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Assignment Have you ever been up late at night, watched a TV commercial

Assignment

Have you ever been up late at night, watched a TV commercial for a business and wondered why that company had produced a TV commercial at al? There is a Midwesten company that manufactures manhole covers-apparently quite good manhole covers. Once in a while they will produce a TV commercial about their great company and their great manhole covers. But how many potential purchasers of manhole covers are watching TV late at night, between the Weather report and the Agriculture news? f your guess is “not many,” you would probably be right The trick to avoiding marketing errors like this is to carefully “segment” the market into groups who are more ikely or less likely to buy. You can segment customers by age, by geography, by gender, by income, by product use, and in many more ways. There are a lot of reasons why we would go through this effort, but primarily the idea that the more you can know about your customers the more you can target the product and the message to those customers specifically. There is a famous comment by Henry Ford that was, in essence, this: “We will make our product in any color the customer wants, as long as it is black (a philosophy that almost doomed Ford in the early days). Making all of your cars black is a great example of undifferentiated targeting. Of course the other side of that is to concentrate your marketing on smaller segments, ultimately making each car a different color for every customer If you have ever shopped at Amazon you have seen the other side of this process. Amazon watches your buying behavior (and browsing history) to give you suggestions tailored to you. That sales approach puts the customer’s expressed needs at the core of Amazon’s marketing. They can avoid promoting books or products to you that you are not interested in by making a decision about what you would like. There are certainly advantages and disadvantages of either approach. If you make all your products (or all of your ads promoting those products) completely the same, you save on both manufacturing and promotional cost. The problem with the “one size fits all” approach is the products are frequently bland or boring, and your products ane more vulnerable to your competitors imitating them. If you concentrate your product and your product’s promotion to a smaller segment you likely will see better results. You may not be able to compete with the biggest and most successful nose to nose, but you may be able to find small markets the larger companies choose to ignore, and exploit those opportunities. There are a couple of potential problems with this approach. The segments selected may be too small or to changing to be of use. Generally costs go up with smaller production runs as wel. Occasionally companies go after several segments at once, which is called Multisegment Target Marketing. This is a more difficult tactic for a number of reasons, not the least of which is identifying and isolating distinct segments that you wish to target. While this tactic can be successful, it is used cautiously because of generally higher costs, and the possibility of introduce a product that is successful but that you find the products success comes at the expense of another. Your goal generally is to try to take business from competition and not from yourself. However, there are times you need to introduce a product that will cannibalize your product before your competition can. is where you The more specific you can be in describing your customer, the better job you can do of designing. promoting, and pricing that product, and of eliminating wasted

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