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 café 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.

References

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

Numi Organic Tea Video

NUMI ORGANIC TEA VIDEO

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:

           

In the first part of the video on Numi Organic Tea, Jen Mullin, the Vice President of Marketing for Numi Organic Tea, described the typical consumer for their products as female, usually college educated.  They love tea and usually consume two to three boxes of tea a month.  They usually drink green tea and consume organic products.  Since they are targeting college to middle age women they are using age and gender segmentation to make up their target market.  They are also using income segmentation because there product is more expensive than others because of the resources they are using it affects who is willing to spend the extra money for the organic tea.  From the start they knew they wanted to target women so they started by donating samples to events and places where they knew women would be or frequently visit.  She stated that they would donate their products to events like breast cancer awareness events.  They were using a concentrated targeting market, which is described as a strategy to select one segment of a market for targeting marketing efforts. (Lamb. 2014).   Which is exactly what they were doing when they targeted events for females. 

2. What is Numi's principle marketing plan? In what way does Numi's marketing team use what they know about their target demographic to implement their marketing plan? 

ANSWER:

Numi’s principle marketing plan is to get their name and products out there to as many consumers as possible through donating and sending out samples to their targeted market areas.  They believe that by getting there product out there to as many people as possible and having people try their product, people will like their product and become returning customers. Target demographic is defined as segmenting markets by age, gender, income, ethnic background, and family life cycle. Through donating samples out to various events and retailers they have developed a demographic to target.  They figured out that there consumers are college to middle age, educated, middle class women.  Knowing that this is there customer base they continue to send samples and donate their products to places where they are.  For example they stated that they target events such as breast cancer awareness and colleges.  This allows them the best chance at growing their customer base and getting new customers.

Defend Your Answer Challenge: Highlight your multiple choice answer in yellow. Write a 100 (or more) word discussion in defense of your answer to the multiple choice and true/false questions using research from your textbook to help substantiate your understanding of segmentation, target marketing, and positioning. Apply APA style referencing in your writing.  

3) Jen Mullin, the vice president of Marketing for Numi Organic Tea, describes their typical customer as a female, college-educated tea lover, possibly an “eco-mom.” What type of market segmentation has she used to identify this customer group?

a. Geographic segmentation

b. Demographic segmentation

c. Ethnic segmentation

d. Psychographic segmentation     

ANSWER:

            The market segmentation that she uses to identify this customer group is Demographic segmentation.  Demographic segmentation is defined as segmenting markets by age, gender, income, ethnic background, and family life cycle. (Lamb, 2014)  All of the terms she uses to describe her typical customer would fall into one of the following categories, age, gender, income, ethnic background and family life cycle.

4) Another way Numi Organic Tea identifies potential customers is through what they want from the product; they are looking for organic, fair-trade, premium quality tea, according to the video. What type of market segmentation is used to identify customers in this way?

a. Geographic segmentation

b. Demographic segmentation

c. Benefit segmentation

d. Usage-rate segmentation

ANSWER:

            Numi Organic Tea also identifies there potential customer by what they want to get out of the tea.  Since these customers are looking for their potential benefits out of the tea the type of market segmentation they are using is Benefit segmentation.  Benefit segmentation is defined as the process of grouping customers into market segments according to the benefits they seek from the product. (Lamb, 2013)

5) Because Numi Organic Tea has identified more than one target market, for example, “eco-moms,” college students, and family travelers, they should be particularly aware of the ____________________, which helps explain how consumption patterns differ at different stages determined by a combination of age, marital status, and the presence or absence of children.

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 stages determined by a combination of age, marital status, and the presence or absence of children. (Lamb, 2013)  This type of segmentation helps when your consumers range in type because not everybody is at the same place in there life’s at the same time.  For example some college age students are married and some are not. 

6) The demographic variable that Numi Tea marketers were examining when they recognized that people who had discovered their product at a high-end spa or fine restaurant often shopped for groceries at Costco was _________________________.

a. Age

b. Income

c. Ethnicity

d. Gender

ANSWER:

            When Numi Tea marketers were examining the people who discovered their products at various places like Costco and high-end spas, they were examining the income demographic variable.  Normally people who shop the sales at Costco are not in the same income class as those who are using high-end spas.  They were trying to figure out exactly what income class would be best to target.

      

7) Numi Tea uses premium ingredients to create a premium tea at an affordable price, according to Jen Mullin. This is a form of ______________________ that the company uses to distinguish their products from those of competitors.

a.  Perceptual mapping

b.  One-to-one marketing

c.  Product differentiation

d.  Market segmentation

ANSWER:

            Product differentiation is a positioning strategy that some firms use to distinguish their products from those of competitors. (Lamb, 2013)  By using premium ingredients and an affordable price they are distinguishing their product from other consumers who make similar products.  Whether by using better ingredients as those who sell tea at a certain price, or offering there product at a cheaper price than those who use the same ingredient’s.  Either way it has helped distinguish them from others.

      

8) Which of the following is the least likely targeting strategy that Numi Tea would select to market their products?

a. Undifferentiated targeting

b. Concentrated targeting

c. Multisegment targeting

d. Niche targeting

ANSWER:

            Undifferentiated targeting is a marketing approach that views the market a one big market with no individual segments and thus uses a single marketing mix. (Lamb, 2013)  This would be the least likely targeting strategy that they would use because they know exactly what group they are targeting.  If they were to use this strategy they would be wasting money and time on consumers who they have already decided that don’t use their product.

9) When Jen Mullin explains that her company seeks to include their product in gift bags and other promotional giveaways by companies and other organizations, she is recognizing the need to change customers’ perceptions through sampling.

a. True

b. False

ANSWER:

            By placing their products in gift bags and other promotional giveaways its helping get their name out there to new potential customers.  By allowing people to sample their products it will help people to change how they view organic foods and teas.  Most people don’t want to waste their money on new products in fear that they won’t like it.  People are usually willing to try stuff when it’s free and if they were to like it, it would intern change how they view the product.

10) To graphically map the “channel conflict” between marketing Numi Tea to premium spas, hotels, and restaurants and selling the same brand at mass market stores such as Target, the company could employ perceptual mapping.

a. True

b. False

ANSWER:

            Using perceptual mapping means displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customer’s minds. (Lamb, 2013)  This would allow them to figure out how different classes of people view their products and what they are willing to spend on their products.

References

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

Numi Organic Tea

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: Numi Organic Tea clearly describes a customer that is a female college student that drinks tea.  She loves organic and is predominately a green tea drinker.  She purchases at least 2 to 3 boxes a month. In this description, you can say that Numi Organic Tea uses Demographic segmentation.  “Some common bases of Demographic segmentation are age, gender, income and family lifestyle” ( Lamb et al., 2014).  Numi searches for a particular woman and she is in college.  Through research and the studying of demographics, it helps the Numi marketing team figure out whom to target.  Demographic information is widely available and often related to consumers buying and consuming behavior (Lamb et al.,2014).  This allows the team to be aware of whom is purchasing what and how often.  Also, the information allows them to target the areas or place that these particular consumers buy.  For instance, if demographic information tells me that a woman in her late 20’s that attends school buys tea often, then I know that a target area could be a college campus.  Research can go a long way.  You study and learn your consumers so that you can better serve them and become successful. Without research you have no direction and wouldn’t know which way to go or what the consumer wants.  You have to know schedules, what consumers like and dislike.  Age matters because different age groups prefer different things.  Age also plays a role in income, knowing whether or not the consumer will have enough funds to purchase your product.  All this information is helpful.

2. What is Numi's principle marketing plan? In what way does Numi's marketing team use what they know about their target demographic to implement their marketing plan?

ANSWER:  Numi’s marketing plan consists of targeting their consumers in places or areas that they know their consumers will be.  Numi uses samples believing that the actually taste of the tea will sell the product.  They have samplings in places like the grocery store, colleges and spas.  They know that a young woman has to go grocery shopping and being able to sample a tea while shopping may lead the sampler to buy the product.  “Lifestyles segmentation divides people into groups according to the way they spend their time, the importance of the things around them, their beliefs and socioeconomic characteristics such as income and education” (Lamb et al.,2014).   A lot of the time, even if the product has not been heard of, consumers still are curious, wanting to try the product.  Spas are basically being places of relaxation and this organic tea represents a sense of relaxation.  Their targeted consumer wants new and organic.  They join in a greater cause such as the cancer walk and send out free samples of tea to those consumers that are interested in the same causes.  I agree with the saying if you treat me good, you will get that in return.  Building a relationship with your consumers let the consumer know that you actually care about their wants and interests and not just in it for the money.  Numi team donate for free but also pay for some sampling, as well.  So, there are many ways that Numi’s marketing team use what they know about their target demographic to implement their marketing plan.

Defend Your Answer Challenge: Highlight your multiple choice answer in yellow. Write a 100 (or more) word discussion in defense of your answer to the multiple choice and true/false questions using research from your textbook to help substantiate your understanding of segmentation, target marketing, and positioning. Apply APA style referencing in your writing.  

3) Jen Mullin, the vice president of Marketing for Numi Organic Tea, describes their typical customer as a female, college-educated tea lover, possibly an “eco-mom.” What type of market segmentation has she used to identify this customer group?

a. Geographic segmentation

b. Demographic segmentation

c. Ethnic segmentation

d. Psychographic segmentation     

ANSWER:  Jen Mullin defiantly uses Demographic segmentation.  She is considering gender, age and lifestyle.  She has studied this target and has learned the consumers buying and consuming habits.  Demographics include a wide range of information in detail that is very helpful to Numi’s marketing team.  Just the woman’s age can tell Numi’s team many things such as a considerable income for this woman, or if she may have kids or not and many other things.  This woman’s lifestyle is important and knowing if she has a child or not could be very helpful, as well.  Normally woman that has had children are struggling with weight loss and often tea can be good for many especially if they are substituted soda with tea.

4) Another way Numi Organic Tea identifies potential customers is through what they want from the product; they are looking for organic, fair-trade, premium quality tea, according to the video. What type of market segmentation is used to identify customers in this way?

a. Geographic segmentation

b. Demographic segmentation

c. Benefit segmentation

d. Usage-rate segmentation

ANSWER: “Benefit segmentation is different because it groups potential customers on their needs and wants rather than other characteristics such as age or gender” (Lamb et al.,2014).  Benefit segmentation is about caring about your customers.  For example, the tea could be divided in to Benefit segments such as Soothing & Relaxation, Sliming tea, Energy Tea and more.  You have to be unique as well as the consumers can all be different and have different wants and needs.  If the consumer is feeling great about their purchase, then they will come back.  Customer satisfaction is a key to having regular customers.  Numi’s marketing team go an extra mile and it works.

5) Because Numi Organic Tea has identified more than one target market, for example, “eco-moms,” college students, and family travelers, they should be particularly aware of the ____________________, which helps explain how consumption patterns differ at different stages determined by a combination of age, marital status, and the presence or absence of children.

a. Family life cycle

b. 80/20 principle

c. Undifferentiated targeting strategy

d. Concentrated targeting strategy

ANSWER:  The family life cycle can include many areas.  It can inform you if a woman is single, in college or with child.  It will help target their needs and wants and even what they can afford.  It will help to narrow down how they go about their day.  You can figure out when and how often they spend.  The smallest detail can lead to a whole lot of other questions being answered.  Tea could fit into these consumer’s lifestyles for many different reasons, as everyone is different.  Numi is a premium quality organic tea which can be appealing to a tea lover who seeks quality and can afford it. 

6) The demographic variable that Numi Tea marketers were examining when they recognized that people who had discovered their product at a high-end spa or fine restaurant often shopped for groceries at Costco was _________________________.

a. Age

b. Income

c. Ethnicity

d. Gender

ANSWER:  Instead of tea just being demanded from consumers such as a female college student or eco-mom, the tea is moving up in the market.  It’s now being demanded in high-end spa or fine restaurants which could mean more income.  People that have money to waste would not worry about how much they are spending especially if it’s on a high premium organic product.  The more money you got, the more you can spend on things that you like. Numi’s tea is expanded to different and even mass markets.  Different and mass markets produce more income.  They have achieved their targeted market and more.

      

7) Numi Tea uses premium ingredients to create a premium tea at an affordable price, according to Jen Mullin. This is a form of ______________________ that the company uses to distinguish their products from those of competitors.

a.  Perceptual mapping

b.  One-to-one marketing

c.  Product differentiation

d.  Market segmentation

ANSWER: “Product differentiation is a positioning strategy that many firms use to distinguish their products from the competitors” (Lamb et al.,2014). In the marketing industry you have to be unique or different in your own way.  You pretty much have to find out what works best for your product.  Although there are other teas that are produced, they are nothing like Numi Tea.  Numi Tea uses premium ingredients to create a premium tea at an affordable price plus they use organic leaves.  There is not another tea that uses the exact ingredients with a combination of organic leaves such as Numi Tea.  Numi Tea has its own product differentiation from others.

      

8) Which of the following is the least likely targeting strategy that Numi Tea would select to market their products?

a. Undifferentiated targeting

b. Concentrated targeting

c. Multisegment targeting

d. Niche targeting

ANSWER: “Concentrated targeting is a strategy used to select one segment of a market for targeting” (Lamb et al.,2014) which it is clear that Numi Tea targets more than one segment of a market.  Also, the more successful Numi Tea becomes the more their market expands.  This expansion has now opened up major possibilities in the high-end and mass markets.  Numi’s uniqueness has left a great after taste in the mouths of their consumers producing more income and success for Numi’s Tea.  Knowing the right moves to make can be rewarding but making the wrong moves could be costly and concentrated targeting would be not only be the least likely target strategy but the wrong one for Numi to select.

9) When Jen Mullin explains that her company seeks to include their product in gift bags and other promotional giveaways by companies and other organizations, she is recognizing the need to change customers’ perceptions through sampling.

a. True

b. False

ANSWER: I would say that this statement is true because gifts often intrigues the interest of consumers.  I know if I received a gift bag with free samples of Numi Tea and I liked it, it may influence me to buy some.  Promotional giveaways by other companies and organizations shows that Numi Tea is connected to the community and other causes.  Jen Mullin also states that the transition takes place with their tea when the consumer tastes it.  So, gift bags and promotional giveaways are great ways for sampling.  Leaving consumers with a taste of a good thing will bring them back for more.  Yes, perceptions can be changed through sampling.

10) To graphically map the “channel conflict” between marketing Numi Tea to premium spas, hotels, and restaurants and selling the same brand at mass market stores such as Target, the company could employ perceptual mapping.

a. True

b. False

ANSWER:  Perceptual mapping is a means of displaying or graphing, in two or more dimensions, the location of products, brands or groups of products in customer’s minds” (lamb et al.,2014).  They product in the colleges can produce income that differ from the product placed in grocery stores or mass markets such as Target.  As long as Numi can keep everything in order and in control then all channels can be successful.  They may have to sell in bulk at Costco’s and make less nether the less, it is still profit.  Channels may get cross but it can be worked out.

References

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