Research is the basic tool of marketing. A market must determine what customer needs are. Marketing experts have developed techniques for determining the needs of prospective customers. It’s done by way of market segmentation.
How can market segmentation be of help to a manager who wants to develop a new product? Every market can be devided into segments or, in other words, into separate groups of consumers. First there are demographic factors like age, income, educational background, occupation, size of family, type of home and neighborhood, etc. Then there are psychographic factors – the customers’ opinions and interests, hobbies, vacation spots, favorite sports etc.
Then a product is compared with the goods already established in the market by quality and quantity standards. To be a success you must be ahead of your competitors.
Competition never stops. That is why market segmentation must never stop as well. It should be on a permanent basis. Introduction of a pioneer product can immediately change the composition and number of a consumer grouping.
Now in Russia competition is becoming an important incentive. Innovating more effectively at home means finding more to export abroad, more to sell to the West, more hard currency to earn, more jobs to create, a more powerful industrial complex to build.
The fundamental principles for a market are:
1. understand the customer (through research).
2. understand the grouping (to which the customer or his business belongs)
3. Create a choice (a difference in price, concept or value that will distinguish your product.)
4. communicate that choice (through promotion and advertising)
Consumer marketing should be based on understanding consumer values, wants and needs.
THE FOUR P’S
There are four principal controllable factors that provide the most effective choice for the consumer – the Four P’s: product, price, place and promotion. The owner of a factory manufacturing transportation equipment could produce an economy car, a luxury car, truck, van, tractor, motorcycles and apply different marketing techniques.
Place includes location of production and distribution. The place to see your product could be in dealers’ showrooms or directly from the factory or from catalogs, direct-mail coupons, even telemarketing with telephone sales people or through computer shopping services.
Promotion includes all forms of marketing communication (advertising, direct mail, customer service, image, special events, sales and the product or service itself). Promotion is the most complex thing—how to select and devide your market according to the type of product, its price and where it will be available.
The most controllable of these factors is the first “p” –product (service).
All products and services have what have been traditionally called “product life cycles”.
The stages of the product life cycle are: introduction, growth, maturity and decline.
The length of a product life cycle depends upon :
- the intensity of the competition,
- the extent to which the new product is an innovation, a modification of an existing product,
- introductory timing of technologically superior products,
- marketing techniques.
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