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33 Marketing Notes
33 Marketing Notes
33 Marketing Notes
Marketers use VALS to understand why consumers make the choices they do. The more
marketers know about the target, the better they can design messages that resonate with
the target. By using VALS to understand the motivations that stimulate consumer behavior
(such as buying a product or participating in a loyalty program), marketers increase their
chance of cutting through today's advertising clutter. VALS - short for values and
lifestyles - is a way of viewing people on the basis of their attitudes, needs, wants, beliefs,
and demographics.
Descriptions of the VALS types:
Innovators
Thinkers
Achievers
Experiencers
Believers
Strivers
Makers
Survivors
VALS™ is a marketing and consulting tool that helps businesses worldwide develop and
execute more effective strategies. The system identifies current and future opportunities
by segmenting the consumer marketplace on the basis of the personality traits that drive
consumer behavior. VALS applies in all phases of the marketing process, from new-
product development and entry-stage targeting to communications strategy and
advertising.The basic tenet of VALS is that people express their personalities through
their behaviors. VALS specifically defines consumer segments on the basis of those
personality traits that affect behavior in the marketplace. Rather than looking at what
people do and segregating people with like activities, VALS uses psychology to segment
people according to their distinct personality traits. The personality traits are the
motivation—the cause. Buying behavior becomes the effect—the observable, external
behavior prompted by an internal driver. VALS reflects a real-world pattern that explains
the relationship between personality traits and consumer behavior. VALS uses
psychology to analyze the dynamics underlying consumer preferences and choices. VALS
not only distinguishes differences in motivation, it also captures the psychological and
material constraints on consumer behavior.VALS is based on current personality research
into specific components of social behavior. VALS asserts that people express their
personalities through their behaviors. People with different personalities engage in
different behaviors or exhibit similar behaviors for different reasons.
APPLICATIONS: COMMERCIALISATION: VALS™ facilitates successful product launches
and helps avoid costly mistakes. Understanding the needs of different consumer groups
guides new product and services development.
POSITIONING: VALS identifies which market opportunities are strongest. Relating features
and benefits to distinct segment needs clarifies strategies for targeting and expansion.
COMMUNICATIONS:
VALS shows you how to craft more effective messaging campaigns. Understanding what
motivates consumers illuminates how to speak to them in ways that will initiate action.
PRIVATE LABELS
Private label products or services are typically those manufactured or provided by one
company for offer under another company's brand. Private label goods and services are
available in a wide range of industries from food to cosmetics to web hosting. They are
often positioned as lower cost alternatives to regional, national or international brands,
although recently some private label brands have been positioned as "premium" brands to
compete with existing "name" brands.
Private labels serve many purposes.
Exclusivity and Differentiation to retailers.
Plugging a need gap -- for instance, Big Bazaar's label DreamLine is aimed at
providing shoppers the entire gamut of home improvement solutions under one
brand.
Retailers are also spurred to launch private labels given the low penetration of
most categories in India.
Then there is the aspect of supply chain efficiencies.
Private labels also help in cutting down on intermediaries
Dropping cost
Better margins for retailers
More customer discounts
EXAMPLE: Big Bazaar: DreamLine, Kryo, Pure, Premium Harvest, Tasty Treat, Clean Mate
and Care Mate
SEGMENTATION
The are many ways that a segment can be considered. For example, the auto
market could be segmented by: driver age, engine size, model type, cost, and so
on. However the more general bases include:
by geography - such as where in the world was the product bought.
by psychographics - such as lifestyle or beliefs.
by socio-cultural factors - such as class.
by demography - such as age, sex, and so on.
A company will evaluate each segment based upon potential business success.
Opportunities will depend upon factors such as: the potential growth of the segment
the state of competitive rivalry within the segment how much profit the segment will
deliver how big the segment is how the segment fits with the current direction of the
company and its vision.
Market segmentation is the process in marketing of dividing a market into distinct subsets
(segments) that behave in the same way or have similar needs. Because each segment is
fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a
given marketing strategy. That is, they are likely to have similar feelings and ideas about
a marketing mix comprised of a given product or service, sold at a given price,
distributed in a certain way and promoted in a certain way.
Targeting strategy or targeting is the selection of the customers you wish to service.
The decisions involved in targeting strategy include:
market segmentation
target choice
product positioning
market maturity
diversity of buyers' needs and preferences
strength of the competition
the volume of sales required for profitability
Targeting can be selective (eg.: focus strategy, market specialization strategy or niche
strategy), or extensive (eg.: full coverage, mass marketing, or product specialization).
In marketing, positioning has come to mean the process by which marketers try to create
an image or identity in the minds of their target market for its product, brand, or
organization. It is the 'relative competitive comparison' their product occupies in a given
market as perceived by the target market.
For many a product is simply the tangible, phsysical entity that they may be
buying or selling. You buy a new car and that's the product - simple! Or
maybe not. When you buy a car, is the product more complex than you first
thought? In order to actively explore the nature of a product further, lets
consider it as three different products - the CORE product, the ACTUAL
product, and finally the AUGMENTED product.
These are known as the 'Three Levels of a Product.' So what is the difference
between the three products, or more precisely 'levels?'
The CORE product is NOT the tangible, physical product. You can't touch it.
That's because the core product is the BENEFIT of the product that makes it
valuable to you. So with the car example, the benefit is convenience i.e. the
ease at which you can go where you like, when you want to. Another core
benefit is speed since you can travel around relatively quickly.
The ACTUAL product is the tangible, physical product. You can get some use
out of it. Again with the car example, it is the vehicle that you test drive, buy
and then collect.
The AUGMENTED product is the non-physical part of the product. It usually
consists of lots of added value, for which you may or may not pay a
premium. So when you buy a car, part of the augmented product would be
the warranty, the customer service support offered by the car's manufacture,
and any after-sales service.