Marketing: Goods and Services

Overview

This revision note addresses fundamental marketing strategies related to products, focusing on both goods and services. Key topics include market segmentation, product differentiation and positioning, branding, and packaging functions.

Definitions

Goods:

• Definition: Physical items that can be owned.
• Examples: Furniture, cars, clothing.
• Characteristics: Ownership, physicality.

Services:

• Definition: Intangible activities or benefits.
• Examples: Consulting, education, repair services.
• Characteristics: Intangibility, perishability, variability.

Key Characteristics of Goods vs. Services

• Ownership:

  • Goods: Transferable ownership through purchase.
    • Example: Purchasing a car.
  • Services: Experience-based, cannot be transferred.
    • Example: Receiving a haircut.

• Tangibility:

  • Goods: Can be physically handled.
    • Example: Items of clothing.
  • Services: Intangible; experiential.
    • Example: Education services.

• Perishability:

  • Goods: Storable for later use.
    • Example: Storing furniture.
  • Services: Consumed at the point of delivery.
    • Example: Attending a live concert.

• Variability:

  • Goods: Uniform quality.
    • Example: Mass-produced furniture.
  • Services: Quality may fluctuate.
    • Example: Variable tutor effectiveness.

Market Segmentation

Overview

Market Segmentation: The process of dividing a market into distinct groups of buyers based on different needs, characteristics, or behaviours.

• Objective: Customise marketing strategies to meet specific consumer needs.
• Efficiency: Enhance business operations by targeting the appropriate audience.

Key Segmentation Variables

• Demographic Variables:
  • Age: Catering to needs of different age groups, e.g., children vs. seniors.
  • Gender: Products tailored for men or women.
  • Income: High-income consumers for premium products.
• Geographic Variables:
  • Region: E.g., Snow gear for colder regions.
  • Urban vs. Rural: Varying needs based on lifestyle.
• Psychographic Variables:
  • Lifestyle: Products catering to active living, e.g., sports equipment.
  • Values: Eco-friendly choices for sustainability-aware consumers.
• Behavioural Variables:
  • Brand Loyalty: Reliable revenue from loyal customers.

Product Differentiation and Positioning

Overview

Product Differentiation and Positioning are vital marketing strategies in a competitive market.

• Product Differentiation: Establishing product uniqueness.
• Positioning: Crafting a specific perception in the consumer's mind.

Developing a USP

Unique Selling Proposition (USP): A distinguishable benefit setting a product apart.

Positioning Elements:

• Product Name: A memorable name aids brand recall.
• Packaging: Essential for brand perception.
• Brand Image: Connects through emotional and perceived values.

Positioning Maps

A Positioning Map visually demonstrates a product's placement in the market.

Steps to Construct:

1. Select Attributes (e.g., price, quality).
2. Gather Competitor Data.
3. Plot Positions.

Branding

Definition and Importance

Branding plays a critical role in market strategy, fostering customer loyalty and enhancing brand equity.

• Brand Loyalty: Customer's commitment to repeated purchase.
• Brand Equity: Value added through perception and reputation.

Elements of Branding

• Brand Name and Logo:

  • Unique identifiers that entice consumers.

• Slogan and Identity:

  • "Just Do It" reinforces brand identity.

• Brand Strategies:

  • Drive influence through Authenticity and Differentiation.

Packaging Functions

Protection and Promotion

Product Safety: Essential for ensuring safety and compliance.

• Protection Role:
  • Tamper-evident seals:
    • Prevent unauthorised access.
  • Impact-resistant materials:
    • Mitigate risk of damage.

Information Conveyance

• Labels and Instructions:
  • Convey necessary information; compliance is required.

Design Elements

• Visual Aspects:
  • Elements such as colour, shape, and typography can influence purchasing decisions.

Exam Tips

• Visual Maps: Use diagrams to conceptualise segmentation and positioning.
• Case Studies: Examine brands like Amazon and Tesla for insights into market strategies.
• Practical Application: Implement these concepts in real-world scenarios, focusing on digital and sustainable marketing.

This note offers a detailed overview of essential marketing strategies critical for navigating the business landscape of goods and services. From segmentation to branding, each aspect plays a key role in effective consumer targeting and profitability.