• Sat. Feb 27th, 2021

4 of 20 Marketing Basics : Myles Bassell 2/8

alright so we're gonna pick up where we left off last time which is a discussion about segmentation if we're talking about different types of segmentation and we're going to continue we're just going to review a couple of key points so today we're talking about chapter 9 we're going to talk a little bit about chapter 10 and touch a bit about chapter 11 but don't worry next time we're going to get into chapter 10 in more detail and also chapter 11 but I just want you to see the big picture of where we're going and how segmentation is so significant segmentation and positioning and then how that ties to products and then how the products are related to grams and one of the important takeaways is that the brand is what's wrapped around the product that's what this visual here suggests because what if we say that all products in a given category have the same functionality so for example cars will provide transportation but makes one car unique from another is the fact that they're wrapped in different brands and the brand is what differentiates one product from another and communicates the value and a brand is a very complex so entity brands have personalities and identities and importantly brands and accumulate equity so he took spend a lot of time talking about grant equity we're going to certainly talk about that in a lot more detail in chapter 11 because for example the coca-cola brand has its estimated a value of about 68 billion dollars which is quite significant when you agree and they're almost seventy billion dollars there was like 68 million dollars and you might think well that's a lot to 68 billion dollars I mean there's many companies that are even that big right so when I say 68 billion dollars that's not the assets of the entire company that's just a value of their brand that's why that's so compelling and why like from day one we started to talk a bit about branding and it's important so if you look at companies that are successful in the marketplace they accumulated a portfolio of power brands but we will talk more about that let's some try to continue where we left off a regarding segmentation and I wanted to just briefly recap who could tell me some of the key criteria for segmenting a market remember we said there are several things that we look at when we when we segment a market and we said there's also some criteria that we use when we're selecting particular segments so we're not going to try and penetrate all segments there's some that are more preferable than others but first let's talk about some of the criteria that we use in segmenting the market that tummy n/a okay I'm glad you ended by um so segments in centers that we identify we want them to have the customers to have other potential customers to have similar needs and wants is what better saying absolutely so when we divide a market into some markets or we aggregate potential customers into these groups or segments certainly what better saying is right on is we want them to have similar needs and wants and go ahead large absolutely large now remember I said last time it doesn't mean that a small segment which we refer to as a niche it doesn't mean that we can't be successful with focusing on a niche but more often than not it is important to identify segments that are large reachable right reachable and they talked a bit about that what that means in other words that were able to access them through our marketing communications plan which is very important each age okay both ages are a type of segmentation line as a type of demographic segmentation it's not one of the requirements but I see what you're saying we could certainly segment a market by age at people who respond and similar to what you're working right so respond to the marketing mix in a similar way so we have large reachable then says similar needs and wants and response to the marketing mix in a similar way now who could explain that what does that mean response to the marketing mix in a similar way what does that actually mean can tell us how type of behavior when it comes to consuming the product like is that such like part of it could be they can pay the same prices or they buy online or go to the store yeah so at a certain price a significant percentage of those in the target market would purchase the product so price is certainly let me say marketing next price is one of the elements and that they're going to respond in a similar way and also you suggested place which means that they shop for the product in a similar channel of distribution so last time we talked about the fact that let's say a particular segment that we've identified right we identify it this is very strategic this is something that we have to leverage our critical thinking skills to be able to determine the segment people in this segment our potential customers might all shop online that's important to us that's important for us that we've identified a segment that has that type of purchase behavior as you were suggesting that they all shop online why is that like why do we care like why are we why don't we just look at all like the entire market all men so say we're not we're all men we want to sell our product to all men why is that so crazy why does it matter that that they all have similar needs and wants or that they respond to the marketing mix in a similar way chances are from age 18 to 100 you're not going to have the same interests absolutely based on that you marked in a a Apple computer to a 98 year old he's not going to buy like how can you market to that I would think you're you're right I would yeah as much as we're all fond of Apple branded products yeah it's unlikely that we're going to close that deal yes go ahead John no pressure okay later hi now let's say I'll say what you said that quote they said last time class uh that we only char you we know it we're missing out we only get four nine percent of the market meaning that like we will move we want to target people that we know we're going to buy our products that's a one PS specific as possible sort of reach those people specifically yeah so we know that there might be some waste but we're trying to still be as efficient as possible and if we have segments where they have similar needs or wants and they respond to the marketing mix in a similar way and the segment is large and reachable well that makes marketing for us efficient now the thing is that we're still going to have multiple segments but we're going to have to customize our marketing mix from each of those segments and the more specific the better just like remember I said if we're selling a product and our target market is 18 to 25 year olds well you don't want me to be in a commercial because that's not going to be a selling point oh yeah I'm going to buy the product at coach buys like no you don't want to buy you'd like to think well you know the products that the professor use are not products that I would use because I'm young and cool and if and everybody likes me right so you want to have people in the commercial for example that the target audience can connect with that they could relate with does that make sense so we're going to identify multiple segments and then we're going to have to decide which segments we're going to focus on which is called targeting so after we segment the market after we divide the market into some markets then what we're going to do is focus on certain segments now why wouldn't we focus on all segments what would be – what would be the challenge yes go ahead absolutely so certain age groups the product is not relevant or certain let's say certain religions or certain ethnicities absolutely so really good point all right so let's keep moving forward you talked about geographic segmentation so that's dividing a market into sub markets based on a region for examples country city those are types of geographic segmentation we have to ask ourselves whether or not that's compelling or insightful enough because when we do that remember if we say for example if we segment the market geographically and we say region is one of the segments now suddenly North America is a large region in terms of the number of people that live there terms of the population right hundreds of millions and South America Latin America Europe etc etc what is the assumption that we're making with assuming the ad what what's the assumption if we if we take that approach that those regions that the people who live there all have similar needs and wants that that's a that's a pretty big assumption now in some cases maybe that's the case most of the time it's not so we need to customize our marketing mix and the same would apply by country but I think when you get out of a country level it's you might feel it's a little bit more we to generalize the country level the state for example Asia where countries comprise Asia so Japan China Russia Russia Korea in Central Asia is real-time yeah Beck Aslam Kazakhstan Tajikistan Minister so now he's now think about the countries that you just mentioned think about the cultural differences think about the cultural differences that we have here so we as an embryo as marketers we think of Asia as like you said China and Japan and we think of the people who live there as Asians but you know China and Japan they have a very interesting history that is very unpleasant so to say that their needs and wants are similar is also a very broad generalization Korea also a very different cultural dynamic now doesn't mean that Asian countries like Japan Korea and China don't have some similarities in cultural ways but there's also a lot of differences so as marketers we need to be sensitive to that you follow what I'm saying right so in terms of like this one size fits all to think that oh we're just going to sell this product to all Asian countries and we don't need to customize it in any way it's a very different countries very diverse and different from each other I take for example Japan has established a very significant presence in heavy manufacturing so for quite a long time for quite a long time Japan has developed an expertise in manufacturing items like cars for example right that's what we mean by heavy facture whereas China tried in the past to become a heavy manufacturer and they failed they are revisiting that again now so they are producing some cars but really they demonstrated an expertise in what we call light manufacturing which is generally what we purchase labor-intensive so a lot of cutting so operations which means making all sorts of apparel handbags things that require stitching right cutting materials and stitching them together and other labor intensive processes so very different countries and all aspects that's what I'm trying to show you here is that they're different in a lot of ways and that's why it's a it's quite a generalization to say that well they're part of the same segment part of the same geographic segmentation that we will just apply the same marketing mix to those three countries let's say not to excluding the others but let's say we're talking about Korea and Japan and China so you might want to go down to from the region to the country level to the city level now you add a level where I think you're more in a position to make some generalizations and you could say well people that live in a certain city whether it's Guangzhou or Shanghai or Beijing I think it would be more reasonable to draw some assumptions and make some generalizations about their lifestyle their needs and their wants I think it'd be more reasonable to say that there's similarities that we could identify what it could someone argue that maybe a product which didn't need to be more specialized we're broken down for different segments probably easier to sell to a large geographic setting maybe a better product sometimes for example iPhone maybe they market differently but it's the same iPhone all around but even different water companies have to use different styles different file types different artists see patterns on their bottles to sell into the region well that's all part of the marketing mix so if we're changing the product or the packaging or the amount of memory that's in the products or if it's 2 gigabytes versus 4 gigabytes or 6 gigabytes or 8 gigabytes then we're customizing the product and if we're for example selling in a market where the level of disposable income is lower and we're trying to sell products that provide the same functionality right that it might be a smartphone with some markets we sell smartphones for $600 and some 500 dollars in other markets maybe $100 but it has less storage capability maybe it doesn't have the camera functionality etc so once you start to change all those aspects you change the price you change the elements of the product then we're changing the marketing need that's marketing mix to meet the needs of that particular market so yeah I mean and that's ideal too that you've done that because more often than not the needs are not similar based on region ok so even those countries in the same region they're not going to have similar needs and wants even within a particular city there's some people that are very affluent that they might have they could afford to buy a model that's a ton but others maybe only $100 right but those are just some example in some cases it's relevant to segment the market geographically and can be very insightful and in other cases it's not going to be the key to us successfully marketing our product doesn't it also tie in to the concept of us those responsibilities I would like to think that all ties into social responsibility and ethics but tell me what you're thinking specifically because you're adjusting your productivity of consumers of financial needs yeah yeah yeah I see what you're saying in that case like if we stick with the smartphone if we believe that wireless communication is an inalienable right that we feel strongly that everybody needs to have wireless communication or everybody should have internet access or everybody should have we talked about access to prescription medication and so forth sure if that's some we might position it that way that would be an interesting way to approach the market it doesn't understand like social responsibility just seems like the company once made the most money they may give that as a product responsibility well I mean a company could sell a product at most of all price points you're right it doesn't mean that they are doing something socially responsible but I think what the way that you were suggesting it is that we would present the idea as that being our motivation not just that we want to sell wireless communication at $100 you're right you're right you could have a good better best pricing strategy which is very common and that doesn't mean that you're engaged in social responsibility but I think what he was suggesting is that couldn't we sort of spin that and say that the reason we're doing that is because we believe that everybody should have access to wireless communication I'm saying obviously that's a pretty far fish well I don't know is right now it sounds like a really – you look good absolutely right right I mean it's a way to somebody look you know it's the way that we're just sharing which is suggesting that that's our mo di i magnin could get someone listen it was for newly I have that feeling of social responsibility and I'm owner of the company Canada and market as though there's nothing and you have no marketing like that there's nothing what if I have such a big business I'm not losing anything point is that you can do yeah I mean companies do that now and what are some of the examples of where companies promote their activities as being something that's socially responsible like take for example Starbucks and you know this idea from companies supporting free trade and also they have on what's there they have a lot of water and so what they're just selling water but know that really what are they saying they say that they believe that everybody in the world should have access to fresh water because believe it or not this quite a few people around the world that don't have access to fresh water we take it for granted in the United States you go to the water fountain and so forth in our in our house or an apartment but that's not the case around the world but aren't they just they're just selling bottled water but they position it as no well this is where some of the reason we're selling water because we believe that everybody should have access to fresh water isn't that the way that they positioned or some companies say if you buy our product you know every product that we sell we donate $1 to a certain cause but aren't you really just selling laptops what is what does that have to do with every laptop you sell you donate $10 to breast cancer so what's the real reason that you're selling laptops to raise money for breast cancer or to sell laptops which is just saying right like you're selling laptops what would you know but are you kidding me why does that have to do why is that something socially responsible just because you decide you're going to get money to this worthwhile course does that mean it's something that's socially responsible I don't want to digress too much on that because wanting to talk about segmentation we could talk about that after class but you raise an interesting point we talk about demographic segmentation which we talk about examples of age we talk about gender race/ethnicity income level occupation level of education those are all good examples of demographic segmentation and the reason why it's so compelling the reason hardly even talk about that as an example is because in many cases it is insightful that people in a certain age group or in a snuggler or certain income level that they do have similar needs and wants that they do respond to the marketing mix in a similar way that these segments are large and reachable and by the way it doesn't mean everybody in that segment right don't get hung up on that well what do you know it doesn't have to be everybody just set a significant percentage of the segment is going to respond in a similar way to the marketing mix we talked about psychographics which has to do with lifestyles interests hobbies opinions attitudes that's what we mean when we talk about psychographics and we talked last time then we talked last time about different life stages how people in different life stages have similar needs and wants and respond in a similar way to the marketing mix so for example if you're single if you're married if you're married with kids if you're an empty nester so it's plausible we have to decide what's going to be most relevant for our particular product or service but certainly you can see how that's insightful right is that plausible we think well yeah people that are married and have kids they Colin do they have some commonality that seems plausible but again depends on our product or service and then where we left off really was we started to talk about behavioral segmentation and we started to talk about usage rate so an example of behavioral segmentation is usage rate so how much of the product do we consume so for example always light users so do we use the product infrequently are we moderate users of the product or heavy users why is that insightful why do you think that heavy users might have something in common and have similar needs and wants and the same being true of the other segments because what we're doing is we're aggregating potential customers were existing customers into these groups and we're saying we know that there's customers that don't use our product frequently like let's say it's peanut butter and there's some that while they only buy pea butter once a month there's some that buy peanut butter once a week those would be the moderate users and then some that are heavy users that buy peanut butter not once a week but three times a week so how is that insightful to us why would why do we care whether it's peanut butter or milk so somebody buys they were like user they buy one gallon of milk a day of a month moderate users they buy one gallon of milk a week and heavy users they buy a gallon of milk every other day how does that help us tell us buddy what do you think about that we would spend more more our marketing budget on the heavy users equals languages to advertise to heavy users we might do that why did we do that though oh my method we need to spend money no no I'm not disagreeing with you I just want to let the chok chok just talk it through why um tell a shepherdess I agree you should spend money I'm habit I do too heavy users what is this entity of doing that what's the benefit of advertising to Navi users yeah absolutely so don't make the mistake you know you raise a really good point um you keep religion that means we've developed they're apparently they're heavy users of the product we need to sustain that we need to make sure that they don't have what's called buyer's remorse so if they're heavy users we don't want them to experience buyer's remorse on what sometimes it's called hosts cognitive dissonance which means that after they buy the product that they're double guessing themselves we need to manage that part of the process so absolutely we need to reinforce yes you've made the right decision you bought milk instead of orange juice right so you need to continue to reach out to them and get them ideally to through a different variety of different approaches certainly advertising is one of them to get them to continue to buy no so excellent so what about the others so we're going to spend some money to advertise to those that are already heavy users if I go over time well not only attention with the president modify it's actually foremost for all categories like frozen peanut butter mixed with general like milk all cataluña zero fat low fat because longtime users they can get bored or like there can be health whatever like things that may prevent people from music so we'll make like low fat meal or whatever and for those who are not so to get them to be more heavy we can like in different varieties and little more love them yes so we could augment the product as you're suggesting and also add different features and labels we need to yeah absolutely different flavors because the light users the thing about the light users is that we need to understand why is their consumption of milk so low now see these are the things that you do research you need to probe and keep asking and questioning to try and understand the purchase motivation or maybe the lack of purchase motivation so we need to continue to ask the right questions and I think you raise a good point I'll actually raise a good point that maybe the reason they're light users of milk is because they perceive milk as being high in fat or cholesterol so if we come out with another version that would mark it as low fat or more healthy calcium then we're going to be able to attract those non-users so we you know the different prospective buying groups we have users we have non users for example so you're right there's some non users or some light users because we need to address that we need to find out why it is that they're a light user the same thing with with orange juice the other side of it is that well they say why don't you drink orange juice well because I my doctor said I really need to get a lot of counseling than my diet and I need to you know vitamin A and D is important to me so that's gonna address that issue we have to overcome those issues and concerns and those reasons that people aren't buying or using our product so this is definitely very insightful and also to your point we're going to certainly spend money on heavy users because we need to keep them as our customers but at the same time they're already heavy users so well it's easier to retain the customers that we have than it is to attract new customers with easier meaning that we have to spend less effort for them right so even more so that we should do that because these people have already used our product and liked it they've already seen our print ads they've already seen our commercials so we need to stay top of mind we just need to reinforce that so our advertising objective is to build and grow the level of awareness whether it's the brand awareness or continue to support and enhance Category need of what sometimes we call primary demand that's what they got no campaign is all about is to create primary demand for not a specific brand but for a particular product type which in this case is milk well the same is true for beef it's what's for dinner right all those are campaigns that are designed to create category need the let users know what your the depositary network domain disulfide users so would be the point there but we don't know we don't know the reason maybe it is a lack of awareness maybe they don't know the features and benefits maybe the reason they don't drink orange juice is because they don't know that orange juice is high in calcium and vitamin A and D so that's what we need to understand in some cases the light users that's their situation in other cases they don't because maybe the orange juice is too acidic and it's beaks have it on their stomach we don't know what the reason is maybe it's too expensive you know so that case advertise anyone only right at home if it's too expensive acidic only to change right it could change your product and we could use advertising to communicate to them that orange juice is high in calcium where I am juice is high in vitamin A and D so get the light users to become moderate users or heavy users so this is very insightful once you understand that there's some commonality amongst each of these individual segments that they have similar needs and wants but each case is going to be different we need to understand why they're light juicers why are they not purchasing milk or orange juice or peanut butter just we're going to have good focusing on me heavy users on the waitress but what about the moderate because if you want to try to get them yeah absolutely what we want to do is for all of these is increase the usage rate that's our objective is to increase to use a drink so either if they were already heavy users they buy milk twice a week why can't we get how do we get them to buy nope three times a week how do we get them to find out four times a week or if they just don't need it they might not but what we need to challenge ourselves to find out how do we increase usage how do we increase consumption all of our product or service we don't want to spend the most money possible in the light come on in your slogan or some beauties well it depends like you're suggesting it really depends on the reason why they're not purchasing like you suggested well if it's really that the juice is not in agreement with their stomach lining then matter how much have it ties it's just not going to drink it like who's going to drink that if it's going to you know give you pains in your stomach but you need to understand now in some cases that might be maybe only 10% of the light users maybe the others um there's other issues is other reasons maybe a substitute product is less expensive so why couldn't we have if we are marketers of orange juice why can't we have a good better best pricing strategy where we have a premium brand of orange juice and then we have a less expensive brand or an economy brand that light users will find affordable so it's interesting isn't it to see that there is a different level of consumption by different customers and importantly the key takeaway is that after identifying this and understanding it is that as marketers we can influence this certainly that's what we're going to try to do like you guys are pointing out is that yes they are like juicers how do we get them to become moderate users and the moderate users what is it we need to understand why they're modern uses and not have the users how do we increase their consumption and usage of our product wouldn't it be another category called numb users like yes well yet light or non users yeah okay like people group doesn't consent at all absolutely so a non user would definitely be one of the prospective buying groups absolutely so these are actually the way we're looking at it here as if we go up to this level we're looking at users which is what you're saying and then the other group is non users which is a good point so within users we have light moderate and heavy and then we have another segment which is the non users yes absolutely and with the non users also we need to ask that question why you really need to know why and sometimes very often not just sometimes you'll be surprised what consumers will tell you in research because it's not what we think or what we use or what link we like or don't like it only matters what the customer thinks what they like and what they would purchase or what they wouldn't purchase you just said it only matters what the customer thinks I'm just wondering today do you ever try to change the customers opinion would you chose you would you rather tailor to what they want to hear well once they once we know what their opinion is that we could try to modify their behavior but we need to understand what their perspective is and some in some cases it's something that we're not able to change about our offering and in other cases we have a solution we have something that will address their concern that's not always the case maybe maybe there's concern is not it's something that we could resolve here to check how much of an effect that this one this group of non users will to all have on your cup organization if you have eat like you 2,000 people who don't use it another 8,000 people who use it even at a light and like moderation yes and and it's not worth even touching their interest right so the next step once we send at the market is we need to quantify the size of the marketing of the water times what you're suggesting is we need to do market sizing so we need to know is this five percent forty percent and fifty five percent that's going to impact our decision now if Mike uses was fifty five percent then we might start to really think like alright well 55 percent of my light uses it then use the product but we just need to increase the usage rate it might make sense that's a very large segment that we would want to try and accelerate the rate of adoption of our product or service but five percent they're like users depends on the how many people that actually is five percent doesn't sound like a lot but five percent of the population in China is pretty significant because there's 1 billion three hundred million people there so five percent is what 65 million people well yeah I wouldn't be so quick to turn a blind eye at 65 million people but maybe we need to do some research and understand better their requirements so another type of segmentation that I want to talk about is benefit product benefit and a good example when we talk about the benefits sort is if we look at toothpaste so we have a toothpaste category and there's different segments now what we're going to do is by segmenting the market by benefit sort so we're grouping together customers that want cavity protection white teeth fresh breath plaque control tartar control so this is a good example of how you can segment the market based on the benefit that sort do you think this is insightful so do you think so in other words take these given segments do they have similar needs and wants David no you don't think so this is what they've done this is what Crest and Colgate has done is they segmented the market this way because they believe that the people who want a toothpaste it's going to whiten it teeth right that's a similar need in wine that segment is significant enough that they develop a specific product type that focuses on delivering that key benefit while others in their product line we're going to talk a little bit about the difference between a product line and a product mix and items in a product line others um in their offering focus on delivering these other key benefits now many cavity prevention is something that transcend all those benefits because even if it's not something that they're focusing on you would like to think that isn't that really ultimately that's so I guess maybe the minimum requirement is that it will prevent cavities but when you see the commercials when you see the product on the shelf they emphasize different benefits some of them they talk about in the packaging and the packaging is the silent salesperson at the point of purchase they focus on and include on the packaging the fact that this product will prevent cavities others promises fresh breath lightening cetera yeah just a question do you think that it's a bad strategy to try to uh say like we're going to go all one so like it Kress mega toothpaste they say well this applies to Google all in 105 days tartar control of this this at all things usual which says – sure – then you don't hit the crux of the market reforms of your target yeah I know they are bad they have my Colgate Total and it definitely is not in line with this model I'm saying if that's a bad strategy because then for cavity protection want to see the big letters on the thinset cavity protection I want to see cavitation white fresh breath all these things they're just really looking for that one thing yeah I agree I I think it does undermined what we're talking about is it bad I mean I think that you know a strategy could evolve and maybe you know they research suggested that these individual segments have more in common amongst them selves than independently so maybe ultimately they after segmenting the market this way that they ultimately said you know what maybe it's six of one half a dozen of the other maybe the customer now has come to expect all five of these benefits in one product because there is definitely groups of consumers who want multi functionality in everything just like we have phones that you could send text messages access the internet take pictures and yeah I think it doesn't support this approach is it bad it's hard to say without knowing the research I think that this is very compelling and then yeah you kind of scratch ahead and try to understand like why would think why would they do that like you because they still sell ones that promise white teeth freshening your breath and so for that I have one that does it all what make there is a segment maybe that's the other segment that we don't have here is the one that the segment of consumers that want all a little bit yeah so maybe that's their rationale is they said yet it's definitely a large segment a large group of consumers who want this benefit whitening and these others and then there's some that want all of them so we'd have to know you know what size or what percentage of the category that represents or and the size of each segment so maybe this is 10% I mean this still might be 35% but maybe this segment they feel is large enough that yeah there should be a product that is all-encompassing that has multiple benefits even though I think this is definitely more compelling because well based on this category what we know about the benefits that are sort in other categories it's less relevant but certainly this example is very compelling and all you need to do is you should go into the store and look at the show for two phase then you can see um where this segmentation comes to life when you spread yourself out maybe in this case a little too thin you came to be able to do everything don't you run the risk of losing the credibility of our customers so we should limit the offering to so like Henry Ford says any Model T Ford you want as long as it's black so operationally from that's brilliant but it ignores the needs and wants of the customers which is that people don't just want Model T or they don't just need Model T they want models a B C and D because let's say for example they have a large family so they need a bigger car and not everybody likes a particular color some people like black some people like blue some people like green some people want yellow cars some people want orange cars that's fine but maybe you know like keeping them separate you're claiming one thing and therefore the customer will be able to bye-bye to that and believe that when you think you do everything then it's it's difficult sometimes for the customer to take the product series oh so you're saying like this idea of like Colgate Total you're saying you're agreeing but have you like this is like really probably not such a good idea right yeah oh yeah absolutely there might be a credibility it might be initial people may not believe it there may be some skepticism yeah absolutely I could agree that with that I think you're right that there could be like the product is too multifunctional and has too many promises like it does this there's this and this and you're like really like yeah sure yeah maybe raise a good point definitely that could be a problem on this product benefit segmentation usually to the development of like new products like the benefit of like having raw fat control they make like black strips for example this is everyone's yeah absolutely um one of the things that we try to to do in the research it's like we said is to identify the unmet need and the needs and wants and so sure this is something that we're going to look at in research and that's what's going to fuel product development so once we find this out in research once we find out they say you know if I was going to develop a toothpaste I would develop one that could Whitely teeth that's think that's important to me that would be an important benefit then it's up to the marketing team and technicians and scientists to see can we come up with a formulation that would actually bite me team can we come up with a formula that would actually reduce the level of tartar or plaque so absolutely we do that in research we're trying to find out what are some products that we could produce that are going to meet those needs yeah very good point all right very important if we Newton we could talk about this again and it will come up again very important to understand segmentation and the significance of segmentation and the criteria and also we talked about after we segment the market importantly what we're going to need to do is then quantify the size of the market could be a percentage it could be in dollar terms it could be in units it could be in dollars the number of people to try and understand how large the segment is as we said one of the criteria is that it's large so first we're going to segment the markets then we have to determine both how much are they is it 50% or is it 5% is it 1 billion people or is it 300 million people or is it 80 million people is it a market that sells 200 billion dollars a year or is it 200 million dollars a year so they sell 50 million units whether they sell 50 thousand units of that particular item in a given year for example that's called market sizing so there's different ways that we could quantify the size of the market but certainly it's important because we said certainly we want the segment generally we want the segment to be large so the question is how large so that's market sizing and then once we size the market then we have to select markets that we're going to penetrate and we said well we're not going to you know statistically it's going to be very problematic to try and penetrate all the segments so for example if we're in apparel manufacturer if we may close that we start this company and we decide that we're going to penetrate all segments so we're going to one segment would be jeans so we're going to sell jeans and we're going to sell sweaters and we're going to sell t-shirts and we're going to sell polo shirts how because like you said in terms of new product development how big is our team I know how you know our designers I mean how could they possibly design all those different product types and be able to launch them simultaneously it's going to be very challenging it doesn't mean that we don't have a five-year ten-year 15 year plan where we're saying we're going to introduce jeans first and then we're going to then develop other items uh you know other clothing or apparel so size is something that we're going to consider but then what was some of the other criteria that we said that when we're selecting remember so we're segmenting what to find selecting and positioning so we divide the market into sub markets we quantify those markets right we determine the size and then once we determine the size then we're going to select but besides size what else did we say we said the size of the market was important but what else when we're selecting no we always said that's the criterion forming the segments but in terms of selection 31 selecting the particular segment that we're going to penetrate so we have all those different segments white teeth tartar control blue plaque we're going to pick not all of them we're going to pick some of them or if it's countries we're not going to say well we're going to penetrate 100 countries well we got us decide we're going to focus on Italy France Germany just for example but so how do we decide one of the criteria we said was the size of the market what else growth rate remember we said the growth rate of that particular market is an important criterion selective how do we decide which to select we're going to look at size we're going to look at the growth rate we're going to look at the overall market attractiveness of the particular segment those are things that we're going to use to decide which segments to select how much is it going to cost to penetrate that particular segment the level of concentration remember we talked about whether the market is highly concentrated or highly fragmented and I share with you Porter's five forces model which is a model we could use for determining market attractiveness which includes the threat of new which means how likely is it that competition will enter the marketplace in some cases the barriers to entry are very high and it's unlikely that when we enter the market and other competitors would follow behind us you see why that could be problematic is that we enter the market and then ten other competitors come behind us then the market dynamic has changed very dramatically and our ability to be profitable has also changed very dramatically the threat of substitutes that other products could substitute for ours they provide the same functionality supply power by a power all of those are important and the level of rivalry amongst competitors so all of those are things that we look at to determine the level of market attractiveness yeah questions are hard like selectively all interconnected because like if you have like I look great the link then there's obviously a lot of like market attractiveness oh yeah ultimately one way when we're selecting a segment multiple segments of penetrate we're trying to evaluate market attractiveness so all of those are components of market attractiveness the size of the market the growth rate the level of rivalry the threat of new entrants the threat of substitute buyer power supplier power all of those things we look at all those metrics we look at those to try and determine how attractive the market is so is it better that we should launch our product in France or Germany or China or Israel or Iraq that's what we're trying to decide and that ultimately how are we going to position our product and brand in the marketplace remember I said positioning is the space that we occupy in the customers mind and we're going to talk about that down the road and specifically we're going to look at a perceptual map and the perceptual map is a graphic visualization of our positioning importantly our positioning relative to our competitors and you're going to do um when you're doing this type of work you're going to do 10 or 12 perceptual Maps that's generally what we do and the reason we do that is because each perceptual map is going to look at different dimensions so I'll just give you a preview of this when we look at our perceptual map how we're positioned relative to the competition so here we might have low price high price low quality high quality so is there a market for products that are of a low quality or lesser quality yeah absolutely so we shouldn't shy away from that and think about importantly where our brand is position relative to other competitors so let's take cars for example let's take cars what um where would you say where would be position for now your guys got to be this this um this map right so this is low price high price low quality high quality so where is Ford is Ford low price or high price or somewhere in between your in between in between so we're here here they're right here okay what about quality are they up here yeah down down down under yeah yeah so let's we'll put 40 here much less now importantly the fact that you guys don't agree is is important because that's what we want to understand to our research is what is your perception of our brand relative to our competitors everybody's not going to agree then we could synthesize all that information and determine how the target market or a certain group of customers perceive our brand is being positioned in the market and what's so helpful is relative to the competitors because the next thing we want to look at is let's say Mercedes so where is Mercedes in terms of price highest ever decide percent opposed yeah all right there's no genius what about Dom Toyota right above us for no price quality little less guys getting behind a little higher concentrations repair so do you start to see how this is helpful so not just where their position but it's important to know that we occupy here and our competitors are here and we want to know who's in our competitive set so who are our number direct and indirect competitors this is going to tell us what Toyota Honda right that these are in the same competitive set we could argue that their direct competitors and that Mercedes is an indirect competitor since Mercedes also provides luxury luxury add a means of transportation so they're competing against each other but in different segments different price points of a Jaguar with fans awesome yeah we could with Jaguar there yeah BMW yeah so now strategically if we're going to do like you said motion right if we're going to develop new products we have to decide where we're going to be position now maybe we want to go here maybe we're going to decide we're going to try and position ourselves here or maybe here but then maybe over here so you know what that means that we're going to be competing against Jaguar Mercedes Benz and BMW maybe we can't get there from here so to speak right maybe that's not attractive that competitive set so we need to decide where we're going to be positioned all right so we have a few minutes left let's talk about I want to start our discussion about products questions I'll be good I'll be great yeah all right let's rock yeah all right let's keep rolling got a couple minutes let's see where we could cover here all right there's different types of products and in this category and you'll see this in Chapter ten when we talk product is a general term use that term very loosely there's goods and services so when we use the term product and I know I realize that this might be a little bit different from the way that you're used to using the term but in marketing we use a term product and that's why I always try to make a distinction I always try to catch myself from using the word consumer right I always try to say customer who's customers are more general term as opposed to same consumer because consumer implies yeah I mean also but I mean implies us us as shoppers and what I'm trying to say justice that doesn't need to be us as shoppers but it could be before the business right so product is a general term refers to goods and services and when we talk about different types of goods we have durable and non durable I'm sorry I know that for marketers would expect something more creative but that's the trigger terminology durable and non durable and often the word non durable is replaced with the word consumable so those words are used interchangeable alright so what's the difference between durable and non durable go Katella into regular well let's keep going whether whether it stands up in the market type of thing where how long yeah how long it will last you Marcus like isn't going to fail after one season or there we go also the prompt itself how many times are you have to use it over and over again you can have to buy it more yes right exactly tell us say a lot that's right if it's if it's one of the other so if you're going to have to pull Bonnie constantly like you have to renew your purchase those are jobs in danger like leather jacket will last a long time whereas if you get a poncho if I won you have to keep getting new ones and they're not the same thing right right so a durable product a durable good is one that's reusable and we could use it many times it doesn't mean that it has an infinite life but we could use it again and again like like you're saying a leather jacket we could use it again and again but non durable or which very often referred to is like it's Super Bowl is that it has a limited number of uses right like juice right like orange juice like you buy a half a gallon of orange juice its consumable you're able to get ten glasses out of it and then that's it so orange juice toothpaste milk all those are considered to be consumable products yes bad would like the warranty beats oh I'm thinking weights like these like yeah really would that be considered durable too – like if they break you can always buy the fact that it's that you could use it again that it's not consumed that you could use the product and it doesn't get used up it could wear out sure any durable product could wear out your leather jacket could wear out your car could wear out but in terms are the definition of durable means that it's um there's numerous uses right that you could use it multiple times disposable camera versus right like disposable it for it's a good example right so if you want to say that it's disposable you might say that synonymous with consumable so it's important for us to understand that because that's going to change our marketing plan if our product is turbo versus consumable so consumable means like we said people are going to buy our product every week that's very different from saying people are going to buy our product every decade right so how often do people buy a car for example that's very different from saying somebody's in the store every week and they're buying Tropicana versus I buy a car every 10 years you see how that's going to really shape and define our marketing plan and there are some things that are sort of you know in between maybe a computer like you know five years you couldn't have six years so that's not really consumable but that's not you know also do that their holes like sort of permanent but when we say yeah you could you can make that distinction if you want to make a distinction between a product like a car versus a computer right I think we're just saying I think you're trying to get at the lifespan of the product which is that some cases it could be twenty years right even cars with high mileage right and have probably still could stay around for 20 years right 25 years but not so much the case who had laptops that usually they just sort of stopped working and that's like sort of beyond our control no matter how many times you change the oil or rotate the tires or what I write that it's just has its like built-in obsolescence so yeah that's fine then we make that distinction that there's different levels of durability that's certainly helpful to us to understand that you know that because a product is durable doesn't necessarily mean that it's rugged you see the difference there that it's turbo means that we could use it multiple times we could use it over and over again but doesn't mean if you drop it that it will break so we need to get comfortable with the whispers with the terminology and the implications but I think what you were getting at is that right like you're thinking about oh yeah the car is there is a big gray area yeah so I think we should make that distinction between the durability of a product versus whether or not a product is considered to be durable versus consumable that's what questions and that's also why Happel always constantly updates our services and their products being I propose the same iPod ten years ago and it is today and notify yet like that's what makes people interested in a product that has a different feature two types of drags people involves

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