DEFINING YOUR PRODUCT AND REACHING THE

MARKET

Dr. Dilini Hemachandra,

Marketing?
Marketing is the management process responsible for identifying,
anticipating, and satisfying customer requirements profitably (CIM,
2001)

Marketing is the process of planning and executing the conception,

pricing, promotion, and distribution of ideas, goods, and services to
create exchange and satisfy individual and organisational objectives
(AMA, 1985)
MARKETING?

❑The two primary roles of the marketing is to attain and retain

customers
How?
❑Through providing customers with the level of value they require
❑At a cost that is profitable for the organization and
❑in a way that maintains the organization’s desired position in the
market place
What are Markets?.
• A market is the set of actual and potential buyers
of a product.
• If an aggregate of people/organizations to be a
market, they:
❑Must need a particular product in a product class
❑Must have the ability to purchase it
❑Must be willing to use their purchasing power
❑Must have authority to buy the specific product
 Marketing Offerings (Products, Services, and
Experiences);
Market offerings:
• Some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.

• They Include:
(a) Goods: anything that can be offered in a market for
attention, acquisition, use, or consumption that might satisfy
a need or want

(b)Services :are products that consist of activities, benefits or

satisfaction that is essentially intangible and does not result in
the ownership of anything
 Goods and Services

Goods Services

• Tangible • Intangible
• Can be stored • Cannot be stored. Consumed
• Easy maintain quality of each while produced
unit • Easy maintain quality of each
• Can be owned unit
• Cannot be owned
Product Anatomy
MARKETING MANAGEMENT AND
MARKETING MANAGEMENT
ORIENTATIONS.
Marketing Management

• Managing the company’s marketing activities.

• What is management?

Management defined as all the activities and

tasks undertaken for archiving goals by
continuous activities like; planning, organizing,
leading and controlling.
Marketing Process

Source: Kotler and Amstrong, 2015

 Marketing Orientations/Marketing
Concepts of Companies

Holistic
Production Product Selling Marketing Societal Marketing
concept concept concept concept concept concept
 Marketing Management Orientations.

Production concept:
Focuses on the Production process->The aims is profit through low cost
(i.e. Increase production, cost reduction and control)
Assumptions: Consumers will favor products that are available and
highly affordable
Product concept:
• Focuses on the Product/high quality->
The aim is to profit through premium
price (i.e. Improve quality levels (as perceived by
the business) and make profits through volumes)
• Assumptions: consumers favor products that offer
the most quality, performance, and features. Focus
is on continuous product improvements.
Marketing myopia?
• Marketing myopia occurs when a company
becomes so taken with their own products (
through either production or product orientation)
that they lose sight of underlying customer needs.
• Eg. Making a mouse trap, and focusing on improving it.
• But consumers may find different solutions to the problem of
mouse!!
SELLING ORIENTATION/CONCEPT
• Focuses on the Sellers` needs-> the aim Profit
through high turn over via aggressive advertising &
promotion (i.e. though developing a strong sales
force to convince consumers to buy whatever the
firm produces)

• ASSUMPTION-Customers are inherently reluctant to

buy.
• When supply exceeds demand the focus shifts to hard selling
• Such aggressive selling focuses on creating sales transactions
rather than on building long-term, profitable customer
relationships.
• The aim often is to sell what the company makes rather than
making what the market wants
• Typically practiced with unsought goods—those that buyers
do not normally think of buying, such as insurance (These
industries must be good at tracking down prospects and
selling them on a product’s benefits)
All these three styles have the factory as the
primary focus.

• Production: producing the product,

• Product: making it better
• Selling: selling what is produced.
Marketing Management Orientations

• Marketing concept:
Focuses on the Needs/wants of the market/customer
→ The aim is to profit through customer satisfaction
(i.e. Defining needs/wants in advance of production,
profit through customer satisfaction and loyalty)

• knowing the needs and wants of the target markets

and delivering the desired satisfactions better than
competitors do
Societal/Ethical/Sustainable marketing Concept:
• Making good marketing decisions by considering consumers’ wants
and long-term interests
• company’s requirements
• society’s long-run interests
Marketing Management Orientations

Societal
marketing
Evolution of Marketing Concepts/Orientations:
•Business/Marketing Strategy
• Business Strategy: the process of matching
organizational resources with the changing
opportunities in the business environment (i.e.
developing a strategic fit between organization and
its environment)
• Marketing Strategy is the process of matching
organization’s marketing resources (i.e. marketing
mix) with its changing marketing opportunities
 Quiz
1. Take a product as an example and explain the product anatomy
 The Marketing Mix:
• Set of tools (four Ps) the firm uses to implement its marketing
strategy. It includes product, price, promotion, and place.
Marketing Mix:
Marketing Strategy and Marketing Mix

Copyright ©2014 by Pearson Education, Inc. All rights reserved

 Segmenting, Targeting, Differentiation and
Positioning

❑Segmenting:
❖Market segment: A group of consumers who
respond in a similar way to a given set of marketing
efforts
❖Market segmentation: Process by which
customers in heterogeneous markets are
grouped into smaller, more similar and
homogeneous groups who requires the same
marketing mix.
Segmenting, Targeting, Differentiation
and Positioning….
Advantages of Segmentation
• Customer Analysis- Understand
customers/their behavior.
• Competitor Analysis- Other companies
who targets the same customer group
with similar marketing offerings.
• Efficient and Effective Resource Allocation.
 CUSTOMER ANALYSIS:
Segmentation Variables/Bases
❖Demographic variables
❖Geographic
❖Psychographic variables
❖Buyer readiness stage
Selecting Segmentation
Variables/Bases
❑Variables-dimensions/characteristics of individuals,
groups or organizations that are used for dividing a
total market to segments
❑No best way
❑Companies should choose from an array of different
options
❑Should relate to customers’ needs for, uses of, or
behaviour towards the product
Eg. Can food market be targeted based on religion?
Selecting Segmentation Variables/
Bases..
(1) BASIC CUSTOMER CHARACTERISTICS
❑Demographic (Tangible, measurable, observable):
• Studying of population-what its characteristics are
• Age structure (eg. Ready-to eat breakfast cereals, age related banking
segments, changing age profiles)
• Gender distribution (gender related banking segments, clothes,
cosmetics, alcoholic drinks, books, magazines
• Ethnicity (food, music)
• Occupation
• Level of education
• Marital status and family structure (eg. Toiletries-range of different
sizes to suit family sizes)
• income
❑The family life cycle (an imaginative way of combining demographic variables
• Family life cycle-Product needs vary according to marital status and number and age
of children.
Stage Family characteristics Buying characteristics
Bachelor Young, single not at home Leisure-oriented, buying basic
furniture, equipment for the
mating game
Newly married Young- no children High purchase rate, particularly
of durable such as cars, cookers,
fridge, TV, Hi Fi
Full nest 1 Youngest child under 6 Baby foods, vitamins, toys,
medicine
Full nest 2 Youngest child 6 or over Foods, bicycles, larger sizes of
packages
Full nest 3 Older married couples with More tasty foods, furniture,
dependent children unnecessary appliances
Empty nest 1 Older married couple with no Buys holidays, luxuries
children living at home, family Home improvements
head in work
Empty nest 2 Family head retired Medical appliances, medical
care products
Solitary survivor ?
(in work)
Solitary survivor ?
(retired)
❑Geographic (tangible, measurable, observable):

❖Giving a physical dimension to customer groups (urban, rural, national,

regional, international etc.)
❖Urban/rural, National/regional, International, Global, Type of housing
❖Differences exists in terms of climate, terrain, natural resources, population
density, spoken language, taste, culture
❖Population density:
E.g.
(a) to locate a franchised restaurant a certain population density is
required
(b) traffic density thresholds to locate filling stations

Market density: number of potential customers per unit land area (i.e square
km)
❑Geo-Demographic

❖Analysis of customers based on where they live

❖Demographic and lifestyle data are combined with geographic
data
❖Enables defining types of neighborhoods and types of customers
within a neighborhood together with their buying characteristics.
❑ Psychographic: (Activities Interests Opinions
Demographics)
❖Multi-influence profiles of customer groups
❖Identifies customer groups with shared values
❖At the end of psychographic- produce lifestyles resulting from
o Motivations
o previous experience
o Attitudes, Values
o beliefs about themselves and broader issues
o Economic/demographic characteristic
o Psychological characteristics
o (Life styles- how do they spend their time, the importance of items in
surrounding (home, job etc.),
o Enables selling products on benefits that can bee seen to enhance the
particular lifestyle on a much more emotional level
Eg. Holiday companies often use lifestyles to segment markets
❑AIOD framework of lifestyle segmentation (Plummer, 1974)

❖Activities:
o Work, hobbies, social events, vacations, entertainment, club
membership, shopping, sports, community involvement
❖Interests:
o What is important/where their priorities lie –family, home and work
o Leisure, recreation, fashion, food and media
❖Opinions:
o Themselves, Others. Socio-Cultural issues
o politics
o Opinion on other influence on society such as Education,economics
and business
o Opinion on products and the individual’s view on future including
how their needs and wants are likely to change
❖Demographic:
o AIO + demographic characteristics
❑Difficulties in psychographic segmentation:
• Lifestyles are complex
• Many intangible variables
• Difficulties in defining relevant variables
• Difficult to measure consumers on some of these variables
❖ It can thus be difficult to track how the membership
of psychographic segment is evolving
 Quiz
1. i. Identify a product and describe segmenting variables/bases you
could use to segment the market
ii. Identify a target market for that product
iii. Describe changes you will make in the product to match the
needs/wants of the target market