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4 Ps of marketing

Marketing decision variables are those variables under the firm's control that can affect the level of demand for the firm's products. They are distinguished from environmental and competitive action variables that are not totally and directly under the firm's control. The four marketing decision variables are: Price variables  Allowances and deals

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Distribution and retailer mark-ups Discount structure

Product variables  Quality

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Models and sizes Packaging Brands Service

Promotion variables  Advertising

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Sales promotion Personal selling Publicity

Place variables  Channels of distribution

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Outlet location Sales territories Warehousing system

Marketing > Segmentation Market Segmentation Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. The Need for Market Segmentation The marketing concept calls for understanding customers and satisfying their needs better than the competition. But different customers have different needs, and it rarely is possible to satisfy all customers by treating them alike. Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms ignored the differing customer needs, another firm likely would enter the market with a product that serves a specific group, and the incumbant firms would lose those customers. Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs. Requirements of Market Segments

suburban. etc. as similar as possible within the segment. For example. Bases for Segmentation in Consumer Markets Consumer markets can be segmented on the following customer characteristics. interests. married with no children (DINKS: Double Income. No Kids).  Income  Occupation  Education  Ethnicity  Nationality  Religion  Social class Many of these variables have standard categories for their values. Psychographic Segmentation Psychographic segmentation groups customers according to their lifestyle. Some psychographic variables include:  Activities . for segments to be practical they should be evaluated against the following criteria:  Identifiable: the differentiating attributes of the segments must be measurable so that they can be identified.  Substantial: the segments should be sufficiently large to justify the resources required to target them. country. or solitary survivor.  Durable: the segments should be relatively stable to minimize the cost of frequent changes. full-nest. and opinions (AIO) surveys are one tool for measuring lifestyle.In addition to having different needs. for example.  Geographic  Demographic  Psychographic  Behavioralistic Geographic Segmentation The following are some examples of geographic variables often used in segmentation. or III depending on the age of the children. family lifecycle often is expressed as bachelor. Some of these categories have several stages. the segments must respond differently to the different marketing mixes. that is. or even neighborhood  Size of metropolitan area: segmented according to size of population  Population density: often classified as urban. II.  Accessible: the segments must be reachable through communication and distribution channels. Generation X.  Region: by continent. empty-nest. Activities. and as different as possible between segments.  Unique needs: to justify separate offerings. full-nest I. state. A good market segmentation will result in segment members that are internally homogenous and externally heterogeneous. or rural  Climate: according to weather patterns common to certain geographic regions Demographic Segmentation Some demographic segmentation variables include:  Age  Gender  Family size  Family lifecycle  Generation: baby-boomers.

Philippines .September 2000 Marketing practitioners often find themselves so preoccupied with the hard work of running marketing programs. Shipping costs may be a purchase factor for vendor selection for products having a high bulk to value ratio. as well as resellers. negotiations. industrial customers tend to be fewer in number and purchase larger quantities. etc. first-time. regular.  Purchase procedure: sealed bids. regular. Industrial markets might be segmented on characteristics such as:  Location  Company type  Behavioral characteristics Location In industrial markets. first-time. They evaluate offerings in more detail. and institutions. etc. customer location may be important in some cases. etc. In some industries firms tend to cluster together geographically and therefore may have similar needs within a region. Henderson Consulting International Manila. patterns of purchase behavior can be a basis for segmentation.Interests Opinions Attitudes Values Behavioralistic Segmentation Behavioral segmentation is based on actual customer behavior toward products. The strategic marketing plan Clarence Henderson. and the decision process usually involves more than one person. Many of the consumer market segmentation variables can be applied to industrial markets. and attending to the day-to-day grind     .  Readiness to buy  Occasions: holidays and events that stimulate purchases Behavioral segmentation has the advantage of using variables that are closely related to the product itself. so distance from the vendor may be critical. Some behavioralistic variables include:  Benefits sought  Usage rate  Brand loyalty  User status: potential. Company Type Business customers can be classified according to type as follows:  Company size  Industry  Decision making unit  Purchase Criteria Behavioral Characteristics In industrial markets. governments. It is a fairly direct starting point for market segmentation. Bases for Segmentation in Industrial Markets In contrast to consumers. supervising staff and sales force. Such behavioral characteristics may include:  Usage rate  Buying status: potential. These characteristics apply to organizations such as manufacturers and service providers.

top management philosophy and mindset should provide the foundation for developing the strategic marketing plan. Railroads went under in the states in part because they stubbornly kept thinking of themselves as being in the railroad business. and especially . yet small enough for effective planning and marketing management. The broad scope of strategic planing encompasses:  All the products/services your company offers  All the markets you serve  Both environmental and internal variables  Production. competitors. Don't make that mistake yourself! Focus. gain a little perspective. finance. research. This might be an entire company. includes both external and internal components. However. Second. Some Basics Start with a thorough analysis and clear understanding of the strategy and objectives of your company. or a single product..e. move to a Situation Analysis. as long as that unit is a separate entity for planning purposes (i. You should conduct such reviews regularly to capture a "snapshot" of your current status. analyze. And third. and customers). Economic forces are always important. in the process clarifying where you want to be in the future. You must also understand demographic factors. key marketing decisions such as which market niches to address. Theodore Levitt pointed out that many companies have gotten themselves in deep trouble because they failed to understand just exactly what business they were in. product distribution channels. has its own management. After clarifying the nature of your business. positioning strategy. This strategic perspective can be contrasted to the tactical level (which looks at performance of specific products or markets over a shorter time frame) and operational planning (which focuses on the nitty gritty of getting the job done). An SBU must be large enough to be a meaningful unit for strategy formulation and evaluation. an expanding economy has fundamentally different implications than one that is in retrenchment. and come to a consensus about what business you are really and truly in. marketing expertise is required to implement abstract corporate strategy. of course.that they lose sight of the Big Picture. There are four key elements to strategic planning at the SBU level:  Identification of the business  Situation Analysis  Selection of strategies  Establishment of controls What business are you in? In "Marketing Myopia". Typically you would want to cover the following areas. First. Begin by identifying your strategic business unit (SBU). his classic 1975 article published in Harvard Business Review. Following is a somewhat oversimplified but hopefully useful overview of the strategic planning process. Your situation. a division. it is essential every once in a while to step back. a product line. What is the corporate development strategy? This broad understanding is essential for at least three reasons. which might also be referred to as a marketing audit. and engage in some serious strategizing. for example. External Review A periodic review of the business environment is essential. when in fact they were in the transportation business. and direct marketing tactics flow directly from business strategy.  Economic-demographic variables.. access to resources. and other organizational elements needed for success Strategic planning looks beyond the immediate circumstances. reflect.

 Sociocultural variables. the demand for new products/service can force you into obsolescence if you don't keep up. You simply can't afford to ignore this dimension. and . and threats. place. "I love it when a plan comes together. Pulling the Plan Together As Hannibal Smith. sales compensation. Add as many rows as you need for various products/services and marketing/promotional activities. analyze them. product lines. By completing the information in the table. and evaluate how they interact with one another. populations. pricing strategy.  Internal review. product line strategy and distribution. Enumerate them. Maximize your strengths. SWOT analysis: What are your own distinctive competencies? Whether in a group context or sitting alone at your desk. Indeed. Then turn to a comprehensive review of internal processes. and new markets for previously unimagined products are the norm. The relative impact depends on your sector. new products. What direction does your analysis lead you in? The output of a solid SWOT analysis will help you formulate your marketing objectives. distribution channels. reporting requirements. which now change at warp speed. competition. as government policies that are good for one sector can do significant harm to another sector. New processes. and expense budgets.  Political-legal variables. including information systems. Customer analysis answers important questions about each specific product/service market. Marketing Strategy Analysis 1. program/product positioning.  Technological variables. including regulatory and tax issues." The figure below provides one possible format you can use to pull together your own Marketing Plan. market planning. Among the factors you should assess are:  Estimated annual purchases  Projected annual growth rate  Size of market (# of customers/organizations/purchasing units)  Demographics/socioeconomics of customers  Geographic concentration or dispersion  Customer buying motivations  Information they base purchase decisions on  Purchasing practices 2. work your way through your strengths. promotions strategy) 3. price. opportunities. take advantage of your opportunities. reflect on them.  This "snapshot" gives you an objective platform from which to dive into the meat of the strategic planning process. Key competitor analysis for each major competitor:  Estimated business strength  Market share and market trend  Financial strengths and weaknesses  Profitability  Quality of management  Technology position  Marketing strategy (target market strategy. minimize your weaknesses.demographic shifts. you address the key issues of product. production. marketing costs. and the myriad other issues that impact your business. the leader of the old A-Team television show used to say. weaknesses. the subtle market and psychological forces that alter demand patterns and market dynamics. and counteract your threats.

measurable. Log this information on the worksheet. informs. Marketing Objectives: The first step in pulling your strategic marketing plan together is to use the output of your Situation Analysis and SWOT work to establish specific marketing objectives that are SMART: specific. This usually is the smallest unit of distribution or use and is the package which is in direct contact with the contents. sale. storage. Packaging can be described as a coordinated system of preparing goods for transport. Make this planning process a team effort. protects. pricing. completing each section in turn. . Enumerate those objectives in the first section of the worksheet. Strategic market planning must be a living. marketing/promotional messages. warehouse storage and transport shipping. Ask everyone involved in implementing the plan for suggestions. Keep all members of your marketing and management team informed about progress in implementation. Marketing activity analysis for each product/service: Focus on each marketing activity. and sells. sale. Tertiary packaging is used for bulk handling. Identify specific techniques. logistics. any changes you'll need to make. art. and production of packages. so expect to periodically reevaluate your status. and technology of enclosing or protecting products for distribution. and use. the timeframe. Packaging is the science.promotion. relevant. The most common form is a palletized unit load that packs tightly into containers. achievable. and time-bounded. places for product/service delivery. breathing process. preserves. and key features and benefits to promote. For each one specify the target population. and the budget for each activity and record that information on the worksheet. From there you move smoothly through the table. Promotional activity analysis for each product/service: Repeat the process.  Primary packaging is the material that first envelops the product and holds it. You'll soon discover that the Big Picture approach can help you better manage your marketing activities and increase sales. evaluation. but this time focus on specific promotions. transports. Packaging contains. warehousing.   Secondary packaging is outside the primary packaging. Packaging also refers to the process of design. perhaps used to group primary packages together. Identify the responsible party. and end use. and actions you are trying to get your target markets to take. and revise the plan as new opportunities and ideas emerge. Marketing mix analysis for each product/service: Focus on each product/service category.

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