Management Consulting/marketing management


1.Do you think the market segmentation criteria bring market opportunities to product marketer? If so, identify them. Also identify some leading brands currently positioned for women in these segments. Can you think of few for your own innovative product concepts targeted at these segments

2.Several competing philosophies such as the selling concept, production concept and product concept exist. How are these different from one another?  Quote appropriate examples

Market Segmentation
The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments.

Category of Need
The first thing you can establish is a category of need that your offering satisfies. The following classifications may help.

For businesses:
•   Strategic - your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect's top level executive management.
•   Operations - your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate wide communications system. This purchase decision will be made by the prospect's top level operations management.
•   Functional - your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase decision will be made by the prospect's functional management.
For the individual consumer:
•   Social Esteem or Pleasure - your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well).
•   Functional - your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower.
Segmentation of Needs
Then you should establish what the need is and who is most likely to experience that need. Your segmentation will be determined by a match between the benefits offered by your offering and the need of the prospect. Some "need" categories for segmentation include:
Reduction in expenses
Prospects might be businesses that are downsizing (right sizing), businesses that have products in the mature stage of their life cycle or individuals with credit rating problems.
Improved cash flow
Prospects might be businesses that have traditionally low profit margins, businesses that have traditionally high inventory costs or individuals that live in expensive urban areas.
Improved productivity
Prospects might be businesses that have traditionally low profit margins, businesses that have recently experienced depressed earnings or individuals with large families.
Improved manufacturing quality
Prospects might be businesses with complex, multi-discipline manufacturing processes.
Improved service delivery
Prospects might be service businesses in highly competitive markets, product businesses requiring considerable post-sale support or individuals in remote or rural areas.
Improved employee working conditions/benefits
Prospects might be businesses where potential employees are in short supply.
Improvement in market share/competitive position
Prospects might be new entrants to a competitive market.
Need for education
Prospects might be businesses or individuals looking for books on business planning, or seminars on Total Quality Management.
Involvement with social trends
Prospects might be businesses concerned with environmental protection, employee security, etc. or individuals who believe in say 'no' to drugs, anti-crime, etc.
Specific - relating to product/service characteristics
Prospects might be businesses or individuals interested in safety, security, economy, comfort, speed, quality, durability, etc.
Factors that segment prospects
Having determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market. There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories.

For businesses:
Industry by SIC code
This is especially beneficial for vertical market offerings.
Size - revenues, # employees, # locations
In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises.
Job position/responsibility
Examples of offerings might be planning software for managers or cleaning agents for maintenance managers.
Examples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.
Time related factors
Some services in this category are vacation related industries in summer and tax planners in the spring.
An example of a language specific service is a Spanish TV channel.
Status in the industry
You might want to target businesses that are the technology leader or revenue leader or employee satisfaction leader, etc.
To minimize promotion and sales expense you may want to target urban rather than rural or local rather than national prospects.
Future potential
A good example is how Apple Computer supplied products to schools at all levels to condition students graduating into the marketplace.
Ability to make a quick purchase decision
Targeting individual purchasers versus business committees can significantly reduce marketing expense and increase the probability of a quick close.
Access (or lack of access) to competitive offerings
Cable TV business's significant investment in their service delivery system has allowed a near monopoly for some time. IBM's service reputation insured minimal competition during the mainframe days.
Need for customization
Offerings such as police cars, busses for municipalities and specialized computer systems fall into this category.
Product or service application to a business function
Examples are data processing, accounting, human resources and plant maintenance.
For Individual Consumers:
Physical Size
Offerings might be big men's clothing, golf clubs for shorter players, etc.
Creation of or response to a fad
Examples are hula hoops, Jurassic Park T-shirts, pet rock, physical fitness, etc.
Geographic location
Marketers take advantage of location by selling suntan lotion in Hawaii, fur coats in Alaska, etc.
Time related factors
You may be able to target vacationers in summer, impulse buyers during the holidays or commuters at 7AM.
Ethnic products would fall into this category.
Product examples are scarves for women, ties for men, etc.
Product examples are toys for children, jewelry for women, etc.
Social status
This could include country club memberships, philanthropic contributions, etc.
Product and service examples are encyclopedias, scientific calculators, learning to read tools and financial counseling.
This could include products for hunting, fishing, golf, art work, knitting, etc.
Special Interests
You could target cat lovers, science fiction readers, jazz music collectors, etc.
Because the individual is more difficult to reach you may want to segment by urban versus rural, train commuters, people who read Wall Street Journal, etc.
Access (or lack of access) to competitive offerings
Due to high investment capital requirements or timing of market entry you may be able to capture a significant market share in a specific geographical area. Examples might be a trash service, emergency medical support, etc.
Need for specific information
Based on features or content of your offering you can target a market segment. A product might be books on how to start a business or a service might be seminars on how to quit smoking.
Need for customization
Product/service examples are home decoration, fashion wear, personal portraits, etc.
Need for quality, durability, etc.
Product examples are mountain climbing gear, carpenter's tools, etc.
Degree of a product/service ingredient
Segmentation based on prospect preferences is common. An example is dark chocolate for some tastes, light chocolate for others.
Purchase decision influencers
Once you have isolated a specific segment of the market on which to focus, then you can consider more subtle influences on the purchase decision. Some of these are:
Preference for channel of distribution
Many prospects prefer to buy through a specific distributor or wholesaler. For individuals this may be due to subtle, as well as, economic reasons. For example, an individual prospect may immediately think of Wal-Mart or Home Depot when considering an offering like yours. A business often has a preference so they can have a single communication point for all purchases. This also often results in lower purchase prices.
Number of decision makers
When selling to consumers or businesses, the more individuals or groups involved in the purchase decision, the more difficult the sale. Marketing costs for selling bread can stay low because one person normally makes the purchase decision. Car purchases are more complex because the purchase decision normally involves a husband and wife. Business sales to committees often require months to achieve a decision.
Financial strength of the prospect
Less affluent prospects may desire time payments versus a cash purchase and Chevrolets instead of Cadillacs.
Quantity/volume requirements
Restaurants will want large jars of pickles while individuals want small jars. Businesses use large amounts of electricity at predictable times.
Ability to use the offering
Trying to sell to a prospect who lacks either the knowledge or resources to properly benefit from your offering will result in a 'no sale' situation or an unhappy customer. The prospect should have knowledge and resources such as time, equipment, facilities, personnel and complementary products/services.
Commitment required
If the offering requires a high commitment in terms of time, resources or money by the customer then the target should be prospects who 'really need' the offering rather than prospects who get some, but not a lot, of benefits.
Brand awareness/users
Examples are prospects who ask for IBM compatible PC's or Pitney Bowes mailing machines or Winnebago R.V.s
Attitude toward a personality or enterprise
Reputation helps sell AT&T long distance service, IBM computers, Michael Jordan tennis shoes, etc.
Attitude toward price versus value
For example, purchasers of collectors items aren't price sensitive while purchasers of commodity items are price sensitive.
Experience with other products/services your enterprise has offered
You are looking for a reaction like "I liked your first product so I'll try your second."
Prospect bias
Examples are, 'Buy USA', I want a car with a 'solid' feel, fast cars, sweet wines, large print playing cards, etc.
Affiliation with other organizations
Such as the U.S. Chamber of Commerce, AMA, IEEE, doctors, attorneys, pastors, franchisors, entrepreneurs, etc.
After sale support expectations
It is often beneficial to target prospects who have enough expertise that they will require a minimum of after sale support.
Seller Characteristics that can influence purchase decision:
Another form of influence is how the prospect perceives your offering and/or enterprise. If you can determine the characteristics your prospects most value in an enterprise they purchase from, you can identify those your organization possesses and promote them to the prospect.
Unique employee skills, knowledge
Extensive experience with a specific market segment or field of scientific inquiry can be a powerful promotional tool. For example if an enterprise could sat, "Our scientists knows more about corn silk genetic structures than anyone in the world" they would have a strong sales statement.
Special relationships with distribution channels
Product or service accessibility is a critical factor in sales success. If an enterprise could say, "Due to a unique relationship, the XYZ video stores give us more shelf space than any competitor" prospects will likely respond positively.
Customer service capabilities
Prospects like to know that they can depend on post sale support from the product or service provider. A statement like, "We have more service outlets in New Hampshire than any competitor" will help secure sales.
Unique product forms
Credible uniqueness such as, "Our product is the only one that offers dynamic digi-whirling" is appealing to the market.
Manufacturing expertise
The market is always interested in purchasing from the "best". If an enterprise can confidently state, "We are the only enterprise that can manufacture molecular engineered widgets", they have created an image of being the "best".
Reliability is important. A statement like, "We have been in business for 50 years, so you can count on us to be there when you need us" is usually a strong selling point.
Purchase Decision Makers
Finally, a point to consider is, given the characteristics of your offering, what type of decision maker will most likely be interested in purchasing from you. It may be beneficial to rank your prospects based on the following classifications. While you may not be able to make this classification of the prospect prior to the first contact, if your sales personnel are sensitive to these characteristics it can strongly influence your sales strategy.

Ultra Conservative - don't rock the boat, whatever they purchase must be consistent with their current way of doing things.
•   They are most likely interested in products/services that are improvements to existing offerings rather than something new.
•   Once established as a customer they are seldom inclined to review alternatives.
•   Very negative to technically complex offerings or offerings requiring extensive user education.
•   Cost effective offerings are only of interest if they don't disturb the status quo.
•   They are likely to react positively to any volume purchasing opportunities.
Conservatives - are willing to change, but only in small increments and only in a very cost effective manner.
•   Will consider new products/services but only if related concept has been proven to be effective. More likely to purchase improvements to existing offerings.
•   Will probably want to review competitive offerings, but will gravitate to best known offering with lowest risk decision.
•   Negative to neutral when considering technically complex offerings or offerings requiring extensive user education.
•   Strongly influenced by cost effective offerings and/or 'best price' opportunities
Liberals - regularly looking for new solutions, willing to make change (even major change) if the benefit can be shown.
•   Will usually consider new products/services even if the related concept has not yet been proven to be effective, but only if the potential benefits can be specified and understood.
•   Wants offerings that make effective use of technology, but is not interested in offerings just because they use a certain technology.
•   Will always want to review competitive offerings, but will usually choose the one offering the greatest benefit, even if there is some risk involved.
•   Neutral to positive when considering technically complex offerings or offerings requiring extensive user education.
•   Usually concerned with keeping employees informed and educated, so will often consider educational offerings.
•   Strongly influenced by offerings that most closely deliver the 'end results' desired, even if they are not the most cost effective.
•   Often are on social trend bandwagons so react positively to offerings that address these needs.
Technical Liberals - enamored with the benefits provided by high tech solutions and any purchase decision will be biased by the technical content of the offering.
•   Usually consider new products/services even if the related concept has not yet been proven to be effective.
•   Often consider just because they use a certain technology.
•   Will always want to review competitive offerings, but will usually choose the one offering the most hi-tech features, even if there is some risk involved.
•   Consider themselves technically competent and will expect leading edge use of technology.
•   Positive to fanatic when considering technically complex offerings even when requiring extensive user education.
•   Conversion costs usually not a major concern if technical benefits are there.
•   Not particularly concerned with keeping employees informed and educated, so educational offerings are not of great interest.
•   Strongly influenced by offerings that most closely deliver the 'end results' desired, even if they are not the most cost effective.
Self Helpers - consistently defines/designs solutions to their problems, likes to acquire tools that help in the innovation process.
•   Will usually consider new products/services, but the related concept must have been proven to be effective.
•   Often consider just because they use a certain technology that is relevant to the development program they have underway.
•   Will always want to review competitive offerings, but will usually choose the one offering the most effective 'do it yourself' features.
•   Usually consider themselves technically competent and will expect very effective use of proven technology.
•   Not especially inclined toward technically complex offerings, would rather have user friendly, but thought provoking, offerings.
•   Conversion costs usually not a major concern if offering promises potential for innovation.
•   Usually concerned with keeping employees informed and educated, so educational offerings are of interest.
FMCG   PRODUCT   ------Soft Drinks

1.Demographic variables
*gender Male and Female
*Education Primary, High School, Secondary, College, Universities.
2. socioeconomic status
3. Geographic variables
*region of the  country,NORTH / SOUTH/ EAST/ WEST/CENTRAL etc.
*metro/ rural  : Metropolitan Cities, small cities, towns.
*Density of Area Urban, Semi-urban, Rural.
4.Psychographic variables
*life style
5.Behavioural variables
*benefit sought
*product usage rate
*brand loyalty
*product end use
*readiness-to-buy stage
*decision making unit
*income status
MARKET  SEGMENT  - young  people.
TARGET - age  group  [ 12 ---35]
POSITIONING - lifestyle  entertainment.

IN   UNIVERSAL  TERM, the nano   is   a   small  car.

-nano  is  specifically  designed  for the  indian  market.
-it is designed  for the  indian  market
-it is  designed  ''as a  value  for  money''
-it  is  designed  with  india  made parts.



-reduction  in capital  expenses.
-reduction in  operation   expenses.
-reduction in  maintenance  expenses.

-improvement in the   cash flow.
-improvement  in  the  working  conditions  for  field  employees.
-improvement  in   the   productivity  of  field employees.

-improvement  in   the  business  market  coverage
-improvement  in  the  business  results.

1.Demographic variables
*gender Male and Female
*sexual orientation
*family size
*family life cycle
*Education Primary, High School, Secondary, College, Universities.
2. socioeconomic status
3. Geographic variables
*region of the  country,NORTH / SOUTH/ EAST/ WEST/CENTRAL etc.
*metro/ rural  : Metropolitan Cities, small cities, towns.
*Density of Area Urban, Semi-urban, Rural.
*climate Hot, Cold, Humid, Rainy.
4.Psychographic variables
*life style
5.Behavioural variables
*benefit sought
*product usage rate
*brand loyalty
*product end use
*readiness-to-buy stage
*decision making unit
*income status

THERE  ARE  NUMEROUS   EXAMPLES---here are  few.

*market  segement -----female/ age 18--35
*positioning -----upmarket/ lifestyle  product
*market  segment ---business executives/ rich  with large income.
*positioning -----upmarket / busy lifestyle/handy  in use.
*market  segment----- middle  class.
*positioning -----affordable / beautiful  as  film  stars.
*market  segment -----wealthy/ upmarket  executives.
*positioning------ peace  of  mind   for  all  situations.
*market  segment -----business  oriented  people.
*positioning --latest  technology/ multipurpose  use.
segmentation variables you will consider to segment the market for a 150 cc premium motorcycle.

150  cc  BIKES
Quick Facts
Engine: 134cc Air-cooled, single
Power: 13.5PS@ 9,000rpm
Torque: 11Nm @ 7,500rpm
Transmission: 5-speed manual,
Wheelbase: 1,325mm
Weight: 122kg
0-60 km/h: 4.7seconds
Top speed: 112km/h
Fuel efficiency (overall): 56.5kmpl
Bajaj Pulsar 135 LS (Ex-showroom, New Delhi): 51,000
1. High-revving engine with oodles of torque and best-in-class power-to-weight ratio
2. Extremely well-done styling on this baby Pulsar. It is light, fast and a lot of fun!

1.Demographic variables
*gender Male and Female
*sexual orientation
*family size
*family life cycle
*Education Primary, High School, Secondary, College, Universities.
2. socioeconomic status
3. Geographic variables
*region of the  country,NORTH / SOUTH/ EAST/ WEST/CENTRAL etc.
*metro/ rural  : Metropolitan Cities, small cities, towns.
*Density of Area Urban, Semi-urban, Rural.
*climate Hot, Cold, Humid, Rainy.
4.Psychographic variables
*life style
5.Behavioural variables
*benefit sought
*product usage rate
*brand loyalty
*product end use
*readiness-to-buy stage
*decision making unit
*income status
Why a 150 cc motorcycle?
Almost all of the motorcycles in entry level segment have engine capacity of 100 or 125cc. But having a motorcycle with engine capacity of 150cc in the entry level segment will make a big difference. It is a segment where motorcycle is used more for utility purpose rather than commuter purpose.
This segment demands a robust motorcycle that can carry a heavy load and can run on rough roads, so the original idea is to have a 150cc motorcycle which has minimum 50% more torque than 100cc motorcycle and only 10% less fuel efficiency than 100cc motorcycle.  

“What I want is a VEHICLE   on a two-wheeler that can take two or three riders and the extra load of products on it, or simply a 150-cc.”


Benefits of market segmentation
There are a many benefits that can be resulting from segmenting a market:
1.   Segmentation is a useful approach to marketing for the smaller firms. It allows target markets to be matched to company competencies and makes it more achievable for the smaller firms to create a defensible niche in the market.
2.   It assists recognizing gaps in the market that are not served or under-served. These can provide areas for new product development or extension of the existing product or service range.
3.   In mature or declining markets it may be possible to identify particular segments that are still in growth. Focusing on growth segments when the overall market is declining is a major strategy in the latter stages of the product life cycle.
4.   Segmentation allows marketers to match a product or service to the needs of the target market.
Also market segmentation allows:
1.   Allocate company resources to the segments potentially more profitable;
2.   Fine-tune a range of products to demand rather than occupy a position of strength in some areas and ignore or minimize other areas of potential profitability important;
3.   To give the company the opportunity to detect early signs of a fundamental evolution of the target market, enabling it to adjust to time the market;
4.   Establish more precisely the main advertising and quantify the segments covered by each of these routes;
5.   Select media advertising more responsive to the needs and allocate more adequately the total budget between them;
6.   Determine the periods that are most conducive to advertising campaigns, ie those where the target is most receptive.
The segmentation is neither more nor less than a year classification of consumers dialing a given market. The interest of segmentation is that involves a significant number of people depending on the characteristics that unite them and set them apart from other groups, these characteristics may be demographic, of course, but the most powerful and interesting are those attribute to the features of the lifestyle of the person, and its values (psychographic segmentation).

Why there to find new segments?
Companies are constantly looking for new segments, to develop marketing approaches even more powerful, more adapted to join a convincing potential buyers of the product / service.

They not new consumers But there is a new way to define one or more groups of people, to find what unites them, namely the values, lifestyles sought, in fact what is important for all members of this group of people. Companies are constantly looking for a new segment that portrayed a marked and important change in these values and lifestyle pursued (or claimed) by a growing number of people. That was the whole point of the so-called "emerging segment" because the people who compose it may present needs and aspirations that are not well met by supply of products / services.

Successful segmentation requires the following.
1.   homogeneity within the segment
2.   heterogeneity between segments
3.   segments are measurable and identifiable
4.   segments are accessible and actionable
5.   segment is large enough to be profitable
These criteria can be summarized by the word DAMAS:
1.   D Differential: it must respond differently to a different marketing mix
2.   A Actionable: you must have a product for this segment to be accured
3.   M Measurable: size and purchasing power can be measured
4.   A Accessible: it must be possible to reach it efficiently
5.   S Substantial: the segment has to be large and profitable enough
Variables Used for Segmentation
1. Geographic variables
•   region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
•   country size/country size : Metropolitan Cities, small cities, towns.
•   Density of Area Urban, Semi-urban, Rural.
•   climate Hot, Cold, Humid, Rainy.
2. Demographic variables
•   age
•   gender Male and Female
•   family size
•   family life cycle
•   education Primary, High School, Secondary, College, Universities.
•   income
•   occupation
•   socioeconomic status
•   religion
•   nationality/race (ethnic marketing)
•   language
3. Psychographic variables
•   personality
•   life style
•   value
•   attitude
4. Behavioral variables
•   benefit sought
•   product usage rate
•   brand loyalty
•   product end use
•   readiness-to-buy stage
•   decision making unit
•   profitability
•   income status
When numerous variables are combined to give an in-depth understanding of a segment, this is referred to as depth segmentation. When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a buyer profile. When the profile is limited to demographic variables it is called a demographic profile (typically shortened to "a demographic"). A statistical technique commonly used in determining a profile is cluster analysis. Other techniques used to identify segments are algorithms such as CHAID and regresion-based CHAID and discriminant analysis.

To compete successfully in today’s volatile and competitive business markets, mass marketing is no longer a viable option for most companies. Marketers must attack niche markets that exhibit unique needs & wants. Market segmentation is the process of partitioning markets into groups of potential customers with similar needs or characteristics who are likely to exhibit similar purchase behavior.

Market segmentation is the foundation on which all other marketing actions can be based. It requires a major commitment by management to customer-oriented planning, research, implementation & control.
The overall objective of using a market segmentation strategy is to improve your company’s competitive position and better serve the needs of your customers. Some specific objectives may include increased sales, improved market share and enhanced image.
There are four major benefits of market segmentation analysis and strategy:

Designing responsive products to meet the needs of the marketplace

Developing effective and cost-efficient promotional tactics & campaigns

Gauging your company’s market position — how your company is perceived by its customers and potential customers relative to the competition

Fine-tuning current marketing strategies
A three-step process is used to develop a market segmentation strategy:

Segment Identification — determining a given number of homogeneous market segments based on selected segmentation variables and criteria. Segments should be customer-focused, a justifiable size, distinguishable, accessible, accountable & profitable.

Market Selection — selecting one or more groups to target for marketing activity. It is impossible to pursue every market opportunity so you must make strategic choices based on customer needs, competitive opportunities, corporate objectives, and your firm’s financial, technical & marketing resources.

Positioning — carving out a market niche for your firm. This may be accomplished by searching out unique marketing advantages, seeking new market segments that competitors are not cultivating, or developing new approaches to old problems. Your positioning should be based on a real (e.g., lower cost, superior quality) or intangible (e.g., company reputation) competitive advantage.

Benefits of segmentation
Segmenting your customers into groups according to their needs has a number of advantages. It can help you to:
•   identify your most and least profitable customers
•   focus your marketing on the customers who will be most likely to buy your products or services
•   avoid the markets which will not be profitable for you
•   build loyal relationships with customers by developing and offering them the products and services they want
•   improve customer service
•   get ahead of the competition in specific parts of the market
•   use your resources wisely
•   identify new products
•   improve products to meet customer needs
•   increase profit potential by keeping costs down, and in some areas enabling you to charge a higher price for your products and services
•   group your customers by factors such as geographical location, size and type of organisation, type and lifestyle of consumers, attitudes and behaviour

This is where market segmentation comes in.
Divide and Conquer
Market segmentation focuses on that subset of prospects that have the greatest potential of becoming customers and generating revenue.
Companies who segment their markets match their strengths and offerings to the groups of customers most likely to respond to them.
•  Differentiate your products and services to meet your customer needs and desires.
•  Design or redesign new products and services to meet your market needs.
•  Find hidden needs and make improvements to your existing products.
•  By selecting and focusing on the most responsive segments to the exclusion of others, marketing can be created to more effectively fit your consumers. Finding, understanding and focusing on the needs of your best customers can make you a market leader.
•  Target your marketing mix to the customers most likely to want your products or services
•  Identify behaviors and buying motives for your products.
•  Identify your most and least profitable customers.
•  Help you avoid unprofitable markets.
•  Increase brand loyalty and decrease brand switching.
Learning more about your competitors makes you more effective
•  Improve your competitive positioning to be more accurate and better differentiate you from the competition.
•  Reduce competition by competing in a more narrowly defined market and establishing a niche. Market segmentation is a proven way of improving profitability. By focusing on individualized sub groups, you're better able to meet their needs and gain higher market share and profits.
•  Refine your pricing to maximize revenue.
•  Find markets where you can increase your price.
•  Optimize your marketing resources and get the most impact for your investment
•  Focus and match your activities to things you can do effectively and profitably When segmentation is done right, you get the highest return for your marketing expenditure.



Company Orientations to the Marketplace

What philosophy should guide a company marketing and selling efforts? What relative weights should be given to the interests of the organization, the customers, and society? These interest often clash, however, an organization’s marketing and selling activities should be carried out under a well-thought-out philosophy of efficiency, effectiveness, and socially responsibility.

Five orientations (philosophical concepts to the marketplace have guided and continue to guide organizational activities:

1.   The Production Concept
2.   The Product Concept
3.   The Selling Concept
4.   The Marketing Concept
5.   The Societal Marketing Concept


The Five Concepts Described

  The Production Concept. This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features.



Their focus  is
-can we  PRODUCE    the  product
-can  we  PRODUCE   enough  OF    the  product / at the  low cost.


The Product Concept.

This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs. Management might commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead people to beat a path to its door.

Product Concept

Developing products that are aligned with current or emerging customer needs . Technology companies are often challenged to develop competitive new products while meeting short windows of opportunity. Success requires effective decision making about product features, packaging, positioning, and pricing.

PRODUCT  CONCEPT  approach  helps  to  achieve  this.

Product  CONCEPT   involves:
•   Exploratory  research
•   Needs Segmentation
•   Opportunity Assessment
•   Voice of the Customer
•   Concept Viability
•   Competitive Assessment
•   Concept Optimization
•   Ideation
•   Portfolio Management
•   Business Case Rationale
•   Product Retrieval
•   Market Research
•   Trend Monitoring

New Product Concept
There are as many methods to screen new product ideas as there are consultants. Perhaps most, if not all of them, are valid. But small companies cannot afford to incur costly product development failures as part of "the normal course of big business." Even one product failure in a small company may threaten its survival if a large amount of time, scarce resources, and personnel are committed to it.
A small company often survives on its reputation with key customers, which can be threatened or weakened with product development failures. The risks of product development failure can be reduced with carefully constructed marketing strategies, even for small companies.
Step 1. Screen concepts against your company's marketing strategies. Concept screening against new or pre-existing company marketing strategies will reinforce company focus and use of scarce resources to successfully introduce new products.
A good overall company marketing strategy acts as a guideline for action. The marketing strategy should:
•   define the target buyer, demographically and by lifestyle, if appropriate
•   translate the company mission into a measurable annual objective
•   tell how the goal will be accomplished in terms of:
•   marketing spending vs. competition in the category
•   brand positioning
•   pricing actions
•   product quality
•   establish new product introduction standards
•   frequency
•   achievement of overall marketing objective
•   response to competitive new product introductions
If the new product concept does not fit the company's overall marketing strategy, serious consideration must be given to either changing the company marketing strategy or not pursuing the new product concept.
Step 2. Screen new products against company sales and profitability minimums. A new product must have the potential to generate minimum sales and profitability goals for the company with THE  RIGHT  PRICING STRUCTURE. For example, many large consumer goods companies have minimum sales goals of $20 to $50 million per year, with a minimum gross margin before spending an overhead of 60 percent (i.e., cost of goods = 40 percent).
If a small company is competing with much larger companies, knowledge of these large company new product minimums can provide the basis for a successful new product development and marketing strategy. Most small companies would be very pleased with dominating niche market segments that amount to $5 to $20 million in total competition sales per year.
Step 3. Screen your new product concept with key customers and buyers. An important step that large and small companies often overlook is obtaining input and evaluation of new product ideas at an early stage with key customers (e.g., key account buyers and their management) and end user buyers. Business owners or managers may become so committed to a favorite new product development concept that they proceed to full development of a product prototype before outside input is obtained.
In certain high-tech industries and pharmaceuticals, where years and millions of dollars are committed to each new product development project, high security and long, complex development timetables may be necessary. Foregoing key customer and end-user input is part of the risk and cost of doing business in these industries.
QUALITITATIVE   AND   QUANTITATIVE  CONSUMER  RESEARCH  can be invaluable in this stage, as well as in earlier development stages.


  The Selling Concept.

This is another common business orientation. It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically sho9w buying inertia or resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.


The  firm  sold  what one  produce and  try  to  convince the  customers
through  advertising  and  personal  selling.

Their focus  is
-can we  sell  the  product
-can  we charge enough  for  the  product.


What  is  Sales ?

It  is  a  process  by  which  

-one  identifies   the  people, who  have a  need. [ PROSPECTING]
-one determines  the  needs  of  the  people.[ NEEDS ]

-one determines  a way  of  finding  a  solution to the  prospect's  problem.[ PROPOSE]

-one determines the  way of  communicating  your product  as a  solution. [RECOMMENDING]

-one determines the value for the product for  the  prospect.[ ADVOCATING  YOUR PRODUCT].

-one determines  / sells  benefits  of the  product   to the  prospect. [ SELLING BENEFITS]

and then  creating a  transaction for exchanging the product for  
a  value. [ CLOSING  THE SALE ]

and  thus  creating a  satisfaction to the buyer's needs/wants.


  The Marketing Concept.

This is a business philosophy that challenges the above three business orientations. Its central tenets crystallized in the 1950s. It holds that the key to achieving its organizational goals (goals of the selling company) consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its selected target customers. The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability.

The marketing  concept  is the  philosophy  that  the  firm  should  analyze
the needs of  their  customers[ current /potential ]   and  then make
the  decisions to  satisfy  those needs , better  than the  competition.


What  is  Marketing ?

It  is  a  process  by  which  

-one  identifies  the  needs and wants  of  the  people.
-one determines  and  creates a  product/service to meet  the  needs
and  wants. [PRODUCT]
-one determines  a way  of  taking the  product/service to the market
place. [PLACE]
-one determines the  way of  communicating the product  to the
market  place. [PROMOTIONS]
-one determines the value for the product.[PRICE].

-one determines  the  people, who have  needs/ wants. [PEOPLE]

and then  creating a  transaction for exchanging the product for  
a  value.
and  thus  creating a  satisfaction to the buyer's needs/wants.

TERMS  to  understand.
1.Product/Service  means  a  product or service or idea to satisfy
  the  people's  needs /  wants.
2.Needs  mean  when  a  person feels deprived of something.
3.Wants  mean  when a  person's  need  is  formed / shaped
  by  personality, culture, and  knowledge.
4.Value  means  the  benefits  that the  customer  gains from
   owning  and  using the  product  and  the  cost  of  the product.
5.Satisfaction  means  the extent  to  which  a  product's
  perceived  performance  matches  a  buyer's expectation.
6.Exchange means the  act of obtaining a needed/ wanted
  object  by  offering  something  in  return.
7.Transactions  mean a  trade  off  between  a  buyer / a seller
  that  involves  an  exchange  at  agreed  conditions.

Marketing is based on identifying, anticipating and satisfying customer needs effectively and profitably. It encompasses market research, pricing, promotion, distribution, customer care, your brand image and much more.

There are many marketing concepts for  businesses to consider marketing and planning, but here are our Top 10 list of marketing concepts for  business marketing.

Concept Marketing # 1: Consistency
Consistency is the number one marketing concept for  firms marketing only because it is left to marketing concepts for many companies. I worked with a long list of customers, large and small, are very inconsistent in all areas of their marketing. Consistency reduces the cost of marketing and increase the effectiveness of branding.

Concept Marketing # 2: Planning
Once  business owners decide to be compatible with their marketing, planning is the next great idea to engage. Planning is the most vital  business marketing or any level of marketing, incidentally, and so many owners, marketing and CMO same evil. Put the time in planning your marketing strategy, budget and other concepts presented here to ensure success.

# 3 Concept Marketing Strategy
Immediately follows the strategy planning because your strategy is the basis for the rest of your marketing activities. In the planning process, you must develop your strategy: who you target, how you target them and how will you keep as a customer.

Concept Marketing # 4: Target Market
Target market is another key concept for  business marketing. Defining precisely which allows you to target  business owners to focus on customers and reduce waste marketing. A well-defined target market will any other marketing concept so much easier to implement successfully.

Concept Marketing # 5: Budget
Even if it is listed at number 5, budgeting is important throughout the process. Creating a marketing budget is usually the hardest and most inaccurate of the  business marketing. Most  business owners do not have much experience in marketing, so that their budgets end generally biased. The most important part of this marketing concept is to establish a marketing budget. From there, we can worry about how to distribute your funds available.

Concept Marketing # 6: Marketing Mix
The marketing mix is generally defined as product, price, place and promotion. As a business owner, you must decide precisely on your product (or service), prices, where and how you distribute your products, and how will you let everyone know about you and your products.

Concept Marketing # 7: Web Site
In today's market, a company of any size must have a website. I hate when I see companies that have a website page with updated information. Customers, whether businesses or consumers will search the web more than 60% of the time before making a purchasing decision. The marketing concept contains a large number of additional components, but you should at least put up a small website of any kind and maintain.

Concept Marketing # 8: Branding
Many  business owners also neglect of this concept. Small and medium enterprises should focus on the marketing concept as well as larger corporations do. The image consists of photos, logo, design, layout, makeup, and the image of your products and your company. Branding is how your customers perceive (please place great emphasis on that word!) Your product and corporate. Be sure to pay special attention to this type of brand building are each step of your planning and implementation.

Concept Marketing # 9: Promotion and advertising
The promotion and advertising is very complex marketing concept, but should be considered for any type of activity and its products and services. Once you commit the Previous 8 marketing concepts, you finally leave your target market know about you and your products. A good promotion and advertising will result in brand recognition efficient and, ultimately, increased sales.

Concept Marketing # 10: Customer Relationship Management (CRM)
The concept of customer relationship management has become a huge industry in the world market. There are many types of software and services to help companies of all sizes address their customer relationship management. As it is much more available, usually for a large sum of money,  business owners usually this concept as something they are not large enough to or have enough money to implement. Do not be fooled by large industry that has evolved from the concept. Maintaining good customer relationship management is essential to create loyal customers and consistent.

The list of marketing concepts should be considered, studied, planned and implemented, especially by small businesses to be successful. In addition, your marketing does not stop there. Each company is unique and additional components that must be considered, but this list will launch any marketing plan.
Marketing can be categorized as :
•   Differentiated marketing-when the same product is targeted to different segments of customers
•   Undifferentiated marketing-when the same product is targeted to all customers.
•   Concentrated marketing- when only a particular segment of customers is the matter of concentration.

Some types of marketing are following :
•   Internet marketing or e-marketing or online marketing
•   Telephonic marketing
•   Door to door marketing
•   Personalized marketing
•   Digital marketing
•   Article marketing
•   Television marketing
•   Evangelism marketing
•   Social marketing
•   Reality marketing
•   Sports marketing
•   Guerrilla marketing
•   Engagement marketing
•   Cause marketing
•   Search engine marketing
•   Viral marketing
•   Global marketing
Marketing is based on identifying, anticipating and satisfying customer needs effectively and profitably.

It encompasses  the  following  elements  and  the  most  popular  company
which  uses   all  these  is  COCA  COLA  CORPORATION
and  they do it  very  well.

- market research,
[conducts  marketing  research  continuosly--pre-product/during  product  launch/
during  the maturity/ consumer research/retail research/test  marketing  etc etc
-product planning / development ,
[they  plan/  develop  products  in  a  scientific  manner, tailoring
it  to  the  exact  taste  of  the  consumers]
-product  pricing,
[conduct  price  research and  position  the  price  point
where the  consumer can afford / the  company makes  good profit.]
-product  marketing
[the  company  conducts  one  of  the  most  effective  product  marketing
programs in the  world.]
[the  company  has   a  wide  network  of   sales  representatives
in  almost  over   180 countries]
[the  company  applies  varieties of  promotions including
sales promotion/trade  promotion/consumer  promotion/
advertiisng/ public relations ]
[when  it comes  to  distribution, they  have  an  unmatched  distribution network.
they  go  for  extensive and  intensive  coverage  of  the  market---that covers
supermarkets/corner stores/gas  stations/ schools/colleges/convenience stores/sports complex etc
-customer care,
[the  company has   a  well crafted  customer  care  program for  
the  consumers.]
[when  it  comes to  branding,  they  are  second to  none  in the  world
''COKE'' say  no  more]
[the company  has  an extensive  program  on  merchandising  like
external displays / internal  displays ]
[ the  company  has  a   strong presence  in  the  retail field
supported  by  active  merchandisers]
-strategic  marketing management  
[the  company  has  a  strong  team  to  manage  the
strategic   aspects  of  market--it  is highly  research based]
-market  forecast.
[the  company  uses  the  finest  software  to  develop
the  demand  planning  and  market  forecast and  sales  forecast]
 -consumer  behavior
[the  company  continuously  monitors  the  consumer  behavior
with  respect  their  products]
 -organizational  buyer  behavior.
[the  company  continuously  monitors  the  organization  buying   behavior
with  respect  their  products  ---like  schools/ colleges/ business  houses]
-Strategic market Planning
[the  company  has  a  strong  team  to  manage  the
strategic   aspects  of  market--it  is highly  research based]
-Market  Development.
[ the  company  develops   the  market   through
*geographical  coverage  increase.
*current  customers usage  increase
*new customers  increase
-marketing  environments
[the  company  is  sensitive  to  the  environment
and  has   a  number  of  societal  marketing  programs.
-market  segmentation/ targeting
[THE  company  uses  the  segmentation   techniques
heavily  targeting   the  ''15 --45''   age  group]
-field  sales  planning /  development
[the company   carries out  regular  field  sales
planning  and  development program to  sharpen/ tune
the  field  sales  team.

Successful businesses focus on getting the basics of marketing right.

Marketing is based on identifying, anticipating and satisfying customer needs effectively and profitably. It encompasses market research, pricing, promotion, distribution, customer care, your brand image and much more.
Some of the things that the company does  in   marketing  practices is to:
*Have a marketing team or individuals who have qualifications in marketing
*Review  brand, its image and what it stands for
*Consider the consistent use of a strap line in the  advertisements
*Launch a website and think about e-marketing and interactive website pages to add value
*Adopt the correct pricing strategy for the  market sector, competitors, customers & profit
*Create a database of all the  retailers so that you can market to them again
*Know your consumers - find out where they are spending their time and money
*Employ specialists for website creation or use external experts in the field
*Use external professionals for press releases
*Support anyone wanting to train in marketing
*Have a consistent brand message on all literature, websites, business cards & letter heads
*Create a mission statement
*Always plan properly, there are packages such as Microsoft Project which can help
*Use market research to understand  competitors, spot opportunities and lessen risks
*Use the database to market either by postal campaigns, e-mail or even mobile marketing
*Advertise in the correct places, and analyse and learn from each campaign
*Enlist professional designers for  literature, business cards and logos
*Stick to what you do best and let the experts help with their specialist knowledge.

  Distinctions between the Sales Concept and the Marketing Concept:
1.   The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on the needs of the buyer.

2.   The Sales Concept is preoccupied with the seller’s need to convert his/her product into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of the product as a solution to the customer’s problem (needs).

  The Marketing Concept represents the major change in today’s company orientation that provides the foundation to achieve competitive advantage. This philosophy is the foundation of consultative selling.

  The Marketing Concept has evolved into a fifth and more refined company orientation: The Societal Marketing Concept. This concept is more theoretical and will undoubtedly influence future forms of marketing and selling approaches.

  The Societal Marketing Concept.

This concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s well-being.

  This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services.
Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society?

  The marketing concept possibily sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty buty unhealthy food. The hamburgers have a high fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems.

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Leo Lingham


management consulting process, management consulting career, management development, human resource planning and development, strategic planning in human resources, marketing, careers in management, product management etc


18 years working managerial experience covering business planning, strategic planning, corporate planning, management service, organization development, marketing, sales management etc


24 years in management consulting which includes business planning, strategic planning, marketing , product management,
human resource management, management training, business coaching,
counseling etc




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