurable segments can be measured.

• Segments must be effectively

Accessible reached and served.
Accessible

• Segments must be large or

profitable enough to serve.
Substantial
Substantial
• Segments must respond
differently to different marketing
Differential
Differential mix elements & actions.

• Must be able to attract and serve

Actionable
Actionable the segments.
Target Marketing
Positioning for Competitive Advantage
 Identifying Possible Competitive
Advantages

Product Services
Differentiation Differentiation
i.e. Features, i.e. Delivery, Installation,
Performance, Style & Repair Services, Customer
Design, or Attributes Training Services

Image Personnel
Differentiation Differentiation
i.e. Symbols, i.e. Hiring, Training
Atmospheres, Events Better People Than
Competitors Do
Today’s Topics

Marketing Mix
4 Ps
Marketing is the involved process of determining the 4 P’s of the
Marketing Mix
– Product
– Price
– Promotion
– Place (Distribution)
The Marketing Mix
– Four marketing activities—product, Price, Place and Promotion—
that a firm can control to meet the needs of customers within its
target market

Product

Price
Target
Place Market

Promotion
 Marketing Mix Variables

Goods, services, or ideas that

Product satisfy customer needs

Decisions and actions that

Pricing establish pricing objectives and
policies and set product prices

The ready, convenient, and timely

Place availability of products

Activities that inform customers

Promotion about the organization and its
products
Components of Strategic Marketing
 Value-Driven Marketing
Value
– A customer’s subjective assessment of benefits relative to the costs
in determining the worth of a product
Customer value = customer benefits – customer costs

– Customer benefits
Anything desired by the customer that is received in an exchange

– Customer costs
Anything a customer gives up in an exchange for benefits

–Monetary price of the benefit

–Search costs (time and effort) to locate the product
–Risks associated with the exchange
 Benefits
 Consumers don’t buy products; they buy benefits

 Functional benefits: relating to the practical purpose a product serves

 Psychological benefits: relating to how a product makes one feel

Question: Why do you buy laptop?
 What is a Product?

Whatever is offered for “sale” in a marketing exchange

Can be tangible goods (Laptop), services (VU education), ideas

(Don’t smoke), places (Muree hills ), persons.
 What is a Product ?

Products, Services, and Experiences

Market offerings, pure tangible goods, pure services, experiences
 Definitions
Product
– Anything offered to a market for attention, acquisition, use, or
consumption that might satisfy a need or want.
Service
– Any activity or benefit that one party can offer to another that is
essentially intangible and does not result in ownership of
anything.
Goods Services
 Goods Services

Tangible Intangible

Sold Then Produced and/

Produced Then Sold or Consumed Same Time
 Goods Services

Tangible Intangible

Sold Then Produced and/

Produced Then Sold or Consumed Same Time

Can Store and Transport Perishable

Produced Separate Often Produced In

From Consumer Consumer's Presence
Levels of Products
 Augmented
Augmented
Product
Product

Installation

Packaging
Brand Features
Name Core
Core After-
Delivery
Benefit
Benefit or
or Sale
& Credit
Quality Service
Service Service
Design
Level

Warranty

Actual
Actual Core
Core
Product
Product Product
Product
Product Classifications

– Consumer products

– Industrial products
Product Classifications
 A Product..
 Anything tangible or intangible that, through the exchange process,
satisfies consumer or business customer needs.
 Products can be:
– physical goods,
– services,
– ideas,
– people, or
– places
 Classification of Products
How Long the Products Will Last
 High
Involvement Durable
Durable Goods
Goods
Decisions Provide
Provide Long-Term
Long-Term Benefits
Benefits
(cars,
(cars, furniture,
furniture, appliances)
appliances)

Nondurable
Nondurable Goods
Goods
Low Provide
Provide Short-Term
Short-Term Benefits
Benefits
Involvement (newspapers,
(newspapers, food)
food)
Decisions
Product Classifications
Consumer Products
Types of Consumer  Frequent purchases bought with
minimal buying effort and little
Products comparison shopping
 Low price
Convenience  Widespread distribution
Shopping  Mass promotion by producer
Specialty
Unsought
 Types of  Less frequent purchases
requiring more shopping effort
Consumer and price, quality, and style
Products comparisons.
 Higher than convenience good
pricing
Convenience
 Shopping
 Selective distribution in fewer
outlets
Specialty
 Advertising and personal selling
Unsought by producer and reseller
 Types of  Strong brand preference and
Consumer loyalty, requires special purchase
effort, little brand comparisons,
Products and low price sensitivity
 High price
Convenience
 Exclusive distribution
Shopping
 Specialty
 Carefully targeted promotion by
producers and resellers
Unsought
 Types of  Little product awareness and
Consumer knowledge (or if aware,
sometimes negative interest)
Products
 Pricing varies
Convenience  Distribution varies
Shopping  Aggressive advertising
Specialty and personal selling by
 Unsought producers and resellers
Industrial products
 Materials and parts
 Capital items
 Supplies and services
Enough for today. . .
 Summary

Marketing Mix
4 Ps
Levels of Products
 Augmented
Augmented
Product
Product

Installation

Packaging
Brand Features
Name Core
Core
Benefit After-
Delivery Benefit Sale
& Credit or
or Service
Quality Service
Level
Service Design

Warranty

Actual
Actual Core
Core
Product
Product Product
Product
Product Classifications
 Next….

Product (cont..)
 MGT301
Principles of Marketing
Lecture-19