The process of reviewing market opportunities often results in identifying distinct groupings of consumers who have unique wants and needs. This can result in a decision to approach each market segment with a unique marketing offering. Consider the soft drink market. Here, major segments of ultimate consumers are distinguished by the type of purchase situation: (1) the food store segment, (2) the cold bottle or vending machine segment, and (3) the fountain market, which includes fast food outlets. Unique packaging arrangements (container type or size) point of purchase promotions and other variations are made for each segment.
In other cases, the marketer may decide to concentrate company efforts on serving only one or a few of the identified target markets. An excellent example of this occurred in the bath soap market. By segmenting consumers according to their lifestyle patterns and personalities, the Colgate- Palmolive Company was able to identify a unique group of consumers in need of a certain type of deodorant soap. Development of Irish Spring for this target group led to the capturing of 15 percent of the deodorant soap market within three years of introduction.
Marketing Mix Determination:
This stage involves developing and implementing a strategy for delivering an effective combination of want satisfying features to consumers within target markets. A series of decisions are made on four major ingredients frequently referred to as the marketing mix variables product, price, place, and promotion. The following characteristics in each area provides a small sampling of how knowledge of consumer behavior is relevant for decision making.
Product: The nature of the physical product and service features are of concern here. Among decisions that are influenced by consumer behaviors are:
What size, shape, and features should the product have?
How should it be packaged?
What aspects of service are most important to consumers?
What types of warranties and service programs should be provided?
What types of accessories and associated products should be offered?
Wet and wild:
An illustration of the potential that marketers may develop from various product forms of a good involves a certain liquid refreshment. United Liquors markets a bottled version of it. Adolph Coors has test marketed its own brand. So has Pepsi Cola. Forty eight million gallons of the bottled variety were imported into the United States alone in 1989. For a while it was viewed as a drink for yuppies, yet in New York City one could often see construction workers and children in subways drinking it. It can sell for $1.50 or more per small bottle at a bar in Boston’s Quincy Market. At the same time, one can get the generic form of it “on tap” for free or for a nominal amount.
The good is water, the basic necessity of life, and new market opportunities for it have opened up in two product areas – bottled water and water treatment systems. The bottled variety includes brands such as Evian and Saratoga, both owned by the same company, and Perrier and Poland spring, also both owned by a single, different company. Some brands are carbonated while others are not.
It appears that a vast number of consumers believe that these bottled waters are more pure or healthier for you than well water or municipal tap water. In fact, some brands have long been associated with cleansing of the body and are used in priced health spa. The belief that these branded waters are healthier is not necessarily supported by readily available data. In fact, there are few if any government standards for bottled water, and in some cases sellers of bottled brands actually get their water from municipal suppliers and then give it some extra treatment. However, the potential in this market segment has been very impressive – a sales growth of approximately 500 percent between 1978 and 1988.
Another market segment has significant potential. A wide variety of water treatment systems exist for tap water. These range from filter systems placed on the faucet to the entire home or commercial building treatment systems using various filtration processes, including carbon filtering and the reverse-osmosis process. Some devices, such as that produced by Water Pic., are designed to filter water at the tap. Other companies, such as AMTROL, produce entire home or commercial building systems.
The fears whether real or baseless, that many have regarding the safety of home drinking water have encouraged sales growth in these markets. Consequently, we see that companies have taken different product design approaches to meet some very basic needs and wants of the public.
Price: Marketers must make decision regarding the prices to charge for the company’s products or services and any modification to those prices. These decisions will determine the amount of revenues the firm will generate.