Market Strategy Product vs. Service vs. Brand

1. Market StrategyProduct vs. Service vs. Brand November 14, 2011

2. 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

3. Market Strategy • There are 4 Main Steps in a Marketing Strategy • Market Segmentation • Target Marketing • Differentiation • Positioning

4. Market Segmentation Step 1: Market Segmentation • Dividing larger markets into smaller groups • Customers with distinct needs, characteristics, behaviors • Demographics • Geography • Psychographics • Behavior

5. Market Targeting Step 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?

6. Market Targeting Strategies Companies use different strategies for market targeting • Undifferentiated Marketing • Differentiated Marketing • Concentrated Marketing • Micromarketing

7. Market Targeting Strategies Undifferentiated Marketing • Mass Marketing – everyone in the market is reached Differentiated Marketing • Segmented marketing – a specific target is chosen and marketing efforts (and often products) are created to for it Concentrated Marketing • Niche marketing (a form of differentiated marketing) • Small, very specific market segments are chosen but a large share of those smaller segments are targeted Micromarketing • Local marketing – tailored marketing efforts or products to specific geographical locations • Individual marketing – customization of products or marketing to individual customers

8. Differentiation

9. Differentiation Step 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

10. Positioning

11. Positioning Step 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

12. 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

13. 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

14. 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

15. 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

16. Positioning Statement 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

17. 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

18. 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

19. 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

20. Products and Services

21. 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 • Aform 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.

22. 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

23. 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

24. 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.

25. 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 characteristics • Intangibility • Inseparability • Variability • Perishability

26. 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

27. 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)

28. Brand

29. 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

30. 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

31. 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?

32. Brand Name Good names should do the following: • Suggest something about the product's benefits and qualities • 24 Hour Fitness, MySpace.com, or Super Glue • Be easy to pronounce, recognize, and remember • Tide, Silk • Be distinctive • Lexus, Zippo, YouTube.com • Allow for extension of the company's product or service offerings • Amazon.com - began as an online bookseller, now sells just about everything • Translate well into other languages • Be capable of registration and legal protection • It isn’t already taken by someone else

33. Homework • 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 • 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 • Do a SWOT analysis of YOUR specific business unit • Consider the micro and macro environments • Read Module 7