Chapter 2

a careful analysis of the marketplace should lead to alternative market opportunities
a market is heterogeneous!

mkt op- areas where there are favorable demand trends, where customers needs and opportunities are not being satisfied

ranges from direct bran competition and indirect (substitutes)
we are competing for discretionary income

competitors marketing programs have a major impact on a firms marketing strategy so they must be analyzed.
The reaction of competitors to a companys strategy are VERY important (ex- cut price, increase promos, attack one another) aka pepsi and coke

also must think about foreign companies penetrating the US

something special a firm does or has that gives it an edge over competitors. ways o achieve a competitive advantage include having quality products that command a premium price, providing superior customer service, lowest production cost and lower prices, domination channels of distribution
also- brand equity and differentiation

must identify  and becomes the focus of the firms marketing effort

identifying markets with unfulfilled needs
determining market segmentation
selecting a market to target
positioning through marketing strategies

isolates consumers with similar lifestyles, needs and the like and increases our knowledge of their specific requirements. the more we can establish this common gourd with consumers the more effective we will be in addressing these requirements in their communication programs and informing them

is dividing up a market into distinct groups that 1- have common needs and 2 will respond similarly to a marketing action

The more the market becomes segment the more precise their understanding but the the fewer consumers there are in each segment- how far should we go? is this group accessible?

1. Geographic segmentation
2. demographic segmentation
3. psychographic segmentation
4. behaviorism segmentation
5. benefit segmentation

approach where markets are divided into different geographic units. aka nations, states, counties or neighborhoods.

dividing the market on the basis of demographic variables such as age, sex, family size, education, income, and social class
ikea and women
dove- women
coca-cola- race
BMW- income

dividing the market on the basis of personality and or lifestyles
many consider lifestyle the most effective criterion for segmentation

lifestyle is based on an analysis of the activities, interests, and opinions of the consumer

values and lifestyle program- most popular option is programs. VALS divides america into 8 lifestyle segments that exhibit distinctive attitudes, behaviors, and decision makeing patterns
it is an excellent predictor of consumer behaviors and a number of companies now employ use it

dividing consumers into groups according to their usage, loyalties, or buying responses to a product.

products or brand usage, degree of use, and brand loyalty are combined with demographic and or psychographic criteria to develop profiles of market segment

grouping of consumers on the basis of attributes sought in a product.

aka people buy products for different reason. so segmenting them on base of what need they are trying to satisfy.

ex- watch-water resistance, style, time accuracy

1. determining how many segments to enter
2. determining which segments offer the most potential
   

• undifferentiated marketing- involves ignoring segment differences and offering just on product aka old black ford
• differentiated marketing- marketing in a number of segments, developing separate marketing strategies for each aka Marriott
• concentrated marketing- firm selects one segment and attempts to capture a large share of this market aka rolls royce

determining the most attractive segment
must examine the sales potential for the segment, the opportunities for growth, the competition, and its own ability to compete
and
must determine if we have the capabilities and resources to market to this segment

positioning- has been defines as the are and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.

positioning is he key factor in communicating the benefits it offers

a common approach to positioning is setting the brand apart form competitors on a basis of the specific characteristics or benefits offered.

salient attributes-are the basis for making a purchase decision

price/quality characteristics to position their brands. they do this with ads that reflect the image of a high-quality brand where cost, while not irrelevant is considered secondary to the quality benefits derived from using the brand

need both quality and good price

associating a product with a specific use or application
aka arm and hammer

example of Amtrak positioning itself as an alternative to airplanes.

associating product with a particular user or group of users
aka
skateboard shoes

competitors may be as important to positioning strategy as a firms own product or service

use to be taboo to mention competitors but fuck it

used to differentiate brands. associating the brand with a meaningful symbol

aka
jolly green giant, pillsbury doughboy, tony the tiger

usually occurs because of declining or stagnant sales or because of anticipated opportunities in other market positions

1. product
2. price
3. distribution channels

and how each influences and interacts with the promotional program

product decisions are all about branding and packaging!

product symbolism- refers to what a product or brand means to consumers and what they experience in purchasing and using it

product is not a physical object it is a bundle of benefits or values that satisfy the needs of consumers

branding- building and maintaining a favorable identity and image of a company and its products in the mind of the consumer.

goals of branding!

1. build brand awareness
2. develop attitudes towards the company, product or service
3. build and foster relationships between the consumer

brand identity- combo of name, logo, symbols, design, packaging, and image of associations held by consumers.

brand equity- an intangible asset of added value or goodwill that results from the favorable image, impression of differentiation and the strength of the consumer

is increasingly important.
more buying decisions are made at the point of purchase
ex) grocery store

important to IMC because it must be consistent with the perceptions of the product and communications strategy

marketing channels- set of interdependent organizations involved in the process of making a product or service available for use or consumption

direct channel- mary kay
indirect- target

push- push the product through the channels of distribution by aggressively selling and promoting the item to the resellers, or trade.

pull- spending money on advertising and sales promotion efforts directed towrads the ultimate consumer. goal is to create demand among consumers

influence wholesalers and retailers and motivate them to purchase its product for resale