Marketing Theory and Practice
In Assignment One trends in the macro-environment were identified that would impact on the development of a road safety product called “Sat-Safe”, a Global Positioning System (GPS) which automatically adjusts vehicle speed to posted speed limits. Consequently, this paper utilises these trends to segment and target the market, to set marketing objectives and using the marketing mix to position the product. These trends included demographic changes in the family unit, continuing immigration and metropolitan population shifts. In the economic sphere income distribution shapes consumer spending patterns, this is affected by employment, interest rates and ordinary earnings. The natural environment reveals a predilection to environmental protection by reducing reliance on non-renewable resources. The dependence on information systems dominates the technological environment; whilst continuing road fatalities from speeding undertaken by younger generations is in the political sphere and represents an important trend in this environment. Finally, trends in the cultural environment suggest a desire to lead longer and healthier lives.
A good introduction has been provided.
2. Target Market
The Essay on Trends Impacting Marketing
Define Marketing and discuss how its more than just "telling and selling" process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development 2. ) Marketing has been criticized because it "makes people buy things that dont really need" refute or support this accusation most of the time that is the case, most ...
Kotler, Brown, Burton, Deans and Armstrong (2010) define a target market as “a set of buyers’ sharing common needs or characteristics that the company decides to serve” (p. 278).
To ascertain the primary target for the product all the following segmentation variables need consideration.
Geographic segmentation is “dividing a market into different geographical units such as nations, regions, states, municipalities, cities or neighbourhoods” (Kotler et al., 2010, p. 265).
Accordingly, variables of city size and density are utilised as they suggest promising market volume. Czinkota and Ronkainen (2004) assert that this is due to the potential market, advertising convenience and distribution channels. Accordingly, the target market using geographical variables will be people living in an urban setting in major Australian cities as studies suggest that the five major cities account for 60.8% of total population and that nearly two-thirds of the population live in urban centres (Australian Government, 2010 & ABS, 2009).
Demographic segmentation involves dividing the market into groups based on variables including, but not restricted to, age, sex, income and education. Whilst a multivariate demographic variable will be applied the primary target market for “Sat-Safe” in the sex variable will be females. The changing family structure has resulted in an increasing female workforce participation rate. Paridon, Carraher and Carraher (2006) assert that women account for approximately 80% of total retail expenditure. Accordingly, the female workplace participation rate and their effect on retail expenditure establish them as an important segment. The age variable will target the female Generation X cohort as they are likely to have children starting to drive and the product will appeal to the nurturing instinct to protect their children’s safety. The income variable of $50,000 and over per annum will be utilised; however, not in isolation of other considerations. Yankelovich and Meer (2006) postulate that purchasing doesn’t always align with income and that demographic segmentation alone loses its ability to guide the process. However, this variable will be used to segment people perceived as having higher levels of disposable income. As “Sat-Safe” is a new product, a university education level will also be applied as studies concerning new-product adoption suggests consumer innovators tend to have higher education levels and opinion leadership (Dickerson & Gentry, 1983, Gatignon & Robertson, 1991, Rogers, 1995, Uhl, Andrus, & Poulsen, 1970, as cited in Bayus & Mason, 2003).
The Essay on Target Market Webvan Company Segmentation
1. Explain, based on the information given in the article and what you have learned why Webvan failed. Incorporate the following concepts in your explanation: (a) The marketing concept; (b) Market segmentation; (c) Identification of target market (s); (d) Size of the target market (s); (e) Consumer behaviors; (f) Strategy (a) Marketing concept: Webvan did not follow the marketing concept. The ...
Psychographic segmentation divides a market into “different groups based on social class, lifestyle or personality characteristics” (Kotler et al., 2010, p. 270).
The values, attitudes and lifestyle groupings variable will be used as it strongly influences consumer behaviour. Accordingly, the product will target the socially aware segment; considered to be innovators who like to find/try new products and in the process persuade others to accept their preferences (Roy Morgan Research, 2010).
They are often referred to as opinion leaders, are early product adopters, exert influence over others and assist marketers in selling products to the mass market (Kotler et al., 2010).
Behavioural segmentation “divides a market into groups, based on consumers’ knowledge of, attitude towards, uses for and responses to a product” (Kotler et al., 2010, p. 270).
The benefits sought variable will be used as the target market has strong maternal instincts to protect their children’s safety and additionally the augmented product benefits will value-add. Kotler et al. (2010) assert that the benefits sought variable group people according to the benefits they seek when purchasing a product. Therefore it is an important variable for new products as if existing offerings do not present such benefits a latent need in the marketplace can result. Jaworski, Kohli and Sahay (2000) posit that market behaviour can be shaped by perceptions through “new to the world” complete offerings or by introducing new benefits that customers have not recognised previously.
A very good analysis of the target market segmentation variables has been undertaken to determine your target segment. However, try to provide a sum-up line at the end, clearly stating your chosen segment.
The Essay on Benefits of Integrated Marketing Communications
Benefits of Integrated Marketing Communications to OrganizationsIntegration of PR and Marketing The main benefits to using integrated marketing communications or IMC is that it is essential and cost effective to an organization. In addition, IMC addresses the issue of the four different messages that an organization needs to be aware of so it can control or at least influence. Also, there are six ...
3. Marketing Objectives
Marketing objectives are “specific, measurable aims or expected outcomes of marketing activity to be achieved in a given period” (Monash Marketing Dictionary, 2010).
Accordingly, the following marketing objectives will be established for marketing the product.
• Objective 1 – Develop customer knowledge of product by 50% in the first year – This is measurable through customer visits and sales, hits on the web-page and through targeted marketing techniques. It is also relevant to the target market who seeks safety solutions for their children who are of driving age.
• Objective 2 – 25% take-up of offers in retail outlets in the first year – This will be measured and achieved through product sales and product benefits communicated through the sales team in “Sat-Safe’s” retail outlets. A high level of product knowledge and service by staff will in turn build consumer brand loyalty and sales.
• Objective 3 – Increase of Internet Sales by 100% each and every year for the first three years – This will be measured through converting hits on the web-page into measurable sales. This objective relates directly back to trends in the technological environment and suggests that the target market undertake on-line shopping for convenience (Barletta, 2003).
• Objective 4 – Develop brand awareness and loyalty by 25% in the first year – In the interim this will be measured through existing customers by sales staff and on-line/off-line questionnaires. Jacobs (2003) asserts that the role of employees in developing brand loyalty is critical as they interact with the consumers. The target market pro-actively adopts new products so building lasting relationships may result in vital word-of-mouth influence.
Very sound marketing objectives have been provided that conform to the SMART criteria.
4. The Marketing Mix Strategy
Product strategy is a process to define a product’s core, actual and augmented consumer benefits with the core product being the problem solving services that consumers seek from a product (Kotler et al., 2010).
The Business plan on Four Product/ Market Expansion Grid Stretegies
1. Name and describe the four product/market expansion grid strategies and explain which strategy Google implemented with the Nexus One. The four product/market expansion grid strategies are market penetration, market development, product development and diversification. Market penetration is a growth strategy that increase sales to the existing market without changing the existing product. Market ...
Accordingly, the core benefit is to improve road safety. Whereas the actual benefit of the product, will be features such as the GPS to adjust vehicle speed and a vehicle emission device that monitors reduction of greenhouse gases through driving at consistent speeds. Accordingly, such actual benefits will appeal to the socially aware nature of the target group. The augmented product is additional benefits built around the core and actual product (Kotler et al., 2010).
Benefits of this product will include features such as same-day shipping, extended warranty, fixed/portable installation capability, wireless internet enabled for download of up-to-date maps, after sales service and language support. Core benefits are vital in marketing the product; however, actual and augmented benefits will serve to distinguish it as a total product solution delivering superior value. Consequently, Grönroos (2010) proposes that value does not emerge only from the core product but from the whole gamut of supplier-customer interaction that supports the use of the core product.
Products are classified as consumer or industrial; industrial products usually require further processing or are purchased for use in conducting a business, whilst consumer products are purchased for final personal consumption (Kotler et al., 2010).
As “Sat-Safe” is a new product it will be marketed as an unsought consumer product as the market is not aware of it and as such it may require large-scale promotional effort (Kotler et al., 2010).
Conversely, Lin, Hsu, Huang and Hsu (2005) consider that whilst unsought products can be cold sellers, they benefit from targeted advertising and present significant opportunity for substantial sales growth. Accordingly, the trait to try new products will appeal to the benefits sought characteristic of the target market.
Product positioning is the way the product is defined by consumers on important attributes as opposed to competing products (Kotler et al., 2010).
It involves choosing potential competitive advantages; selecting the most desirable advantages and communicating and delivering the selected position to the market (Kotler et al., 2010).
The Essay on Ansoff's Product Market Grid
The Ansoff product-market matrix helps to understand and assess marketing or business development strategy. Any business, or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is one simple way of looking at strategic development options: Each of these strategic options holds different opportunities and downsides for different organizations, so ...
Therefore, the product will be competitively differentiated along product and service lines. Innovation in new product development can lead to competitive advantage; and creativity in new product positioning results in unique ideas that meet distinctive market demands (Barney, 1991, Hunt & Morgan, 1995, as cited in Im & Workman, 2004).
Accordingly, “Sat-Safe” can be differentiated by actual and augmented benefits, however, the core product will serve to meet unmet and unique market demands appealing to the socially aware variable of the target market. Service differentiation with the product will occur through means such as skilled customer service staff, expedient shipping, warranty terms and installation options. Many considerations around product differentiation involve innovation and filling market gaps; however, they are primarily around creating customer value. In analysing this Rowe and Barnes (1998) postulate that only organisations that build strong customer relations have potential to develop sustained competitive advantage.
Other important considerations in the product strategy process include branding and labelling. A brand can encompass names, signs or symbols often in combination, to identify a product and to differentiate it from competitor’s products (Kotler et al., 2010).
Branding in marketing terms correlates strongly with customer loyalty and is associated with a consumer’s values towards a product. Similarly, labelling is important in the product positioning process, both visually and legally. Product labelling is highly regulated, particularly from a health and safety perspective as labels contain the required information on product usage. Accordingly, the product will be packaged and labelled in an environmentally friendly manner in accordance with social responsibility trends identified in the macro-environment.
An extremely well analysed and applied product strategy is evident here.
Pricing strategy involves planning product pricing based on factors such as the organisation’s marketing objectives, demand, competitors pricing and micro/macro-environment dynamics. Various methods to price a product exist such as cost-based pricing which involves adding a standard product mark-up (Kotler et al., 2010).
The Essay on Marketing Strategies 5
... B & H Incorporateds home office computing product lines. The marketing strategy should detail the market segments on which the company will focus. These ... 3. Educate the consumer that you exist. Here, you must cut through the clutter to communicate to your targeted customer that you ...
One of the main advantages of cost-based pricing is that it results in predictable costs for the consumer and it is easily administered and does not require continual adjustment by the seller. However, the disadvantage is that it disregards the role of the consumer, product demand and marketplace competition (Kotler et al., 2010).
For those reasons it will not be utilised in the pricing strategy for the “Sat-Safe” product.
Performance based pricing is where a seller is paid on the basis of performance and is prominent in professional services and contract construction (Kotler et al., 2010).
The advantages for the consumer are that they do not pay for a service until such stage as full service is delivered and it can open clear and lasting communication channels between the customer and service provider. This method will not be used to price the “Sat-Safe” product as it would appear to be more successfully applied in the service industry rather than for marketing a physical product.
Values based pricing involves “setting a price based on buyer’ perceptions of value, rather than on the seller’s cost” (Kotler et al., 2010, p. 386).
The advantages of values-based pricing is that if you know production costs, your competitors and your target market it can be profitable and lead to higher consumer perceived value. The risks associated with this pricing is that it can be financially unpredictable if the target market has been ill-defined or if the product has been over-priced compared with the consumer’s perceived value. This pricing approach will be utilised to market the “Sat-Safe” product through the core, actual and augmented product benefits it offers. Accordingly the firm will be competing on non-pricing factors as research suggests that customers are frequently unaware of product prices; being rated as one of the least important purchasing criteria (Hinterhuber, 2004).
Strategies such as market skimming and market penetration are also adopted for new product pricing. Market skimming pricing initially sets the price high, resulting in maximum revenue from segments willing to pay the price resulting in fewer but more profitable sales (Kotler et al., 2010).
Market penetration sets a lower price to attract a larger number of consumers and therefore a large market share (Kotler et al., 2010).
In accordance with the income and education variables of the target market the “Sat-Safe” product will be marketed using a market skimming strategy. As it is a new product it will be pitched highly on benefits and value and as the product is patent protected there is no direct competitor in the marketplace; representing potential for high market penetration. In accord, Hinterhuber (2004) suggests that there is an assumption that high prices and high market share are incompatible however posits that in various industries the premium brand is also the market leader.
A very sound assessment of the pricing strategy has been undertaken and has been very well applied to your product.
Place strategy is the firm’s decision-making process concerned with “developing an efficient and effective means of storing and handling finished products and of getting them efficiently to the target market” (Monash Marketing Dictionary, 2010).
The “Sat-Safe” business will be located in the major Australian cities as the target market is people living in highly populated urban areas. It is vital for organisations to sell their products at places that can be conveniently accessed by the end-consumer. Place strategy involves the whole continuum from product manufacture to finding distribution networks to end-user product purchase. Marketing intermediaries are an important part of the distribution network as they “help an organisation to promote, sell and distribute its good to final buyers …….” (Kotler et al., 2010, p. 135).
There are three main intermediaries which include the company sales force which is a company’s direct sales team; manufacturers agencies who are independent firms who use their own sales force to distribute products; and industrial distributors who find distributors to buy and stock products and give them exclusive distributions, margins, training and promotional support (Kotler et al., 2010).
Accordingly, “Sat-Safe” will be using its own company sales force team through using exclusive distribution channels to restrict the number of intermediaries in the process. The “Sat-Safe” product will primarily be sold online and through “Sat-Safe’s” own retail outlets, which will be located in suburban areas of major cities near existing car yards. Accordingly, the product will be sent from the manufacturer directly to warehouses that will in turn channel the product to the firm’s retail outlets and the end-user who have purchased on-line. Distributing the product in this manner will ensure that the company have control over the service process; ensuring that the target market’s expectations are met with regard to augmented product benefits including customer service and delivery timelines.
The place strategy analysis is quite impressive and is consistent with the analysis of the product and price strategies.
Promotion strategy is “the element of a firm’s decision-making concerned with choosing the most appropriate mix of advertising, sales promotion, personal selling and publicity for communication with its target market” (Monash Marketing Dictionary (2010).
The Integrated Marketing Communications (IMC) model involves blending all promotional efforts using various elements including, but not restricted to, personal selling, advertising and online marketing (Kotler et al., 2010).
It can be a highly persuasive marketing model used to shape consumer spending behaviour. Madhavaram, Badrinarayanan and McDonald (2005) assert that IMC is vital in building brand equity which is a powerful set of values by consumers that can lead to product loyalty and preference.
The IMC budget approach to be utilised in the promotion of the “Sat-Safe” product will be the objective and task method which is designed with specific objectives in mind and estimating the costs to undertake these tasks (Kotler et al., 2010).
Prendergast, West and Shi (2006) assert that it is a logical bottom-up approach as it gains important marketing familiarity by reliance on marketing staff that are close to the customer interface and therefore understand their needs. The method of communication to be used to market the “Sat-Safe” product will be a variety of targeted, in-store and one-to-one communications to promote the product. Using the blending model provides marketers with opportunities to identify all possible product selling approaches. Targeted communication will be especially beneficial in marketing this product as it can tailor messages to reach various market segments (Kotler et al., 2010).
Accordingly, advertising methods will include pay-TV, trade exhibitions, internet based advertising, in-store sales promotions and advertising in magazines that appeal to the target market. Barletta (2003) asserts that marketers are increasingly using target marketing techniques, especially internet based to reach the powerful female consumer segment; one that could be damaging for marketers to ignore.
Push and pull strategies refer respectively to pushing marketing efforts primarily at marketing intermediaries; or by directing marketing towards the final consumer to create customer demand (Kotler et al., 2010).
A pull strategy will be applied in the marketing of the “Sat-Safe” product as it correlates with the product strategy of value through core, actual and augmented benefits, and positioning on product and service differentiation. Pricing strategies are also aimed towards the target market that seek product benefits and are not overly concerned about price. Place strategies are consistent with making the product accessible to the end-consumer and promotion is largely focussed on target marketing to the final consumer. This should result in customer demand for the product which will successfully drive the pull strategy in the marketplace.
The analysis of the promotional strategy is extremely well defined and the link to your product is evident in the recommendations made.
New market product development relies on organisations to segment and target particular markets on distinguishable characteristics. There are many segmentation variables that can be used in combination to effectively define the target market; which is imperative as it guides further processes of setting marketing objectives and marketing mix strategies.
The marketing mix consists of four strategies. Product strategy encompasses three product attributes and if blended effectively can communicate superior customer value to the target market. The “Sat-Safe” is classified as a consumer product which encompasses a range of purchasing behaviours such as un-sought goods. If an existing product does not meet current consumer needs there exists opportunities through product differentiation, positioning and branding to achieve marketplace competitive advantage. Price strategy such as values-based pricing can also lead to competitive advantage by providing superior value through product benefits. Market skimming can be used effectively with new products and can be promoted to the consumer on the basis of superior customer benefits, rather than being promoted on price factors alone.
Place strategy is vital as it encompasses processes from the product manufacture stage through to end-consumer purchase. Accordingly, the product has to be accessed easily by the consumer. Hence, place strategy encompasses where the business is located to key stakeholders such as intermediaries and distribution channels that assist an organisation to get their product to the customer. Promotion strategy is how an organisation communicates its offering to the marketplace. The IMC offers innovative ways to blend communication methods to effectively promote products and includes methods from mass communication to targeted marketing. The type and level of communication is product and target market dependent, however, targeted marketing is generally tailored to the characteristics of your target market. The IMC is supported by a budget and in the case of “Sat-Safe” the objective and task method is chosen as it relies on a consumer centric interface to add consumer value. In conclusion, the pull strategy will be used to market the product directly to the consumer and thereby limits marketing intermediaries so as to ensure that the organisation has control over delivering superior customer value.
A very good conclusion has been provided that clearly highlights the key findings and recommendations of the report.
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|Criteria |Fail |Pass |Credit |Distinction |High Distinction |
| |Less than 50% |50 – 59% |60-69% |70 – 79% |80 – 100% |
|Defined and identified |Inadequate description,|Some relevant theoretical|Effective description |Clear, detailed and |Excellent use of |
|relevant target market |definition, explanation|concepts linked to the |and explanation of the |consistent description |segmentation |
|using segmentation |and identification of |segmentation variables, |target market using |and explanation of the |variables. Response |
|variables. |target market, no |from the four categories |segmentation variables. |target market using |included multiple |
| |reference to the |to identify target | |segmentation variables |variables from each |
| |segmentation variables.|market. | |from each of the four |of the 4 categories |
| | | | |categories. |to identify and |
| | | | | |discuss target |
| | | | | |market. |
|Ability to discuss and |Discussion is not |Discussion is adequate |Effective discussion of |Demonstrates evidence |Statements and all 4 |
|set marketing |supported adequately |but limited to |marketing objectives |from wider readings and |objectives are |
|objectives for the |either through |generalities. Uses some |indicating some |research. Discussion |supported by clear |
|organisation that are |reasoning or |relevant references, and |reasoning and analysis |supports a coherent line|and balanced |
|linked to the analysis |appropriate references.|linking of theory (to |using relevant |of reasoning, linking |reasoning and strong |
|of the | |macro analysis / target |references, and linking |theory (to macro |evidence of |
|macro-environment and | |market) and practice. |of theory (macro |analysis / target market|background reading |
|to the target market. | | |analysis / target market|and practice. Perceptive|and research. Shows |
| | | |and practice. |recognition of the need |insight into macro |
| | | | |for marketing |analysis and target |
| | | | |objectives. |market. |
|Theoretical knowledge |May not have addressed |The 4Ps identified but |Effective discussion |Sound understanding of |Excellent analysis |
|and evidence of the |this aspect of the |not adequately positioned|that shows good |the process of market |and discussion using |
|process of market |essay requirement. |in response to situation |understanding of |planning. Elements of |appropriate examples.|
|planning and the |Insufficient strategies|analysis, target market |marketing theory, |the marketing mix are |Includes extended |
|ability to devise the |identified. Inadequate |needs and marketing |planning and process. |consistent with the |responses that |
|organisation’s |definition of all areas|objectives. May have |Some links to situation |other elements, |consider wider |
|marketing mix. |of the marketing mix. |confined discussion to |analysis, target market |occasional links to |implications on the |
| | |generalities. |and objectives are made.|macro environment |target market & |
| | | | |trends. Accurate depth |market planning |
| | | | |knowledge of all 4 Ps |Marketing strategies |
| | | | |and market theory. |are consistent with |
| | | | | |the mix. |
|Citation of sources, |Work may show an |Work may show an |Quotations and |Referencing is consistently accurate. |
|referencing and their |over-reliance on direct|over-reliance on |referencing are mainly |Citations used well to support the essay’s |
|correct formatting |quotations. |quotations from source |accurate. Work may show |rationale. Meets Q Manual requirements. |
|using APA method shown |Technical aspects of |material. Referencing |some evidence of |Academic Text plus 5- 6 or more relevant |
|in Q Manual. Use and |referencing may have |method may show some |integration of |academic sources |
|quality of academic |frequent errors. May |inaccuracies. Mostly |citations. Correct | |
|sources text, websites |deviate significantly |correct application of Q |application of Q Manual | |
|and relevant journal |from Q Manual. Less |Manual requirements. |requirements. | |
|articles. |than 2 academic sources|Text plus 2 relevant |Text plus 3-4 relevant | |
| | |sources |sources | |
|Presentation |Poor essay structure. |Satisfactory essay |Well presented essay structure. Effective language that appropriately |
|Technical aspects |Inappropriate language |structure and language |facilitates the presentation of a logical and systematic flow. |
| |that interferes with |that adequately supports |Punctuation, spelling and grammar mainly accurate. |
| |the presentation. |the presentation. |Word processed, included Faculty coversheet, appropriate font and font |
| |Punctuation, grammar |Punctuation, spelling |size , spacing between paragraphs, reference list on separate page, etc|
| |and/ or spelling |and/ or grammar contain | |
| |contain frequent |errors. Adequate | |
| |errors. Poor | | |
Comments: A close-to-perfect effort from you – absolutely wonderful! The use of the theory has been judicious blended with the practical application to your product through in-depth analysis and sound and well justified recommendations. Overall presentation is neat and professional, the introduction and conclusion quite perfect and the list of references truly academic and diverse in their range and quality. Keep it up!
Grade: N, P, C, D, HD