VALS Marketers use VALS to understand why consumers make the choices they do. The more marketers know about the target, the better they can design messages that resonate with the target. By using VALS to understand the motivations that stimulate consumer behavior (such as buying a product or participating in a loyalty program), marketers increase their chance of cutting through today's advertising clutter. VALS - short for values and lifestyles - is a way of viewing people on the basis of their attitudes, needs, wants, beliefs, and demographics. Descriptions of the VALS types: Innovators Thinkers Achievers Experiencers Believers Strivers Makers Survivors VALS™ is a marketing and consulting tool that helps businesses worldwide develop and execute more effective strategies. The system identifies current and future opportunities by segmenting the consumer marketplace on the basis of the personality traits that drive consumer behavior. VALS applies in all phases of the marketing process, from new- product development and entry-stage targeting to communications strategy and advertising.The basic tenet of VALS is that people express their personalities through their behaviors. VALS specifically defines consumer segments on the basis of those personality traits that affect behavior in the marketplace. Rather than looking at what people do and segregating people with like activities, VALS uses psychology to segment people according to their distinct personality traits. The personality traits are the motivation—the cause. Buying behavior becomes the effect—the observable, external behavior prompted by an internal driver. VALS reflects a real-world pattern that explains the relationship between personality traits and consumer behavior. VALS uses psychology to analyze the dynamics underlying consumer preferences and choices. VALS not only distinguishes differences in motivation, it also captures the psychological and material constraints on consumer behavior.VALS is based on current personality research into specific components of social behavior. VALS asserts that people express their personalities through their behaviors. People with different personalities engage in different behaviors or exhibit similar behaviors for different reasons. APPLICATIONS: COMMERCIALISATION: VALS™ facilitates successful product launches and helps avoid costly mistakes. Understanding the needs of different consumer groups guides new product and services development. POSITIONING: VALS identifies which market opportunities are strongest. Relating features and benefits to distinct segment needs clarifies strategies for targeting and expansion. COMMUNICATIONS: VALS shows you how to craft more effective messaging campaigns. Understanding what motivates consumers illuminates how to speak to them in ways that will initiate action. PRIVATE LABELS Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands. Private labels serve many purposes. Exclusivity and Differentiation to retailers. Plugging a need gap -- for instance, Big Bazaar's label DreamLine is aimed at providing shoppers the entire gamut of home improvement solutions under one brand. Retailers are also spurred to launch private labels given the low penetration of most categories in India. Then there is the aspect of supply chain efficiencies. Private labels also help in cutting down on intermediaries Dropping cost Better margins for retailers More customer discounts EXAMPLE: Big Bazaar: DreamLine, Kryo, Pure, Premium Harvest, Tasty Treat, Clean Mate and Care Mate SEGMENTATION Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. Such a group is known as a 'segment'. Think of you r market as an orange, with a series of connected but distrinctive segments, each with their own profile. Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two markets are defined and segmented in the same way. However there are a number of underpinning criteria that assist us with segmentation: Is the segment viable? Can we make a profit from it? Is the segment accessible? How easy is it for us to get into the segment? Is the segment measurable? Can we obtain realistic data to consider its potential? The are many ways that a segment can be considered. For example, the auto market could be segmented by: driver age, engine size, model type, cost, and so on. However the more general bases include: by geography - such as where in the world was the product bought. by psychographics - such as lifestyle or beliefs. by socio-cultural factors - such as class. by demography - such as age, sex, and so on. A company will evaluate each segment based upon potential business success. Opportunities will depend upon factors such as: the potential growth of the segment the state of competitive rivalry within the segment how much profit the segment will deliver how big the segment is how the segment fits with the current direction of the company and its vision. A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and promoted in a certain way. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved. Improved segmentation can lead to significantly improved marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased. Requirements for a successful segment homogeneity within the segment heterogeneity between segments segments are measurable and identifiable segments are accessible and actionable segment is large enough to be profitable These criteria can be summarized by the word DAMAS: D Differential: it must respond differently to a different marketing mix A Actionable: you must have a product for this segment to be accured M Measurable: size and purchasing power can be measured A Accessible: it must be possible to reach it efficiently S Substantial: the segment has to be large and profitable enough The variables used for segmentation include: Geographic variables o region of the world or country, East, West, South, North, Central, coastal, hilly, etc. o country size/country size : Metropolitan Cities, small cities, towns. o Density of Area Urban, Semi-urban, Rural. o climate Hot, Cold, Humid, Rainy. Demographic variables o age o gender Male and Female o sexual orientation o family size o family life cycle o Education Primary, High School, Secondary, College, Universities. o income o occupation o education o socioeconomic status o religion o nationality/race (ethnic marketing) o language Psychographic variables o personality o life style o value o attitude Behavioural variables o benefit sought o product usage rate o brand loyalty o product end use o readiness-to-buy stage o decision making unit o profitability o income status When numerous variables are combined to give an in-depth understanding of a segment, this is referred to as depth segmentation. When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a buyer profile. When the profile is limited to demographic variables it is called a demographic profile (typically shortened to "a demographic"). A statistical technique commonly used in determining a profile is cluster analysis. Target market is, the market segment to which a particular product is marketed. It's often defined by age, gender, geography, and/or socio-economic grouping. Targeting strategy or targeting is the selection of the customers you wish to service. The decisions involved in targeting strategy include: which segments to targeting how many products to offer which products to offer in which segments There are three steps to targeting: market segmentation target choice product positioning Targeting strategy decisions are influenced by: market maturity diversity of buyers' needs and preferences strength of the competition the volume of sales required for profitability Targeting can be selective (eg.: focus strategy, market specialization strategy or niche strategy), or extensive (eg.: full coverage, mass marketing, or product specialization). In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market. Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market. De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market. For many a product is simply the tangible, phsysical entity that they may be buying or selling. You buy a new car and that's the product - simple! Or maybe not. When you buy a car, is the product more complex than you first thought? In order to actively explore the nature of a product further, lets consider it as three different products - the CORE product, the ACTUAL product, and finally the AUGMENTED product. These are known as the 'Three Levels of a Product.' So what is the difference between the three products, or more precisely 'levels?' The CORE product is NOT the tangible, physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you. So with the car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to. Another core benefit is speed since you can travel around relatively quickly. The ACTUAL product is the tangible, physical product. You can get some use out of it. Again with the car example, it is the vehicle that you test drive, buy and then collect. The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacture, and any after-sales service.
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