Target Market and Marketing Strategy - Assignment Example

Business Assignment: MARKETING STATEGY Table of Contents Abstract 2 Part 1 3 General research 3 Maslow’s Theory of Needs and its Application to Marketing 4 The Consumer Behavior Model (or industrial model) and the Marketing Effort 6 Part 2 8 Application to Product/Services 8 Target Market 9 Competitor Analysis 9  References 11 Abstract The first part of the assignment explains the use of Maslow’s Need Hierarchy and the Consumer Behavior Model in marketing. The two concepts concentrate on how the companies focus on the consumer tastes and preferences and market their products according to that. Maslow’s Need Hierarchy is very important to the companies, as it helps them to design products for customers belonging to each of the five levels. Thus it helps the companies to capture the market as far as possible. Maslow’s need hierarchy also signifies that unless and until the lower level of needs is fulfilled a customer will not go for self-actualization needs. The second part of the assignment elaborates a product overview which is created and the target market is developed with respect to the product. The product is created keeping in mind the market demand of United States (US). The product being washing powder or laundry detergent is highly used in every household of US. The product which is created is named as White Magic and its features are created keeping in mind the other competitor’s detergent features so that it is fit for US market. Lastly a competitor analysis is done to identify the biggest player in the US detergent market. Part 1 General research Maslow’s Theory of Needs Abraham Maslow is known for proposing the Hierarchy of Needs Theory in 1943. Maslow’s theory of needs reflects the basic human requirements and highlights the scale of motivations that results in desired outcomes. The theory explains that the motivation for any action made by any human being is an unfulfilled need. It identifies five primary areas of needs that are experienced by most humans. The five levels are physiological need, safety needs, social needs, esteem needs and lastly the self-actualization needs (Daina, 2007). The levels are defined as the following: 1. Physiological needs are the basic life survival need such as breathing, food, water, sleep etc 2. Safety needs include the physical (security of body), environmental, emotional safety and also security from the external world. 3. Social needs include the association with friends and families and the love and affection expected from them. 4. Esteem needs include two parts which are: Internal esteem needs such as self –respect, confidence, competence, achievement and freedom and external esteem needs such as recognition, power, attention etc (Conner, 2007). Self – actualization needs include the urge to become famous. It includes the need for growth and self- contentment along with the desire of earning more knowledge. Figure 1 : Maslow’s Hierarchy of Needs Source: (Kotler, 2012) Maslow’s Theory of Needs and its Application to Marketing Maslow stated that the human behavior and decision-making are guided by one of the five need levels in his hierarchy that are discussed above. Now applying this theory to the marketing concept it can be implied that consumer targets can reflect a basis of perspectives and the decisions that comes with those perspectives. The main determinant to potential success is the ability to effectively appeal to one the above motivational drivers (Thompson, 2013). When a company is selling a product to a customer they are not only selling the product but also selling the idea and the image of the product to the customer. The companies promise to fulfill one or more needs in the hierarchy. Thus the marketing campaign plays an important role in marketing a product. A marketing campaign in order to be successful should motivate the people who are at lower levels of needs. Knowing consumer taste is the key to a successful company. The product which is designed to fulfill the esteem needs does not motivate the customers whose safety needs are not satisfied (Ian, 2013). Non-essential services can be marketed to those who are in the fifth level of Maslow’s hierarchy because those people are motivated by the increased self-esteem needs. The same marketing campaign will not call to those who are at the first level of Maslow’s hierarchy as they are motivated by the most essential human needs i.e. food, water and other fundamentals of survival. The people who have their basic needs fulfilled can focus on the higher actualization needs. The global market consists of huge diverse consumer group and equally huge diverse leadership base. By understanding the consumers and their tastes, development stages and strategies can be developed that encourage market consumption. By presenting an idea to a consumer about a product/service leads to a scope of strong consumer action. To get the overall performance of product/service at global marketplace, companies need to understand how the product/service has the effect on the leaders. These leaders actually make their decisions on practices which will in turn effect how the rest of the market will function. Once a company understands the potential customer need and what motivates them to buy, the company is just one step nearer to meet the unfulfilled need. After identifying the motivating factors the company concentrates on the sales techniques to each customer. Maslow’s Theory remains the main source for most of the management practices that are used in marketing. The Consumer Behavior Model (or industrial model) and the Marketing Effort The consumer behavior needs to reveal a varying needs system. The understanding of how needs are build upon one another can lend a benefit to human consumption process. Leaders at companies may be more interested in services or products that are higher on the hierarchy of needs and thus will fit into more particular target market. Focusing on the needs of the consumer, the companies develop products/services and make marketing plan to reach the target market. The consumer behavior models are as follows: Model of Consumer Buying: The consumer market is defined as end user market and also called the Business to Consumer markets or B2C markets. The product and services are sold to the consumers for their personal use. The decision making process in consumer markets is different from that of the decision making process of the business and the industrial market. According to Kotler and Armstrong, the basic model of consumer decision making process comprises of three major components i.e. the marketing and other stimuli, the Buyer’s Black Box and the Buyer responses. Marketing and other stimuli: The consumer is confronted with stimuli in the environment. This stimulus is of two kinds: The stimulus which is presented by the marketer through marketing mix The stimulus that is presented by the environment (economic, technological, political, cultural etc.) Buyer’s Black Box: The stimuli that is presented to the consumer by the marketer are dealt with the Buyer’s black Box. The buyer’s black box comprises two sub components, viz., the buyer’s characteristics and the buyer decision process (Wells & Prensky, 1996). The following diagram elaborates the buyer characteristics and the buyer decision process. Figure 2 : Model of Buyer Behavior Source: (Kotler, 2012) Buyer Response: The buyer also response to the product and the brand by either buying it or thinking of buying it (Loudon, 2002). Model of Industrial Buying: The industrial market is defined as a market that buys and transforms or processes and sells for consumer use. It consists of all the organizations that buy goods/services for the uses in the production and supply of other goods /services that are sold to others. They are also called Business to Business markets or B2B markets. The buying decision is very formal and complex. The buyer and the seller work very closely and try to build alliances and partnerships. Part 2 Application to Product/Services In this section, a new product brand of washing powder is described and its application to the target market (US market) as well as its strategic marketing plan along with its competitor analysis is elaborated. Washing powder or laundry detergent is a type of cleaning agent that is used by every household at every parts of the world. In US the use of laundry detergent is very high. Keeping that in mind a laundry detergent which is household friendly is created and named as “White Magic”. The features of White Magic are the following: Convenient to use and reasonable price ($ 10 for 50 centime (ct)). Washing at normal temperature (both hand and machine wash). Water saving and also time saving. Removes stubborn strains. Protect Colors and leaves a fresh smell even after the cloth is dry. Target Market Laundry is a time-consuming process and in US about 76% of the mass who are women carryout the primary responsibility of washing the clothes and the remaining 24% are the male who carries out this responsibility. There are around 114,991,725 households in US among which 8739371 are women who carry out the responsibility of washing clothes at home (American FactFinder, 2011). So the main marketing plan of White Magic is targeted towards the female section of the society. They not only judge the purpose of the detergent but also looks at the price of the detergent while buying it. During the period January 2009- August 2012, the income for a household in US rose by 0.2% but the price of the products also rose by 9.1 % which reduced the purchasing power of the US households by 8.2% (Coy, 2012). Competitor Analysis The main competitor of White magic in US is Tide Pods (a new brand of detergent) which is introduced in 2012 and is manufactured by Procter and Gamble. Tide Pods might be a strong competitor for White Magic since the product has similar functions. Tide Pods is assumed to have captured the rest of the detergent industry in US with an annual sale of $500 million during 2012-2013. Another competitor of White Magic is Fairbank’s Gold Dust washing products which is manufactured by Nathaniel Kellogg Fairbank Soap Manufacturing Company. It has captured the market quickly by its low price. The detergent market in US is quite developed with respect to the households and concentrates on exports also. The global detergent industry has been forecasted to reach revenue of $85 billion in 2017. The reason which is driving the forecasted figure is the mounting standard of living of the population of US and the growing purchasing power and disposable income of the US population (Wood, 2011). In this market, White Magic fits in with a good position because it is designed in favor of use and affordability of the US households.  References American FactFinder, (2011). American Community Survey. US Census Bureau. Retrievd from http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_11_1YR_DP02&prodType=table Conner, D. (2007). Maslow’s revisited. Journal of Management Education. Retrieved from http://web.lemoyne.edu/~oconnor/page6/assets/JME-maslow-final.pdf Coy, P. (2012). US Household’s Buying Power Shrank. Bloomsberg BusinessWeek. Retrieved from http://www.businessweek.com/articles/2012-10-11/u-dot-s-dot-households-buying-power-shrank Diana, I. (2007). Hierarchy Concepts in Marketing. Global Development Group. Retrieved from http://mygdg.org/hierarchyconcepts.html. Ian, W. (2013). The influence of Maslow’s humanistic views on an employee’s motivation. Journal of Applied Management and Entrepreneurship. Retreived from http://www.questia.com/library/1P3-1560944381/the-influence-of-maslow-s-humanistic-views-on-an-employee-s Kotler, P. (2012). Marketing management. India : Prentice-Hall Loudon, L. (2002). Consumer behavior, 4th ed. New Delhi :Tata McGraw-Hill. Thompson, M. (2013). Use of Maslow’s Need Hierarchy in Marketing. Willsbros Group. Retrieved from http://smallbusiness.chron.com/description-marketers-can-use-maslows-hierarchy-needs-39333.html. Wells W.D., & Prensky, D. (1996). Consumer behavior. New Jersey: John Wiley & sons, Inc. Wood, L. (2011). Research and Markets: Global Laundry Care Products Industry 2012-2017: Trend, Profit, and Forecast Analysis. Yahoo Finance. 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