Transcript Marketing and Design

Understanding
customers...
Marketing and Design
Today..
• Examine core concepts of
Marketing
• Understand the role of
marketing in industry..
• Why segment markets?
• Methods for gathering more
detailed information and
segmenting markets.
The Marketing Concept
• Concerned with determining the
needs, wants and values of a
target market and directs a
company to delivering the
desired satisfactions more
effectively and efficiently than
its competitors.
Marketing developed..
• Because there was a preoccupation in companies that
focused far to heavily on
production as the overriding
business activity.
• A large communication gap
opened up between customers,
business and suppliers.
Core Marketing Aims
• Needs, wants and demands (what
people want)
• Products and Services (What you
provide)
• Value, Satisfaction and Quality
(How you provide it)
• Exchange, Transactions and
Relationships (How you keep
providing it)
• Markets (Where you provide it)!
Understanding
Markets..
• The difference between marketing
and a market.
• Marketing is the activity and
comprehensive function of many
interrelated activities, aimed a
profitably fulfilling the needs of a
chosen customer group.
• New product development is seen as
part of this work.
• A market is simply a term for a set
of actual and potential buyers of a
product.
Specific Markets..
• A ‘Market’ consists of buyers that
normally share similarity; or common
characteristics. They can be simply
described as follows:
• Geographic – The British Market, The
European Market.
• Product Based – The computer and video
games market, The car market.
• Need based – The home security market
• Or combinations – The European car
market.
Markets, Products and
Services.
• Classifications of Markets include
both consumer and industrial
markets.
• Consumer Market: Households
that buy and use goods or services
for themselves.
• Industrial Markets: Organisations
who buy and use goods or services
for themselves, commercial
organisations and nationalised
industries.
Markets, products and
Services.
• Products and Services are the basis
of and organisations offering to a
chosen markets. The Service sector
dominates industry in the UK, as
with most developed countries.
• A product – an tangible item to the
consumer.
• A service – an intangible benefit
received by the purchaser. E.g.
insurance.
Products and services.
• Obviously some companies
offer both a product and a
service, or package of services
that goes with it.
• Purchasing a computer with a
on-site warranty..
• Purchasing a car with an AA
membership etc.
Identifying opportunities.
• Marketing seeks to obtain
competitive advantage over rivals in
different Markets. Companies are
interested in sustained competitive
advantage!
• Marketing isn’t rocket science – to
ensure competitive advantage and
long-term profits and company
needs to ask a set of simple
questions..
Sustainable competitive
advantage.
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What business are we in?
What needs are we going to serve?
Where do we want to go?
How are we going to get there?
• These are simple questions but the
connotations of them are very large
and involve much strategic planning
and careful implementation.
The big questions..
• What business are we in? Type, size, sectors,
competitors, geographic location, current economic
status, business potential etc.
• What needs are we going to serve? Customer
profiles, market strategy, segmentation,
product/service planning, NPD, market research,
etc.
• Where do we want to go? Business planning and
objectives, financial management, resources,
adequate staff, potential for expansion, profiteering.
• How are we going to get there? Overall strategy,
product range and service offerings in tune with
market needs and wants, coherent brand identity,
design strategy, set out into long term and sort term
objectives.
Details, details..
• How to satisfy the needs of the market..
questions to ask to begin planning and
research..
• What are the needs to satisfy?
• What is a realistic market aim for..
• The products to make.. Services to offer.
• Identify the exact needs of customers
• Conduct planning, research and
service/product development.
Identifying needs..
• So how can we just ‘find out’ what
customers needs are?
• Well to start with – you’re a
customer, what do you want? This is
always a good starting place to
begin research, and a good starting
place as a designer too.
• Market segmentation, targeting and
positioning.
STP – Segmenting,
targeting, positioning.
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The heart of the modern marketing is
based on the principles of Segmenting,
Targeting and Positioning.
Market Segmentation is the recognition
that customers in a market area or sector
are not homogenous. And follows these
basic premises:
Customers are different
Differences in customers relate to
differences in demand.
Segments of customers can be isolated
within the overall market and targeting
specifically.
Why segment markets?
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Better matching of customer needs
Enhanced profits
Better opportunity of growth
Retention and good relationship
with customers.
Targeted communications, good
brand associations.
Stimulation of innovation!
Market share is ,maintained.
Excellent target for gathering
specific market intelligence.
Targeting..
• Once you have segmented your market into groups
of users, all with specific demands, you can split
them into those that will be most receptive to your
product or service and those which may be less
profitable to target. Using you most receptive
segments you can them tailor your strategies to
target effectively. If your research and strategies
are correct, that you stand a good chance of making
headway.
Factors to consider in
segmenting and targeting.
• Your looking for the most receptive segment – the
best target for your marketing weapons (products)
• Size of the market – is it big enough to sustain
profits?
• Growth potential – is the market likely to increase
as your product is popularised, where can it grow
to?
• Profitability – is the segment likely to buy your
product at the price you must sell it for, will
demand increase, what will you have to invest to
maintain the market?
• Economies of scale – Will you be able to meet
demand and maintain profits whilst still investing
in product development and manufacture and
making reasonable turnover.
• Risk – What are the potential risks with the market
sector and how can they be planned for? Lloyds of
London..
Market positioning..
• Once the segment(s) are selected, the
company must seek to differentiate itself
from competitors by building effective
strategy.
• What's the effective strategy? – The Four
P’s of course – remember Apple in
Lecture one?
• Getting this right is problematic, markets
are highly competitive, but if your careful,
detailed and design-led you can be highly
successful.
Market Strategy..
“The right product, in the right place, at the
right time and at the right price”.
(Adcock et al)
• The marketing mix is the way in which
companies pursue their market objectives,
the action part of the plan!
• It is the set of strategies by which the
company can influence buyers (for better
or for worse)!
Overall..
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Successful marketing requires;
Segmentation:
Consider variables for segmenting the market
Look at profiles of emerging segments
Check the validity of emerging segments
Targeting
Decide on target markets, or segments, focusing
upon which are going to be the most respondent
to your product.
• Positioning
 In each of the segments, understand your
customers wants and need and position yourself
to respond to them more effectively then your
rivals.
Successful Marketing
Requires..
• POISE!
• Profitable
• Offensive (rather then
defensive)
• Integrated
• Strategic (is future orientated)
• Effective (gets results)
• Lets have a break – 10mins!
Cuppa!!!
Remember Segmentation?
• Methods of segmenting markets
and creating customer profiles.
Market segmentation..
• We know that companies place high
emphasis on analysing market
sectors and dividing them up into
areas of specialisation.
• These segments can be focus on and
define the target market and its
demands.
• Therefore its critical to get an
accurate appraisal of your market
segment.
Market segmentation..
• Marketing uses research and
analysis techniques to define
‘demand patterns’ of specific
buyers.
• Basically – What product is
demanded, by what people and
why it will be brought.
• Companies use this to target
sectors in different ways..
• Mass Markets (undifferentiated)
• Multiple Niche (differentiated)
• Market Niche (concentrated)
Market research and Analysis
• Techniques used to define market
segmentation.
• Geographic – region, climate population
density.
• Demographic – come back to this!
• Behavioural – Attitudes, knowledge,
loyalty, occasions.
• Psychographic – Personality, lifestyle.
Demographics..
• Relates to specific data to do with population.
• Considers..
1. Age
2. Sex
3. Education
4. Occupation
5. Family size
6. Lifestyle
7. Income
8. Religion
9. Nationality
Age.
• Different age groups want different
things and have different needs.
• In recent years the competitiveness of
markets has led to more specifically
targeted age groups.
• Age groups doesn’t just apply to human
demographics!
• So – lets have a look at some
demographic representation..
Family life cycle..
• Bachelor Stage: young, single, living at home – Few
financial commitments, recreation and fashion
orientated. Buy: Cars, entertainment, holidays!
Full nest 1: youngest child under 6 years old
• House buying is important, liquid assets are low,
dissatisfied with level of savings and financial
position generally. Buy: Medicines, toys, baby food!
Empty Nest 1
• Home ownership at peak. Financial situation is good, savings
increased. Interests in travel, recreation and self-education. Buys:
More expensive Holidays, luxuries and home improvements!
Occupation:
• Class – though less relevant these
days!
• Manual, Skilled, Semi-Skilled,
Professional.
• Linked to income (obviously)
• Though not always in disposable
income! – family life cycle!
Targeting Markets..
• So we have used demographic
study methods to help define
market segments within a
market sector.
• Now we need to target a
particular segments and assess
them to see which will be the
most respondent to our product.
Marketing Intelligence
• This feeds into the strategic
planning processes companies
use, that we discussed last
week.
• Market intelligence
continuously reviews market
segments your company is
targeting, giving updates on
changes that affect your plans!
Sources of Market
Intel..
• Companies can take many
different routes to obtain
information for product
planning. This information
may increase or decrease
production or be the stimuli
for new product design.
Sources of Market
Intel..
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Feedback from customers
Undertake formal market surveys
Monitor sales from existing product.
Monitor competitor’s products and
activities.
5. Combination of all these!
6. Market analysis techniques. (next
lesson)
Stimuli for New Product
Development.
• Market Pull – Fashions and trends driving
the market – consumer demand.
• Technology push – new technology
pushing new product on to the market…
hopefully successfully.
• Change in company circumstances or
change in objectives and resources.
• The present – a combination of above,
human factors and development of
personalised products – design is no longer
new, its expected!
Market stimuli
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Move-up market
Expand exports
Gap in the market
Change in market demand
Moving to a new market sector.
Legislation/Standards.
Technology Stimuli
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Improved specification
Technical developments
Spin-off of another development
Development potential of existing
product range nearing end of life
cycle.
• Example?
• Legislation and Standards.
Company Stimuli
• Gap in company range
• Rationalise company range
• Suggestion from marketing –
development of new strategy.
• Cut costs!
• Improve identity.
Customer focus in design..
• Direct involvement of customers or enduser in the product development process
can:
• Result in a flow of user-initiated
improvements to original designs.
• Provides invaluable market know how to
convert an idea to commercially viable
product.
• Lead to endorsement in the market place..
E.g. predator football boot!
Why?
• The idea about being in-touch
with your customers needs is
that it allows you to anticipate
market changes in demand,
before your rivals!
Customer Profiles
• See hand out with today’s
notes.
Summary..
• How to define a market segments using
demographic study.. There is lots in
this area, all straight forward so have a
look into it!
• Targeting market sectors – more on
analysing and defining them next
week.
• Market Intel – Technology Push and
Market Pull
• Customer Focus in Design – consumer
analysis, human factors.
So what have we
learned?
• We have reviewed how you can
analyse strategy by assessing a
current product – looking at the
apple I-Pod
• We have seen how the 4 P’s
including Brands and promotion
strongly influence the customer.
• Today we have looked at
Understanding Markets and
segmentation and analysis.
Project planning..
• With your experience from the first year
– you should now be able to begin to
determine –
• The scope of your market area
• Who your potential customers are
• Who your potential rivals are
• You can begin to analyse products and
assess their development.
• You can begin to define the market
sector and find information about it.
• You can begin to think about how you
design concepts respond to the market in
the context of your studio project.
• Next Week
• Market Analysis
Thanks!