Chapter 1
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The Role of IMC in the Marketing Process © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Marketing and Promotions Process Model Opportunity analysis Identifying markets Product decisions Promotional decisions Competitive analysis Market segmentation Target marketing Pricing decisions Channel-ofdistribution decisions Selecting a target market Promotion to final buyer • Advertising • Direct marketing • Interactive marketing • Sales promotion • Publicity and public relations • Personal selling Internet/ Interactive Promotion to trade Purchase © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin • Consumers • Businesses Resellers Positioning through marketing strategies Ultimate consumer Marketing to a Lifestyle © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Marketing Segmentation Process Find ways to group consumers according to their needs. Find ways to group marketing actions - usually the products offered - available to the organization. Develop a market/product grid to relate the market segments to the firm’s products and actions. Select the product segments toward which the firm directs its marketing actions. Take marketing actions to reach target segments. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Bases for Segmentation Psychographic Demographic Customer Characteristics Socioeconomic Geographic Behavior Usage Outlets Buying Situation Awareness © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Benefits Segmentation by Gender Focus on females’ fashion Information sourceļ¼Giordano Segmentation by Age Focus on kids Information sourceļ¼Giordano Segmentation by Age LEGO SEGMENTS http://www.lego.com/dacta/products/ productsbyproductline.asp • small kids 0-18mths – 0-18 mths PRIMO baby, stack and learn – 18-36 mths PRIMO motion, basic themes • boys – 3-5 yrsd DUPLO basic, themes, toolo, train/SYSTEM freestyle, town junior – 5-9 years SYSTEM themes/TECHNIC starter – 9+ SYSTEM model team, TECHNIC model team, advanced, cybermaster • girls SOURCE: http://www.lego.com – 3-5 years DUPLO basic, themes SYSTEM freestyle, town junior, LEGO scala – 5-9 yrs SYSTEMS, Segmentation by Lifestyles • This ad illustrates the way that products like cars are tightly integrated into consumers’ lifestyles, along with leisure activities, travel, music, and so on. Segmentation by Motivation • This ad for exercise shows men a desired state (as dictated by contemporary Western culture), and suggests a solution (purchase of equipment) to attain it. Segmentation by Benefits • Lava soap lays out the options and invites us to choose the solution. Segmentation by Occasions (Time Poverty) • Time poverty is creating opportunities for many new products (like portable soups) that let people multitask. The Target Marketing Process Identify markets with unfulfilled needs Determining market segmentation Selecting market to target Positioning through marketing strategies © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Target Marketing • Based on consumer characteristics, companies categorize the market and provide products to meet consumers’ needs. • EX: Shampoo Anti-dandruff Oily hair Fine hair Color-treated hair Target market Target Marketing • Differentiated Marketing Need for beauty Working women Need for ballet dancers Need for running joggers Target Marketing • Concentrated marketing Limited resources Concentrate on a secondary market Such secondary market: niche market Foot ball players Dancers Working women Target Marketing • Individual marketing – customization (e.g., Bear Factory) Target Marketing • Mass customization – Characteristics • Needs high technology to customize consumer needs • Expensive goods • Longer waiting time for customers to get the products Positioning • Definition of Positioning Consumers can differentiate a company’s product with others. positioning The largest auction web site position Developing a Positioning Strategy What What position position do do we we have have now? now? Does our creative strategy match it? What What position position do do we we want want to to own? own? The Position Do we have the tenacity to stay with with it? it? From From whom whom must must we we win win this this position? Do we have the money to do the job? job? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Positioning • Why to Position a Product? – Differentiation – Based on consumers’ subjective judgments – Repositioning when the marketing environments change Good Positioning “..positioning is not what you do to a product. Positioning is what you do to the mind of the prospect” (Ries and Trout) • simple message • credible • benefits • consistency Product Positioning • This ad for Sunkist lemon juice attempts to establish a new category for the product by repositioning it as a salt substitute. Positioning Strategies How should we position? By Attributes and Benefits? By Price or Quality? By Use or Application? By Product Class? By Product User? By Competitor? By Cultural Symbols? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Cultural Symbols Can Differentiate Brands © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Develops Brand Images © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Branding and Packaging Work Closely Together Product Decisions BRANDING Brand name communicates attributes and meaning PACKAGING Advertising creates and maintains brand equity Packaging has become increasingly important © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin It’s often customers’ first exposure to product A Package Is More than a Container © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Pricing Must Be Coordinated with Other Factors Pricing Considerations Price must be consistent with perceptions of the product Higher prices communicate higher product quality Lower prices reflect bargain or “value” perceptions Price, Price,advertising advertisingand anddistribution distributionbe mustunified be unified in in identifying the product position A product positioned as high quality while carrying a lower price than competitors will confuse customers © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Some Products Compete on Price – Others Compete on Quality © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Distribution is a Vital Link in the Chain Selecting Distribution Channel Decisions Managing Motivating © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The “Middleman” Can Play a Key Role Brokers Independent Channel Intermediaries Distributors Wholesalers Retailers © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Promotion to Push Goods Through Channels PUSH Point of sale displays, racks, stands Trade deals, special displays Dealer premiums, prizes, gifts Cooperative advertising deals Advertising materials, mats, inserts Push money or “spiffs" Collaterals, catalogs, manuals Company conventions, meetings © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Promotion to Pull Goods Through Channels PULL Sampling, free trial Cents-off promotions Cents-off coupons Combination offers Premiums or gifts Contests, sweepstakes Point-of-purchase Trading stamps © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
