Targeting, Positioning, and Perceptual Mapping

Targeting, Positioning, and Perceptual Manner

• Undifferentiated marketing approaches the marketplace as one large segment
• All customers receive the same product offering and marketing mix
• This works for products like salt and bananas
• Differentiated targeting occurs when an organization simultaneously pursues several different market segments, usually with a different marketing mix strategy for each
• Frito-Lay offers more than 10 regional flavors
• Loreal has brands for both younger customers just starting to use makeup and older customers who will purchase cosmetics at a higher price point
• Niche marketing involves targeting a large share of a small market segment
• Niche product firms possess a unique offering or specialization
• Ies.com focuses on men's neckties and related products
• There can be multiple niche markets within the same product
• Pizza Fusion targets customers looking for healthier and environmentally friendly options
• Papa Murphy's leads the take-and-bake pizza niche
• Little Caesar's $5 hot-n-ready pizza targets customers looking for value and time savings

Perceptual Maps

• A perceptual map provides a tool for understanding competitors' positions in the marketplace, creating a visual of where products are located in consumers' minds
• They can be developed based on marketing research or knowledge about a specific market and provide guidance on potential market positions that might be unserved or underserved
• Data comes from the positioning process (understanding the competitor's position, defining competitive advantage, and evaluating feedback)
• They visualize what other companies are doing and the positions of their competitors based on marketing research or knowledge from a specific market
• They helps marketers see how customers view their brand compared to competitors, guiding decisions like:
  • Find gaps in the market to create or adjust products
  • Align prices with how the brand is perceived
  • Focus messaging on the brand's strengths or reposition it to change perceptions
  • Improve availability if the brand is seen as hard to access
• Repositioning involves re-establishing a product's position to respond to changes in the marketplace

Products, Branding, and Packaging

• The core product is the fundamental benefit
• The actual product is the form and features
• The augmented product includes experiences, services, and warranties
• A product line is a group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations
• A product mix is the total group of products that an organization makes available to customers
• The breadth (or width) of a product mix refers to how many product lines an organization offers
• The depth of a product mix refers to how many individual product items are offered within each line
• Line Extension: When a brand adds variations to what they already do
• Brand Extension: When a brand tries something new but related
• A brand is a name, term, design, symbol, or any other feature that identifies one marketer's product as distinct from those of other marketers
• Individual Branding – naming each product differently
• Family Branding – branding all of a firm's products with the same name
• Trademarks: Symbols, names, words, or designs that identify and distinguish a company's goods or services, protecting branding elements from being used by others
• Copyrights: Legal protections for original works of authorship, allowing creators to control how their works are used, reproduced, or distributed
• Trade Characters: Fictional or real characters used in branding and marketing to represent a company or product

Trademarks and the Law

• In the United States, the United States Patent and Trademark Office (USPTO) issues trademarks, and the U.S. Copyright Office(part of the Library of Congress) handles copyrights
• Legal obligation of a brand owner is to protect itself to keep others from using its brand
• Brand owners must protect their trademarks, copyrights, and patents to maintain exclusive rights and prevent unauthorized use
• If they fail to enforce their rights, they risk losing legal protection or exclusivity, and active defense preserves the brand's value and identity

FDA and FTC

• The FDA ensures labeling and packaging for food, drugs, and cosmetics are accurate, safe, and non-misleading
• The FTC prevents deceptive labeling and packaging practices for consumer goods, ensuring transparency and accuracy for informed decisions
• Both agencies work to protect public health and prevent consumer deception

New Product Development and the Product Life Cycle

• The 4 stages of a product life cycle include:
  • Introduction: Sales start at 0, marketing requires investment, with a typical success rate of 15-25% for new products
  • Growth: Sales rise quickly, competitors enter, focused on strengthening market share and building loyalty
  • Maturity: Sales level off, competition intensifies, marketing focuses on promotion, distribution, and extensions
  • Decline: Sales fall, product loses distinctiveness, marketing pulls resources away
• The 5 categories of product characteristics that affect adoption/diffusion rates include:
  • Innovators: first adopters
  • Early adopters: careful choosers
  • Early majority: adopting just before the average person
  • Late majority: skeptics adopting when necessary
  • Laggards: the last adopters, who distrust new products
• The phases of new-product development include:
  • Strategy development: determining company direction
  • Idea generation: conceiving new product concepts
  • Idea screening: determining fit with company's marketing strategy
  • Business Analysis: determining profitability
  • Product development: prototyping and testing
  • Test marketing: introducing to a geographically limited market
  • Product launch: producing, distributing, and promoting
• An effective test market mirrors the overall target market in terms of demographics, etc, and the marketing strategy must be tested
• Running a test market can be difficult due to costs and the possibility of imitation from competitors
• Product deletion involves eliminating a product from the product mix

Marketing Services

• Intangibility: not physical or able to be touched, stored, or possessed
• Heterogeneity: experience changes each time and cannot be mass-produced
• Inseparability: production and consumption occur at the same time
• Perishability: cannot be stored indefinitely
• Service quality is how good the service experience is while customer service is a business activity
• Quality is based on an objective measure of goodness, technical/functional qualities, and an evaluative perspective
• The 4 potential gaps for service marketers in the “service gaps” model include:
  • Knowledge gap: between customer expectations and perceptions
  • Design and standards gap: between perceptions and standards
  • Delivery gap: between standards and actual service
  • Communications gap: between actual service and company communication
• Service recovery means the actions taken by a company in response to a service failure to improve customer satisfaction

Pricing

• Price competition emphasizes price as an issue and matching or beating competitors' prices so must be the low-cost seller and able to change prices rapidly and aggressively
• Price elasticity of demand is a measure of the sensitivity of demand to changes in price
• Elastic Demand: Consumers are sensitive to price changes.
• Inelastic Demand: Consumers are less affected by price changes.
• Markup pricing means adding extra money to the cost of a product so a business can make a profit
• Price skimming involves setting a high price at first and then lowering it over time
• Penetration pricing sets a relatively low price to drive market share/value perceptions
• Differential pricing charges different prices to different buyers for the same product
• Psychological pricing encourages purchases based on consumers' emotional responses, rather than on economically rationale
• Odd-even pricing is when an ending price is an odd or not rounded number
• Shrinkflation is when companies make products smaller but keep the price the same
• Dynamic or surge pricing is a strategy where businesses adjust prices based on changing demand