Marketing Concepts Terminology - Segmentation - Targeting & Positioning

Questions: 1: Understand marketing terminology and marketing concepts and appreciate the practices, principles, problems and problem solving approaches in marketing and marketing management including the ethical and social responsibility dimensions in marketing. 2: Understand the relationships between the elements of the marketing mix in different business and environmental contexts including consumer buyer behaviour. 3: Demonstrate skills in evaluating marketing problems, concepts and opportunities, and strategy and proposing solutions to marketing tasks. Answers: Introduction The study focuses on studying the buying process and STP of the company. The company chosen is Honda and STP is done for its two product categories. Honda has several manufacturing factories which deal with various car assembly operations. Products that we have considered in Cars category: Honda Jazz Honda CR-V (Honda Team, 2016) Consumer Buying Process The consumer has to undergo a buying decision process while buying a product. It undergoes a thorough cost-benefit analysis. The consumer buying process involves six steps which a marketer uses to their advantage. The six steps are explained as under: Problem Recognition The customer before purchasing any product has a reason to buy what they want. The desire of the customer at times is different what from the actual reality is, this constitutes the problem for a consumer In our case, the buyer will first identify his need requirement. The customer of Honda Jazz segment has a need to buy a car which is economical and the customer of the CR-Vs main requirement or focus is to buy a car with more features. (Jones, 2014) Information Search After the recognition of the problem the next step is to search for the solution, i.e. digging out the information available on the product of their choice. Evaluation of Alternatives Once the customer gathers all the information, the next step is comparing all the options available at hand to make sure that the decision taken is accurate. Customer of today does thorough research while buying products. The customer who will buy any car will research about its competitors. He will discuss with the present customers before making a buying decision. For example, a customer can also think of buying a FORD car in the similar segment instead of a HONDA car. Purchase Decision The purchase decision is not the final step, but is the mid step in the buying process. During this step, the consumer has many options in hand and has done the market survey of the pricing. The consumer at this point decides and considers should the purchase decision be taken or not. Purchase At this stage, the need of the product is there and complete research of the same is done. The decision of the customer to purchase a product is also made. All the steps taken to purchase a product are taken, but still the surety to buy a product is yet not confirmed. The customer can still change his mind to buy or not buy a particular product. Marketing of the product needs to be done equally at this stage also. Post-Purchase Evaluation The process does not end when the product is purchased. The customer loyalty is an important factor every marketer desires for. After the purchase, the consumer weighs the satisfaction he has of the decision taken. They evaluate their decision of purchasing the product. Segmentation, Targeting Positioning STP is an important and most common model applied by Marketers today. It is applied while preparing communication strategies. It aids in prioritizing the marketing scheme and developing and conveying tailor made and pertinent communication to connect with diverse audiences. STP is an audience centric approach and not product centric approach because of which pertinent messages are delivered to commercially engaging customers. (Perner, 2010) Below mentioned is the diagram that explains the concept. Segmentation Segmentation is exploring the needs of the different customers. For example, in the automobile sector some customers main requirements are speed and performance and some others look for space and safety. Segmentation is done while considering the following factors: 1. Demographics It combines any of the factors like Age Gender Income Education Ethnicity Marital status Education Profession An example to explain demographics is of the company Firefox selling the coolest things whose target is a young male category of customers. Another example is about Moshi Monsters which target parent looking for enjoyable, secure and learning space for their children 2. Psycho-graphics It involves qualities and feelings which are associated with behavior and are related to purchase choices which includes outlook, way of life, pastime, risk aversion, individuality and leadership traits. An example of this can be, is Virgin Holidays where segmentation of holidays is done in 6 groups. 3. Lifestyle This refers to leisure pursuit, fun pursuits, activity, holiday, and other non-work instance quest. Companies like on and off-line magazine targets customers with precise hobbies. 5. Life Stages Life Stages is the sequence and ideal stagesof audiences life at different phases. For example Saga holidays target is people above the age of 50. 6. Geography It is the breakdown of the audiences by nation, state, area, city, populace concentration and type of weather. 7. Behavior Behavior is associated with the characteristic of the purchase, brand name and its trustworthiness, its usage, benefits required, delivery channels utilized, response to marketing strategies In some cases, for example the benefits required are the urgency of a product, i.e. when and how early, the product can be delivered. This segment is known as planned in advance segment, as it involves the final minute segment. Example for this factor is Parcelmonkey.co.uk, the company provides on the same day or the following day. 8. Benefit It is the utilization and contentment that are achieved by the customer. For example, SmythsonStationary provides alike commodities to the stationary companies, still their consumers required the signature packing tissue-lined Nile blue boxes which tied with blue color ribbon. Market targeting The inventory stated below, refers to the requirement to appraise the probable and profitable attractiveness of all segments. Criterion Size:The market has to be big so that the segmentation is justified, in case the market is small the segmentation will be smaller Difference:There has to be huge differences in the segments. Money:predictable income should surpass the expenses of extra advertising tactics and other plans. Reachable:Every segment should be reachable and the segment should get all the marketing messages. (Hanlon, 2013) Positioning The Positioningmeans putting into practicewhat is targeted. This is the final step where the task is to recognize how to position the product to reach the targeted audience. After this the marketing mix will be selected as per the customer segment. In order to position the product in the best way it is important to reflect the reason why customers would purchase our product and not of the competitors. This can be done by recognizing the unique selling proposition. Segmentation of UK Economy Age structure 0-15 years:17.3% (male 5, 660, 8910/female 5,380,449) 15-25 years:12.6% (male 4,116,858/female 3,945,148) 25-55 years:41% (male 13,299,733/female 12,843,938) 55-65 years:11.5% (male 3,621,117/female 3,702,718) 65 years and over:17.5% (male 4,990,027/female 6,182,115) (2014 est.) Income of UK The income of the people of the UK is explained below: The earnings of the mean household are26,000 per annum. The average net household income is 38,547. Median hourly earnings for men is 12.50, and 10.91 for women. (2008) In 2010, the median wage in the UK for all jobs was20,801 (Business studies Team, 2014) (Gallina, 2013) Major cities population LONDON (capital) 9.005 million; Birmingham 2.272 million; Manchester 2.213 million; West Yorkshire 1.625 million; Glasgow 1.137 million; Newcastle upon Tyne 874,000 (2011) (Fairtrade Team, 2015) Lifestyle in UK: Work is five days a week and Saturdays are devoted to shopping. The marriage rate is at its lowest On weekends people like to enjoy in pubs and bars, it is also a well enjoyed option with foreign students. (English UK Limited, 2016) There is a multicultural society and the people are very welcoming to the visitors. STP Model of Honda Jazz Segmentation Segmentation of Honda Jazz has been done on the basis of Age criteria, Population of major cities, Income and the lifestyle of people. Targeting Honda Jazz targets the age group of - 25-54 years, the group comprises about 42% (male 13,299,735/female 12,843,937) The product caters to big Cities like London, Manchester, Birmingham which is thickly populated. (HONDA UK Team, 2016) Honda Jazz targets of the Income Group of people with less than 30,000 as this category demands following things which are present in Honda Jazz Reliability Reliability is a real strong point of the Honda Jazz. It has time and again done well in client contentment surveys. It has also performed well in Warranty Directs reliability index. Fuel Economy Fuel economy is 56.5mpg as per official EU fuel tests. These results are in combination with a manual gearbox. - Affordability Honda as a company never provides big discounts, but our product the Jazz is priced in per their competitors such as the Citroen C3 Picasso and Nissan Note. The finance rates for the product are very competitive. People in UK socialize and mingle with their family and friends therefore they need a family car. Honda Jazz has a good seating capacity for four big adults. It can accommodate 5 adults as well. The car has large doors and seats are very comfortable and positioned well. The product is economical for women who work, it is also easy to drive. (Darmadi, 2014) Positioning In order to position Honda Jazz in the minds of the audience the company has planned an advertisement for the launch of the new Jazz The advertisement has the idea of the customer looking for the whole lot in the creation, or a 'fully-loaded' creation. The advertisement focuses on all individual professionals like a musician, athlete, a cook, writer all who desire everything. At the end of the advertisement there is a voice which says, for everyone who desire everything, the all new Honda Jazz is coming. It doesnt have a single thing, but everything. STP Model of Honda CR-V Segmentation has been done on the basis of Age criteria, Population of major cities, Income and the lifestyle of people. The segment of this product is upper class. This class is defined both by their education and hobbies Targeting Honda CR-V focuses on age criteria - 25-54 years, which consists of 41% (male 13,299,731/female 12,843,937) Cities like London, Manchester, Birmingham which is densely populated Honda CR-V targets of Income Group above 30,000 as this category demands following things which are present in Honda CR-V: More Spacious Honda CR-V is a spacious family car. Three people can manage to sit comfortably, with adequate luggage space. This is fully family sized car with fordable seats comfortable for children. More Safety Upper Class likes more safety and are willing to pay for the same. Honda CR-V comes with more safety features airbags, and systems to prevent wheel roll and skidding on the greasy surfaces. The CR-V was presented five stars out of five by crash test organization Euro NCAP. More Features Upper Class desires for extra features like satellite-navigation and a Bluetooth hands-free link, leather trim, electric seat adjustment, a digital radio, keyless entry and start, comfortable journey control on high speed. (KRISTIANTIE, 2010) Positioning The tag line Advanced Slick Stylish signifies itself as to send the message to its target audience who are high income class group and pay more for features and style. Keep on going The road to better never ends, an advertisement campaign describes that the car is more efficient and comfortable during long journeys. Conclusion The concept of buying process and STP of Honda Jazz and Honda CRV is discussed. The buying process involves Problem recognition, Information Search, Evaluation of Research, Purchase decision, Purchase and post purchase evaluation. The Segmentation of Honda Jazz has been done on the basis of Age criteria, Population of major cities, Income and the lifestyle of people. Honda Jazz targets of the Income Group of people with less than 30,000. In order to position Honda Jazz in the minds of the audience the company has planned an advertisement for the launch of the new Jazz. The segment of this Honda CRV is upper class. Honda CR-V targets of Income Group above 30,000. The tag line Advanced Slick Stylish signifies to send the message to its target audience who are high income class group and pay more for features and style. Bibliography Business studies Team, 2014. Market Segmentation. [Online] Available at: https://www.businessstudiesonline.co.uk/AsA2BusinessStudies/TheoryNotes/2874/PDF%20Non%20Print/02%20Market%20Planning.pdf?bcsi_scan_8d5e706812dbbfea=0bcsi_scan_filename=02%20Market%20Planning.pdf Darmadi, E., 2014. Honda Marketing. [Online] Available at: https://www.slideshare.net/limeka/honda-group-assignment English UK Limited, 2016. Life in the UK. 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Segmentation, Targeting, and Positioning. Segmentation, Targeting, and Positioning.