Thursday, March 30, 2017

Antecedents of Target Marketing

Antecedents of Target Marketing
1.  In the first part of the video, Jen Mullin, the vice president of Marketing for Numi Organic Tea, clearly describes their typical customer. Using the information on segmentation you learned from reading Chapter 8 in Lamb, et al. (2014), discuss who the customer is and how the Numi marketing team figured that out?

ANSWER:  Market segmentation is when a market gets divided up into segments that are meaningful, identifiable and similar.  (Lamb, Hair & McDaniel, 2014).  Market segmentation helps companies to be able to focus their resources better and make it easier to define marketing objectives (Lamb, Hair & McDaniel, 2014). 

The market segments have to meet four criteria to be successful:  substantiality, identifiability and measurability, accessibility and responsiveness (Lamb, Hair & McDaniel, 2014).  Substantiality means that the market segment created must be big enough for it to make sense to create a special marketing mix for that particular segment (Lamb, Hair & McDaniel, 2014).  Identifiability and measurability means that  it is easy to identify certain characteristics of the segment and easy to collect and use data describing the segment and different demographic aspects about it (Lamb, Hair & McDaniel, 2014).  Accessibility means that the segment that is created should be made up of people who are easy to make contact with (Lamb, Hair & McDaniel, 2014).  Lastly, responsiveness means that separate marketing mixes should not be created if each segment would respond to one marketing mix the same (Lamb, Hair & McDaniel, 2014). 

Mullin describes the target customer as college-aged females and young mothers who are interested in the organic aspect of the tea.  Numi figured out that their customer was college-aged females and young mothers by demonstrating sampling to survey their customer base in a way.  Once people tasted the tea they were more apt to give their true opinions and allowed Numi to get honest feedback and collect data on who their target customer is.  This allowed them to break down the market into segments where they could better focus their resources and gain clear objectives. 

ANSWER:  Numi’s principle marketing plan is to target the college-aged females and young mothers who value the organic aspect of the tea.  To target this segment, they involve themselves in a lot of community events that give back, like breast cancer fundraisers and things of that sort, that the young mothers and college-aged females are likely to attend.  Numi also incorporates taste testing into their market strategy to get their customers to truly try their product, having confidence that once they do, they will really like it. 

Numi likes to partner with restaurants as well that sell food that is along the lines of their organic tea.  They think that if someone asks for a cup of tea there and they have a large variety and really like it, they will inquire about the brand and also look into where they can buy more.

Numi is a very high quality tea so their prices are higher than the average tea.  They are an organic product which makes it more expensive to begin with and also have a variety of flavors that suit most people’s tastes.  They are becoming the world’s largest brand for organic tea, so they will not be reducing their prices. 

Numi was surprised by how many larger retailers wanted to partner with them and carry their product as well.  They thought because their product was more expensive than what people are used to paying for tea, that they would not be accepted at larger retailers like Costco and such, but they found that there is a huge demand for their product and people really like seeing it on the shelves. 

a.  Geographic segmentation
b.  Demographic segmentation
c.  Ethnic segmentation
d. Psychographic segmentation     

ANSWER:  Describing the typical customer as female, college-educated tea lover is using psychographic segmentation.  Psychographic segmentation is when the market is segmented by using the whole picture rather than just one aspect or characteristic.  Psychographic segmentation incorporates personality, motives, lifestyle and geodemographics into the segmentation (Lamb, Hair & McDaniel, 2014).  The personality is the “eco-mom” personality of a female who is concerned about the environment and like to use organic products.  The motive is also the fact that the female is motivated to do better for the economy as well as for herself and use eco-friendly products.  The lifestyle is a college-educated woman who is knowledgeable of the product as well as other aspects of the company such as charitable community involvement. 

a. Geographic segmentation
b. Demographic segmentation
c. Benefit segmentation
d. Usage-rate segmentation

ANSWER:  Benefit segmentation is segmenting the market using the benefit the consumer expects to get out of the product (Lamb, Hair & McDaniel, 2014).  Numi segmented their customer base into the group of people who are looking for the benefit of an organic product which is that the product is good for the environment and good for the consumer’s health.  Consumers of Numi also want tea that is of better quality than most teas out there so they are willing to pay a higher price for it.  Numi consumers also want the tea that they buy to be fair-trade meaning that it is reasonably priced and the benefits are of equal value to the consumer. 

a. Family life cycle
b. 80/20 principle
c. Undifferentiated targeting strategy
d. Concentrated targeting strategy

ANSWER:   Family life cycle segmentation is a series of family stages that incorporate a combination of age, the presence or absence of children and the marital status of individuals (Lamb, Hair & McDaniel, 2014).  It is really important or Numi to pay particular attention to the family life cycle segmentation because as things change in people’s lives, their tastes and outlook on products may change as well.  For instance, if someone was buying the tea as a college student from their college cafĂ© and then they graduate, get married, and have children, they might not have money to buy premium quality tea anymore and may have to settle for regular commodity tea. 

a. Age
b. Income
c. Ethnicity
d. Gender

ANSWER:  The CEO of Numi was very shocked to find out that the customers Numi was targeting at the high-end spas and fine restaurants were also shopping at Costco.  They realized that the consumer who would be going to high-end spas and fine restaurants shopped at Costco to save on packaging costs to buy groceries in bulk rather than paying for packaging to buy less of the product.  There was no real income difference in the customer because they were the same customer, just visiting very different places.  This makes it easy for Numi to not have to create another plan for another segment of customers. 

a.  Perceptual mapping
b.  One-to-one marketing
c.  Product differentiation
d.  Market segmentation

ANSWER:  Product differentiation is what a company uses to differentiate their product from the product of their competitors (Lamb, Hair & McDaniel, 2014).  Product differentiation can either be a real difference in two products or a perceived difference in two products (Lamb, Hair & McDaniel, 2014).  Numi’s product differentiation is a real difference in their product when comparing it with other commodity teas.  Their tea is organic and of premium quality because they use whole leaves.  Their raw ingredients are really expensive so their price is higher than their competitors, but not when you compare it to the quality of tea the consumer gets. 

a. Undifferentiated targeting
b. Concentrated targeting
c. Multisegment targeting
d. Niche targeting

ANSWER:   Numi found out that they had more than one target market.  Numi’s target market are eco-moms, college students and family travelers.   They target consumers who are at high-end spas as well as fine dining restaurants.  Their customers who are all there are also shopping at places like Costco, which gives them the benefit of mass selling their product without much effort to.  Multisegment targeting is when a company develops different marketing mixes for different segments (Lamb, Hair & McDaniel, 2014).  I think it would be irrelevant for Numi to incorporate multisegment targeting because, although they have more than one segment, there would not be a different reaction to marketing to any of the segments because they overlap and all go to the same places. 

a. True
b. False

ANSWER:   Optimizers are companies who carefully choose products because they solicit bids and study all proposals and consider a large number of companies before making their decision (Lamb, Hair & McDaniel, 2014).  Mullin knows that companies who seek Numi tea to go into gift baskets are optimizers because most of the time the gift baskets are consistent of all high quality products that are also organic and have the same quality that Numi tea does.  The promotional giveaways help Numi to market their product while it is beside other high quality and well-respected brands and products.

a. True
b. False

ANSWER:   Perceptual mapping is a way to graph the location, brands or groups of products that customers are thinking about (Lamb, Hair & McDaniel, 2014).  The channel conflict that exists for Numi is that they are marketing their tea at high-end spas and fine dining restaurants.  They are also selling their product at places like Costco and Target.  When the spas and restaurants find out that Numi’s tea is at “lower-end” stores like Costco and Target, there can sometimes be a conflict because they want high-end products that make their customers feel special.  Creating a perceptual map can help Numi to visually see where their product is being sold and what other products may be at the same location or may be bought by the same consumers.

Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). MKTG5. Mason, OH: South-Western, Cengage.

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