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0:02
Hello everyone. In uh this lecture, we are going to understand a very important concept related to marketing. Now whether it is digital marketing, these concepts are still valid and they are very important for you to understand because uh if you understand these concepts, it help you in designing your campaign, strategizing your campaign and choosing the relevant audience for the campaign. Now one of the biggest success factor behind any campaign
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is the relevant audience. So if you are able to identify the relevant audience for your campaign u you can see half of the battle is already won. In this lecture we will be understanding how the consumer behavior uh is changing. How consumer behavior gets affected. Uh what are the factors which we need to take care of as a marketeer? Uh how we can do the segmentation of our target audience. how we can identify that which kind of targeting strategy will be relevant for a
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particular set of audience and how we can position our product position our brand in the mindset of the target audience. So stay tuned and we will be discussing these concepts in so much of detail in this session. Now let's understand first of all digital consumers. what what are digital consumers and how their behavior gets affected. So what is a target audience? A target audience is nothing but
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a group of people who you want to reach out to uh for selling of your product or services who might be interested in buying product or services from your company. This group is defined by certain demographics and behavioral attributes which we are going to understand in this lecture.
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Why we need to identify the target customer? It helps in improving the return on investment. ROI means return on investment. So, uh as I previously mentioned, if you are able to identify the relevant audience who are actually interested in buying your product and services, your costing will be less. You will not waste your money and you will be able to get more profits. And when more profits are there then definitely that leads to higher return on investment. It
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provides you the competitive edge against your competition. So maybe your competitors are not doing this properly and if you are able to do it then you are better than your competitors. And lastly it helps you in developing the brand voice. Brand voice is nothing but the way a company uh respond to their customers. A company uh the way a company interact with their customer. So you
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will be able to uh identify and differentiate your brand voice against your competition. For example, Nike all of you must have heard of uh they are into uh athletic uh goods manufacturing. So Nike's target audience is basically uh athletes uh fitness afficionaros and sports enthusiast. The brand often target specific subgroup including women in sports and younger athletes. While the majority of their target audience enjoy professional sports,
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many of them are also big fan of college sports and rising star on the field or court. Another example is from Cisco wherein Cisco is a basically social media marketing uh they used social media marketing approach and that helps them in reaching out to their target audience which are uh tech professionals. Now let's understand what are the factors which influences the consumer behavior. So number one is your personal factors. What comes under the personal factors? Age.
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Age of your customer, income of your customer, occupation they are into, lifestyle they follow. Then second is your psychological factors. So what comes under psychological factors? Motivation of the consu customer or consumer, perception of the consumer about your product, about your brand, learning of the consumer and lastly attitude and belief system they follow.
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Then another factor is social factors. So socially the consumer behavior is defined by the family, family values, reference groups, role and status. Cultural factors include culture, subculture and social class. Lastly, consumer behavior also gets affected by the economic factors. such as personal income, family income, income expectations, consumer credit, liquid assets they have and savings they have in their account. And geographical factors include,
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countries and cities they are living in right now. So we will be looking at these factors one by one in more detail to understand it better with relevant examples.
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Number one characteristic factor uh characteristics that affect the consumer behavior under the cultural factors. So cultural factors include buyer's culture. Buyer mean consumer or customer. So what culture they belong to, what subculture they belong to and what social class they belong to that also affect the consumer behavior. Social factors include reference groups, family, role and status. So what are these? Culture. Now culture is the learned values,
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perceptions, wants and behavior from family and other important institutions. So we you know um very often say that you know this uh this is a western culture or this is a Indian culture right? So because we have uh you know uh specific perceptions we have specific uh value system uh differently in India we have different value system in the uh western uh countries we have the different value system and that's all so together when we have uh different values different
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perceptions so that constitutes the uh culture of particular uh customer subcultures are they are group of people within a culture with shared value system based on common life experiences and situation. For example, Chinese, Indians, Malays, Eurasians. Now if I talk about Indian culture, right? So India, Indian culture and under Indian culture we can have subcultures like um you know
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Gujarati. Gujarati is a subculture. People belongs to Gujarat. They they follow a certain different uh food habits. They they wear different clothing. Right? uh then we can uh we can say uh Tamilians right we can say Malalis or we can say Punjabi right so these are the different subcultures under the Indian culture social class are basically societies permanent and ordered division whose
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members share similar value interest and behavior so social class basically we divide uh we decide uh on the basis of occupation they are into on the basis of income on the basis of education ation on the basis of wealth and other variables. So what are the major social classes comes into play? Uh like upper class, uh middle class, lower class, lower middle class, upper middle class, ultra HNI, HNI. These are the different social classes based on the income they are having.
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Then under the social factors we have groups. Membership groups they have a direct influence and to which a person belong. So these these are groups where you have taken some kind of a membership. So uh when you take membership uh to a group uh so that becomes membership groups. So like we have photographic uh groups, we have uh u journalism groups, we have uh artist groups and likewise then we have aspirational groups. So aspirational groups are groups to which a
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individual wants to belong right. So maybe there is a club in your area, right? And uh in that club only the rich people uh visits, rich people go. So that becomes your aspirational groups you know that tomorrow uh or sometime later I also want to part be part of this group I also want to join this kind of a uh premium club. Reference groups are that form of a comparison or reference in forming attitude or behavior. So they they are kind of an aspirational group but it is like
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um you are use you use it for comparison. So you are part of a certain group and then you compare it with the other group. So that becomes the reference groups. Then under the uh social factors we have opinion leaders. They are people within a reference group with special skills, knowledge, personality or other characteristics that can exert social influence on other. So there we use basically it in buzz marketing uh that enlist opinion leader to spread the word
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uh or maybe social networking. Uh you must have heard of influencer marketing. So influencers are nothing but they are the opinion leaders. They have expertise in a particular domain. They have developed a niche for themselves. Likewise in case of opinion leader you must have heard of u you know if any any personality any renowned personality in a specific field is uh talking about something then people um you know tend to trust that. For example, if it is a sports related
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equipment and Sashin Tendulkar is promoting it, uh then definitely your trust factor will be more because Sashin Tendulkar is a sportsman and uh he is promoting the sports product. So that becomes the opinion leader because Sachin Tendulkar belongs to the uh sports category. Now tomorrow if Sachin Tendulkar is promoting some food item so maybe you may not uh find that kind of a trust uh with that advertisement or that content because you understand that Sashin Chandulkar is not
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into food but he is into uh sports. Then comes social factors. So social factors include family uh which is definitely the most important uh uh you know factor in deciding the consumer buying behavior. Uh then comes social role and status. So what kind of status somebody is enjoying and what role they are playing in the society that also shapes the consumer behavior. Then comes personal factor. Personal factors they are basically the demographical factor that includes age uh their
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life cycle stage like you know whether they are unmarried married uh parents married with two children and like that occupation their economic situation the kind of lifestyle they are enjoying uh the personality and the self-concept they have about themsel psychological factors include motivation how they get motivated what are their perception about something uh how do they learn about brand or product or what are the beliefs and attitude system they follow uh as a person. So
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personal factors include personal characteristics uh which are all the demographical factors which we have just talked about. So such as uh under the age and life cycle stage uh the in order to understand the example Royal Bank of uh Canada they have identified five life stage segment. Youth younger younger than 18 years for the bank account uh getting started 18 to 35 years builders 35 to 50 years accumulators 50 to 60 years and preservers over 60 years. So these are basically
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related to the money which they have in their uh bank account. So getting started means somebody is starting earning uh the lifestyle the income. Builders they are building the wealth right now. Accumulators they are accumulating the wealth now they are not spending it anywhere and preserver uh they are the retired population and they want to preserve whatever life income they have earned so
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that they can live uh peacefully. uh for example uh similar to Nike we can have younger audience uh you know children's students who are getting into sports right now then we have professional athletes those who are absolutely uh into the athletics professionally and then we have uh athletes which are non-professional. So likewise we define the age group for our relevant audience and we identify the life cycle stage of the audience so that accordingly we can design the
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uh advertisement. We can design we can strategize the campaign accordingly. Occupation affects uh the uh basically it impacts uh on the pricing of the product. Uh so uh occupation as well as the economic situation they are into. Economic uh situation include their personal income, the saving uh savings they have maintained and interest rate they are having. Uh every person with different occupation they they uh try try to buy different products. Uh people buy products as
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per the personal income level also. For example, mobile phone category. So if somebody is into uh you know lower income segment they will buy a cheaper mobile phone maybe something from Vivo or something from OPPO but if somebody is having a very high income then definitely they will buy iPhone uh mobile phones. So as per the income we uh we choose the different products and services. Lifestyle it is a pattern of living as expressed by the psychoraphic of the customer. Um so in
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order to measure the lifestyle we look at the activities we look at the interest and opinion of the customer. Uh so that we can understand what kind of lifestyle they follow. For example, luxury lifestyle. Somebody is um you know always go to luxury hotels uh uses a luxury car uses a luxury mobile phone uh wear luxury clothes uh go to you know private luxury destinations for holiday and
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likewise so that defines the lifestyle. Oh, this person has a luxury lifestyle. Right? Personality and self-concept means that refers to the unique psychological characteristics that lead to consistent and lasting response to the consumer's environment. How somebody's personality is right. So personality is a longlasting impact. Somebody is u uh you know outspoken. They they speak uh boldly wherever they are. uh some of them are introverts. So that is a personality you know I
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have a introvert personality I have extrovert personality and likewise and that again helps in deciding the behavior of the consumer that what kind of product you are going to choose psychological factors that includes motivation motivation is nothing but it is a motive any any motive should be there behind a need that is sufficiently pressing to direct the person to seek satisfaction. Uh for example, you are uh why do you buy um why why you go to Zumato or Swiggy,
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right? So the motivation was that you are feeling hungry, right? Or maybe you want to pass some time. So that is a motivation. In order to satisfy that motive, you go to Zomato and Swiggy and place some order for buying the food. So motivation research we we conduct uh for the consumer using the qualitative research wherein we conduct the surveys uh from the customer. We take their feedback and then on the basis of that we try to understand what kind of motivations
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uh they have uh for a respective product or service. uh under the psychological factors there is a very important model which was given by Abraham Maslo uh that is a hierarchy of need and that specifically define you know how uh a consumer's decisions move as per the as per the stage of the need they are into. So as a human being uh for every human being the first need is my physiological needs which is related to my body um food water uh clothing right
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that is a physiological need once these needs are fulfilled I I am enough I'm earning enough so that I can eat well I can wear well then I will move to the safety needs wherein you know I I must be having my own house I must be having uh you know safe environment. I must be living in a safe environment. Once that is fulfilled then I will move towards the social need wherein I'm looking
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for love. I'm looking for sense of belonging. So I will try to find more groups uh where I can be part of I I get married so that I can have companion with me. uh once these needs are fulfilled, I have family, I have uh kids, I have friends, I have groups, then we go to the esteem needs wherein I need recognition in the society. when pe I want that people start recognizing me uh that is there for self-esteem and once that is done then the top order uh need hierarchy is the
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selfactualization need wherein when all the needs are fulfilled you just focus on making uh the better version of yourself every day right so that is one of the most important uh model which is used in the marketing uh studies to understand the consumer animal behavior pattern. Psychological factors also include perception. Perception is basically how we see no how we select, how we organize, how we interpret information to form a meaningful picture. So we have
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uh the basic process which is used is selective attention. We we give attention to something which is important for us, right? So maybe you know you are in a market and it is a crowded market you are there to buy shoes. So your focus will go to only those shops where shoes are being displayed in the display. Right? That is the selective attention. Selective distortion you remove all the other
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u you know uh factors which are coming in between you and the uh shoe shop. So whatever shops are coming in between you try to remove those distortions and you just focus on that and selective retention you retain the information. Maybe you have passed by two three shops which are carrying shoes but you did not like them in the display but you keep you still keep them retained in your memory because if if you know you have to come back and you have to refer to
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that again so you will be able to do that. So that is how we form the perception about a product or a service. This is what I have explained. Selective attention is the tendency for people to screen out most of the information to which they are exposed. Selective distortion is the tendency for people to interpret information in a way that will support what they already believe. And selective retention
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is the tendency to remember good points made about a brand they favor and to forget good points about the competing brands. So whenever you know you have you you watch a uh advertisement right. So uh first of all you focus only on that part um which provides you some information about it. Selective distortion you just uh focus on th that information which you want to believe which you already believe right and uh selective retention is you forget the bad point about the product
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uh or the brand and you just focus on the good points about it. Learning is the changes in individual behavior arising from experience and uh occur through uh drive stimulus uh some kind of cues responses or reinforcement. So we keep on learning every day right. So a very small example to understand is when a when a child is there uh and when they when they touch the hot uh you know utensil uh they feel hot and they they uh take away their hand back and then they
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have learned it. Next time they will not touch anything which looks uh which looks similar to that or which is hot. So uh we also keep on learning with respect to products and services. We also keep on learning with respect to different brands which are there in the market and that is how that help us in defining our uh motivation or perception. Then comes beliefs and attitude system which is again part of psychological factors. So belief uh is basically your knowledge,
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your opinion, your faith about some products. So for example, Mama Earth. So, Mama Earth you have a belief that they uh they develop only the nature friendly products right and uh all their products are organic and they don't use any chemical that is your opinion that is your belief that is your knowledge that is your faith in that particular brand. Attitude describes a person's relatively consistent evaluations feelings and tendency toward an object or idea. So um for
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certain products you have a certain attitude u for example uh KFC if if you are a vegetarian uh person you may not want to buy anything from KFC right uh although they are selling the vegetarian burgers and all because you you know that you know most of their items are non-veg uh and you have an attitude towards that brand that the other food items may be contaminated with non-veg. So you will not go to that and instead you will go to a brand which is only
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selling the pure vegetarian food item. Now after understanding the different uh factors which uh contributes towards the consumer behavior, let's understand the buying decision behavior. Right? So those are the factors which help us understand who will be the target audience. Now this metrics will help us understand how a consumer buy right how they how they get motivated how they what kind
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of process they follow for buying any product or service. So uh we divide this into this uh matrix wherein on the x-axis we have uh significant differences between brand and few differences between brand. Right? So there are few products wherein you will find significant differences between brand. Uh for example, if I talk about um Starbucks coffee uh versus local coffee, uh few differences between brands, uh that is a mobile phone category. Generally nearly all the mobile
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phones having the same kind of features. Then high involvement of the consumer or low involvement of the consumer. when there are significant differences between the brand when the brands are very very different from each other and a high involvement is there of the consumer. So that in that that is called as complex buying behavior. The buying behavior is very very complex in that case. If there are very few differences between brands and there is high involvement that is
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called as dissonance reducing buying behavior. If there is a low involvement from the consumer but there is there are significant differences between the brand that is called as variety seeking buying behavior. A consumer who looks for variety there is a low involvement and then few differences between the brands. So that becomes the habitual buying behavior. A consumer is habitual of buying certain brand or certain product. So let's look at these buying behavior one by one.
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Number one is complex buying behavior. It occurs when consumers are highly motivated in purchase and perceive significant differences among brand. Right? So these are motivated. These purchasers are motivated when product is expensive. They they seek luxury. They want to have luxury. Uh the product is risky. The product is purchased infrequently. Product is highly self-expressive. Uh one one another good example of this is real estate right. So when you are going to buy a flat
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uh that is an expensive uh product uh there is a significant differences between the brand. So all the developers they provide different kind of uh services and amenities with the flat. So the consumer will get motivated when there are significant differences um and when they are buying infrequently because flat is something which you don't buy every day right you buy it maybe 10 10 year 20 year 30 year once in that time period. Dissonance reducing
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behavior occur when consumers are highly involved with an expensive infrequent or risky purchase but see little difference among brand. Right? So uh that occurs when the consumer notice certain disadvantage of the product purchase or hear favorable thing about a product not purchased. Uh one such good example is the automobile sector. So under the automobile again this is a infrequent uh buying behavior wherein you don't buy uh car every day right and these are expensive also but
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uh you when you notice certain disadvantage of the product maybe you know after buying the product you find that you know this car is not good this is not giving me good uh performance so that is where you uh get into another purchase so this becomes the dissonance reducing buying behavior
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Habitual buying behavior occur when consumers have low involvement and there is little significant brand difference. And uh lastly is your uh so example of habitual buying is no extensive search for brand information. You don't do lot of search. Uh it is part of your habitual and you just buy that particular product without conducting any further research. Little evaluation of brand characteristics. Passive reception of brand information.
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brand attitude is weak. Uh for example, headphones. So headphone is a product wherein you don't conduct that exhaustive research. It is not that expensive, right? Um and uh there is very low significant difference between the brands. When you talk about different brands of headphones, the difference is not that much. Variety seeking buying behavior occur when consumers have low involvement and there are significant brand differences. Now coming to
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the buyer decision process. So what process a buyer uh you know follow? Uh for example, if you want to buy a product today, let's say you want to buy a laptop. Now uh what kind of process you follow. Number one is need recognition. We'll we'll discuss this one by one. So the five stages in this process is need recognition, information search, evaluation of the alternatives, purchase
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decision and then post-purchase behavior. So let's see need recognition. Need recognition occur when the buyer recognizes a problem or need triggered by internal stimuli or external stimuli. Now what are these? So I'm coming back to my laptop example. Today I want to buy a new laptop. Now what is what is the need? Why do I want to buy a new laptop? Uh now internal stimuli um I'm not satisfied with my current laptop. The performance is lacking right. Uh or maybe uh I just want to
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buy right there is something new product in the market. Uh there is a new laptop with which is supported by AI and I want to buy that. External stimuli could be uh you have enrolled into a program maybe architecture program and that includes very heavy software to be installed and your current uh laptop does not support that right. So in that case that is a stimulus which uh create a need that you need a better laptop you need a new laptop with the better configuration.
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Uh this is one example. Number two, another could be let's say I today I want to go to um a restaurant uh for uh you know having dinner. Now what is a need recognition? Need recognition over here is uh basically the internal stimuli. I am I'm getting bored of uh daily you know home-cooked food and today I need something special right? So that is why I want to go to the restaurant today
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to have dinner. External stimuli could be there is a party right. I have my birthday today. I have Christmas um celebration going on around me and I want to enjoy. So that is the external stimuli that takes me to uh that created this need to go to the restaurant to have uh dinner over there.
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Then after the need is created then what do I do? I will do the information search. So I there I will start uh conducting my research uh what is the strength of the drive uh what is the amount of information you have the ease of obtaining the information the value placed on additional information and the satisfaction from searching. So I'm coming back to my example of laptop. So I had a need that I need a new laptop, a new upgraded laptop. Now I will go to Google and I
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will start searching for the options available for this new laptop. So I will start searching for AI enabled laptop. Uh laptop with heavy configurations, laptop which can support this kind of a software and likewise right. So first one was need which was arised for buying the laptop. then I am conducting the information search. Now under the information search you use your personal sources. You may refer to your family and friends. You speak to your friends
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uh those who are with you in the same class and you ask them hey what kind of laptop you are using? Which brand of laptop you are using? Is it good? Right? So they will give you their opinion. They will give you their suggestions. You will you will use commercial sources which is internet or advertising. So you will go to Google or you will go to YouTube and try to look out for the options.
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Public sources you will uh see mass media if there is any uh newspaper advertisement which you want to refer to or experiential sources handling examining or using the product. Maybe you know for the past 10 years you are comfortable with HP laptop uh and you don't want to change it. uh so you will directly go to SP website and try to find out do they provide uh AI enabled laptops or not
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right so these are all sources of the information while conducting the information search other sources are u when it comes to the personal sources when you are collecting information from your family friends neighbors acquaintances then the role is legitimize or evaluate because you trust these people and You understand that whatever information they are going to provide that is going to be the legit legitimate information commercial source of information which
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could be advertising, salespeople, website, dealers, packaging or display. So this is basically for the information. So you you'll collect lot of information from these places. Public source of information which is mass media, consumer rating, uh internet searches. Uh so again this is for the information purposes. Experiential which is personal handling this is you used for the evaluation. You evaluate whether your decision is right or wrong. Third stage comes. So first
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stage need identification which is based on the stimulus internal or external. Second is uh information search. Now third is evaluation of alternative. So you know after speaking to my family, after speaking to my friends, after visiting Google, after going to different websites, I found out that there are three brands of laptop uh which are providing AI enabled laptops. Uh one is Dell, second is HP and third is Lenovo. So now I will evaluate these alternatives
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whether out of these three which one is better. So again now I I will use some of the internet sources. I will go to some review websites. I will see uh HP versus Dell versus Lenovo, how their performance is. I will look at the u the ratings, the reviews, the comments, the feedback given by the earlier customer and then on the basis of that I will evaluate that out of these three which one I'm going to buy. Then comes purchase decision. So lastly, you know,
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after identifying all of this information, I found out that okay, I'm going ahead with the Lenovo laptop because uh people are talking good about it. Uh it has more features than HP or Dell and it is as uh it is falling under my uh buying capacity also. So I will either I will go to uh e-commerce platform Amazon, Flipkart to get a better deal uh or maybe I go to their website or maybe I go to
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their physical store and buy the uh Lenovo laptop from there. Then comes post-purchase decision. After buying the Lenovo laptop then you will you know again uh look at your expectations and check whether this laptop is fulfilling the expectations or not whether the product's perceived performance is there or not. Whatever information you have collected in the information search uh is the product able to fulfill that part or not. Right? So that comes under the product's
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perceived performance. The larger the gap between the expectation and performance the greater the consumer dissatisfaction. So after buying the product once you started using you found out that no it is not meeting my criteria it is not meeting my requirement. So there's a gap on the internet on various other sources. You found that people are talking lot of good thing about this laptop but this is not fulfilling my requirement. So there you get dissatisfied. So that is
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a customer dissatisfaction and uh there there is another concept related to it and that is called as cognitive dissonance which is the discomfort caused caused by a post purchase conflict. So you now you will be very discomforted about it because you have invested your money you have spent a good amount of money by in buying this product and now you are dissatisfied about it. So customer another post-purchase decision uh it could be satisfaction that was dissatisfaction.
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Now if your expectations are meeting the product performance then you will be a satisfied customer. So satisfied customer leads to repeat purchase. Next time if you want to buy any other laptop you will buy Lenovo laptop. You will give favorable word of mouth. Now you will tell your family and friend members about the performance of this product. You will pay less attention to the competition. Right? You are not bothered what HP or Dell is promoting because you're happy with
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the product. You purchase of other products from the company. So that will be limited. Now you will buy all the product from Lenovo and that increases the customer lifetime value. So customer lifetime value is for the entire duration of the period uh when you are associated with a brand how much uh how many products you have bought. So today I have bought Lenovo laptop. Maybe I'm I'm so happy with
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the product that tomorrow I will buy uh Lenovo desktop. Uh tomorrow I will buy Lenovo keyboard, Lenovo mouse and likewise. So that is increasing the customer lifetime value for Lenovo that though all those parameters which we have discussed they are related to the consumer behavior. uh wherein we have seen the factors which are affecting the consumer behavior like personal factors, psychological factors, social factors and likewise. Now we will see how to select the
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target market. Right? So under the target market selection we follow a model called STP model and STP stands for segmentation which is identifying similar group of customers dividing the market into different groups. Right? Targeting which is uh determining the strategy by which you want to reach out to these different groups and positioning which is uh position your brand in such a way that people are able to relate to your brand and they are easily able to remember your
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brand. So these concepts now we will discuss in more detail. Okay. So let's understand the concept of segmentation first. Now for the segmentation purpose, segmentation as we have understood the basic meaning is uh grouping the customers into different uh buckets or different categories. So number one type of segmentation is geographic segmentation. You want to uh group your customer as per the location they belong to. For example, metro cities, customers
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who are living in metro cities, customers who are living in tier 1 cities, customers who are living in tier 2 cities and likewise. So segmenting the market based on geographic location is a basic uh segmentation method. Uh you just identify the location and then you create your different group of customers. Uh the purpose of this different group will be your targeting strategies will be different, your pricing will be different, your promotion practices will be different for the
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uh different uh segments. Then comes uh demographic segmentation. So we categorize our group of customer as per the age that is whether they are teenagers, whether they are adults or whether they are retired. Then as per the gender, male, female or transgender. Occupation uh which is student whether they are into service sector or they are into household or industrial sector which sector they belong to are they uh belong to large sector small sector or tiny sector. Uh one example
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to understand uh this concept is for example I'm uh promoting beardo. Now, Beardo is a beard uh shaping or beard trimming company and most of their products are uh uh suitable for male, right? So, in that case, I have created two segments for my audiences. My primary customer is male. So, my primary segment will be male who are the end user of this product and my secondary audience will be female because they are the um they are not the end user but they may want to buy the
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product for gifting purposes, right? they want to gift it to their brother, husband, boyfriend or whatever. Likewise in the occup uh as per the occupation. So if I am representing HP laptop, so one of the segment is my student segment. They need basic configuration laptop. Uh and the price of the product will be cheaper. uh then I have the professional segment wherein they they don't mind paying a good amount of money for a laptop but they need uh the uh you know extra features
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in the laptop. So that is how I segment my uh different uh customers as per these parameters. Other demographic segmentation parameters are trade whether they are into wholesale whether they are into retail or whether uh they are into exporter exports as per the income level higher income middle income or lower income. uh for example when I'm coming uh again with the example of uh uh mobile phone. So I have uh if I take an example of Samsung so Samsung fold
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is for the higher income segment uh Samsung basic phone is for the lower income segment and then we have the middle range of the Samsung mobile phones that is for the middle income segment. So as per the income level we also segment our customers as per the family life cycle whether they are young and single whether they are young married and no children whether they are young married and
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youngest children under six so one of the good example is let's say I am promoting uh education uh company um and in that case my target audience are basically students so I can target young single so my ad uh copies my advertisement will be different for young single and my advertisement will be different for young married and no children. Psychographic segmentation. So there we uh use different psychographical parameters such as innovators. These individuals are
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eager to embrace new ideas. They possess strong inclination toward adventure and are enthusiastic about possibility of occasional unpleasant experiences a new product. So innovators are those customers basically those who want to try new every time they are trying to they are looking for trying new ideas. So maybe you know you are coming up with a new technological product uh you have come up with a new phone like nothing right. So innovator segment of customers are those
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who will definitely buy this nothing mobile phone because they always in search of the new ideas or new products or new services. Early adopters these are basically influential figures and uh they they basically you know adopt anything which is new and they are kind of a influencers. So you must have seen some influencers account they provide some reviews about uh different products. So how
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they are able to provide the reviews because they are the early adopters. The moment any product which comes into the market they buy the product and then they start giving the review about that particular product. Early majority. This group has a tendency to consider before deciding to accept a new product. The members have crucial role in validating an invention but they are rarely the
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ones leading it. So they they they evaluate the product when whenever a new product comes into the market they wait for some time. They let other people's to uh buy the product and share their reviews and after getting uh their reviews and feedback they make their decision whether to buy the product or not. late majority. This group is very cautious and embraces new idea only when an invention has gained public trust. So when a new brand is launched they never buy it because it's
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a new brand they don't trust it. Uh when people more people started using it and when more people started talking about the benefit of it then they get into the uh that particular product and then they buy any any such uh product or service. For example, uh when CRED was launched, um these were the customers, they don't get into installing the Cred app because they don't trust uh the new technology that much. But when lot of people have installed CRED and they started
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using it and they started talking you know the benefits of using Cred then they start they have adopted that kind of a product. Lagards. Lagards are individual uh they they have a tendency to focus on the past. They harbor skepticism towards change and advancement. By the time consumer chooses to embrace a product, it is possible that a newer version has already superseded it. Uh one such example is there is a customer who always who was into Android mobile
46:37
phone and now they want to get into a uh iPhone, right? So now they are thinking to buy iPhone 12. By the time they are thinking of buying iPhone 12 already iPhone 16 is there in the market, right? So they are the lagards. They are the they are the late they are the last to join the uh party. Uh another example could be um somebody is buying Windows 3, Intel 3 laptop and in the market right now in Intel 9 already is going on. So right they are they are leg ads when Intel 9
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is going on they're thinking of buying Intel 3. Then comes behavioral segmentation. So this method classifies client into market segment based on their familiarity, disposition and utilization of tangible goods. So one is your buying event. Buyers can be categorized according to their utilization uh habit of a product or service. For example, individuals who engage in air travel may do so either for professional reason or for recreational interest. So as a result one airline
47:48
may position itself as catering specifically to business travelers while another may concentrate on luring holiday makers. So they they target on the behavior of the audience. So there are uh there are people who always uh you know air travel for the business purposes and there are customers who always travel for the holiday purposes. So that's how the airline can differentiate its product and services for uh working professional and for holiday travelers as per the desired
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benefit. So consumer can be classified on the primary benefit they seek in a product. Um so for instance traveler may choose economy class for its affordability while other prefer executive class for its prestige and comfort. That is a benefit I'm looking for right. uh while I'm traveling I'm looking for more comfort. Uh there is another set of segment um they are looking only for the price
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part. User status potential buyer can be divided into frequent user, occasional user or non-user. Frequent users are they they frequently travel through uh airline. Occasional user they once or twice in a year they go through airlines and non-user they have never experienced the airline functionality. So again I will segment my users accordingly. For frequent users I will be talking much on the uh comfort which they can get. Occasional users I can come up with the
49:17
uh lesser price or discount on my price and new users I can motivate them that how you can uh you know travel uh easily and uh you can save your time if you travel through airlines. Then comes the benefit- based segmentation. Number one is the status seeker. So these are the buyers who considered uh concerned with the brand's prestige. Uh for example, Apple. So people who buy Apple, they seek a status in the society, right? Because Apple is considered to be um you know
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any product which is owned by HNI segment, high net worth individual or VIP kind of a people. So these are the people who buy such product just to get the status of that uh audience. The swingers this group tries to be modern and up to date in all activities. So swingers they they buy a very uh attractive uh and new technology right that uh that segregate them into a uh cool looking audience. The conservative these prefer popular brand and successful companies. So they don't
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want to uh they don't want to try right uh and uh they don't want to take risk. They always trust only the uh successful companies and already established brands. The rational man this group seek benefit which are economical provide value uh durable and likewise. So they they evaluate everything. What is the price? What are the benefits I'm getting? uh whe whether the whether it is worthful or not, whether it is valuable or not and then they decide to buy any particular
51:00
product. The innerdirected man they are concerned with self-concept for example sense of humor, independence, honesty etc. uh for example Tata. So there are group of people who believe uh that the whatever actions taken by Mr. Ratan Tata they they were always the country oriented and that is how they always prefer uh Tata products on any other company's uh product. The hiddonist they the main concern of group is related to the sensory benefit. Sensory benefit is related to all the
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senses uh you know taste, touch, feel, see. So they are looking for products which are good to see which are good looking in see uh in watching in viewing. Um they prefer the product which is good for taste they prefer the product which is good for skin right. So like that they they always focus on the sensory related uh benefits. Then comes technographic segmentation. So I can uh segment my customers on the basis of whether they are mobile users, whether they are desktop users,
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whether they use specific apps or whether they use specific software. Need based segment product or service must have a need for specific customer and group and lastly value based economic value of specific customer group on the business. So these are different segmentation you know we can when while we are uh conducting the marketing research so we can identify different segment of our audiences and this these segmentation will help in uh strategizing the marketing campaign uh
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for reaching out to the target audience in an effective manner. So what are the importance of this marketing segmentation? It helps you in better understand your customers. It helps you in running the targeted marketing campaigns which we have discussed in the beginning that help you in improving the return on investment that uh this segmentation helps in improving the customer satisfaction overall because as per the respective uh segment of the audience you can
53:13
design and you can sell the respective products. you can uh efficiently allocate your resources and you this kind of a segmentation will give you the competitive advantage over your competition. Then market expansion opportunities. So with proper segmentation you can identify uh that which loca which location which geographical areas uh your uh products are not available but your your customers
53:40
are available and that gives you an opportunity to reach out to those kind of markets as well.
53:47
Now let's look at some of the examples of what we have discussed so far. So Apple Apple focuses on the lifestyle segmentation since their products are the epidm of paying for the brand name. Uh everyone understand right because um in when you're buying an Apple product you are basically paying that extra price for the branding. It focuses on business professionals, audio files, designers and teenagers. Position their product as a premium, high performance
54:16
and sleek product. Now let's look at the targeting strategies. So segmentation is creating the groups of the customers as per different parameters which we have already seen. Now once we have these different groups available with us, how we can reach out to them? what kind of targeting strategies can be followed for reaching out to these type of customers. Number one is your undifferiated marketing. Undifferiated marketing is also called as mass marketing wherein you you
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don't focus on the segments, right? Instead of segment, you just enter into the market and you reach out to each and everyone uh for promoting your product and services. For example, Coca-Cola. In case of Coca-Cola, it's a cold ring and there is no such segments which are available. Anyone whether it is a student, whether it is a retired, whether it is working professional, whether it is
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high class, whether it is low class, all of them they drink cold drink, right? So in that case I follow the mass marketing in for example Tata Salt. Tata salt follows the mass marketing and likewise you can see other example maybe Nes Cafe Kelloggs or maybe L'Oreal uh Gillette and likewise so there you don't have a specific audience or specific segment to reach out to but you want to reach out to the entire market. Then comes a differentiated marketing uh differentiated
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marketing wherein you follow different approaches uh as per the segment and you reach out to them with different marketing campaign. For example, General Motor aim to cater to various customer segment by producing car that cater to different budget purpose and personalities. Hindustan, Uni Liver and Proctor and Gamble they also come up with different brands of soaps and laundry detergents. Under under Hindustan liver, Uni liver you will find uh uh L'Oreal,
56:13
you will find uh uh Luxe uh soap, you will find Dove soap and likewise and all these products are with different prices, right? So that they they uh they they try to reach out to different market segment with the different kind of a product. Concentrated marketing or niche marketing. This is basically designed for a particular niche of the segment. So it is a strategic approach where a company chooses to target one or a few smaller segment or niche instead of pursuing a
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small share of larger market. For example, Nirma. It began by exclusively targeting the market for lowpriced detergent in rural and semi-urban areas and eventually became one of the India's leading detergent brands. That's how the concentrated marketing uh works. Micro marketing is a approach that involve tailoring product and marketing program for the unique preferences and need of specific individual and location. For example, zapos.com. So, Zapos is a online shoe retailer
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which emphasizing creating value for its target customer through personalized experiences. So, they offer feature like free and fast shipping, easy return and exceptional customer service. Another example of micro marketing is Rolls-Royce. Now Rolls-R they reach out to a specific ultra HNI uh segment of the world and each and every product is highly customized to the requirement and need
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of that particular customer. So they also follow this kind of a micro marketing strategy. Local marketing that involves customizing brand and promotional effort to meet the unique needs and preferences of local customer group. For example, Starbucks. They followed this location- based marketing and they have introduced a store locator service for mobile device. Customer can easily find the nearest Starbucks shop by sending a text message with their zip code and receiving
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a prompt response with up to three nearby store locations. So, it is one of the unique feature which Starbucks is providing. They have given a number. You just text your zip code on that number and they will send you three nearby locations of the Starbucks uh cafe. Individual marketing or you can call it as onetoone marketing or personalized marketing wherein it is a customercentric approach
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that focuses on tailoring product and marketing program to meet the specific need of individual customer. For example, Dell wherein you can configure your custom computers. You go to Dell website and you can configure your computer yourself. What kind of uh memory you require, what kind of RAM you require, what kind of screen size you require. So that can be customized uh automatically. Uh there is a branches hockey uh basically this is a hockey manufacturing
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uh company. They make hockey sticks and based on your individual preferences, you can design your hockey stick. You can choose the wood of the hoke hockey stick and likewise Nike offer the options to personalize sneaker with various colors and custom embroidery Eminem with their photo and personal messages printed on each candy. So these are the personalized kind of uh target marketing which you can uh do. Even Apple also does that. If you want name printed on your Apple uh tablet
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uh you can just go to Apple website and you can customize that Apple tablet with your name. So when that product will come that will be having your personal name uh written on that uh tablet. Now the last concept is related to positioning. So we understood segmentation which is identification or grouping the customers as per different criteria. uh we learned about uh targeting how we can reach out to these different uh segments and now how we can position our product and brand
1:00:14
into the market. So in order to understand uh the positioning let's look at the types of the positioning. One is symbolic positioning. Symbolic positioning is also known as lifestyle positioning. You can figure out uh this kind of a positioning by asking what kind of image you want to project. For example, Malro man. Malro man uh is into cigarette uh making uh and they have positioned themselves as a product which is used by macho man. Uh another another example is thumbs
1:00:50
up. So thumbs up has positioned itself uh that it is for it is not for boys it is for uh it is for men right uh that is why they have used Salman Khan for a quite good number of years as their brand ambassador then comes functional positioning what particular problems your product or service solve and how they make their lives easier. So functional positioning example is Philips. Now you
1:01:17
understand Philips products are uh you know very helpful and they have a range of product which can solve every problem from your household uh kitchen to even your offices. Third is your experiential positioning. What kind of experience you give to your customer? Uh for example uh Taj group of hotels right? So you understand the moment you heard Taj Hotel you you know you you start imagining the experience which you are going to get over there that is how they have positioned
1:01:51
themselves in the market because of the experience they are giving to the customer. Another example is Etihard Airways, right? Etihard Airways. Uh they again provide the best of the experience to the consumers and that is where that kind of positioning has been made by the consumers for that particular brand. So what kind of positioning strategies are used? Product pricing strategy. So
1:02:17
in this you just focus only on the pricing of the product and you try to create a positioning for your product whether it is a luxury product or whether it is a cheaper product. Product positioning strategy. So you choose a quality standard for your goods uh making it uh you know lasting uh product. uh when it is possible to make improvement or modification along the route, you have a robust positioning that offers the quality unique value proposition. You must have heard
1:02:49
of this word uh what is your USP? What is your unique value proposition? It is it does not lie in the ability to create the most distinctive one with the most spectacular language. Competitive positioning entails more than simply observing and improving upon the strategies of other businesses. So you will look at what other uh competitors are doing in your industry and then accordingly you focus on your brand building. Some examples Nike they attempted to position their product as
1:03:19
something available to all by making it seem that athlet athletics can be done by anyone. Coca-Cola they try to position their drink as something that bring happiness and wellbeing. In order to understand the uh positioning of a particular product, we use a tool in marketing and that tool is called as perceptual maps. So let's see what are these perceptual maps. It is nothing but a graphical depiction of relative location of your comp competitors. It is a convenient method
1:03:51
to evaluate firms and which is used in mainly by the marketing research companies. So this is how we plot the perceptual map. There are x-axis and y-axis. So you choose two parameter at a time for um you know putting for plotting the perceptual map for any product or any service. So uh for example um I want to evaluate uh I want to introduce a new product in the uh coffee coffee domain right. So under the coffee domain we know that we already have Nest Cafe, we have Starbucks,
1:04:26
we have cafe coffee day and likewise. So how I do how do I identify my gap in this area? So I will plot the perceptual map on X and Y axis. One of the axis will be price whether price is high or low. And then another one is customized high customization or low customization. Uh now we understand there are vegan category of customers and they prefer you know non-dairy uh milk in their coffee. So let's say on the price high price Starbucks is available and they provide
1:05:02
medium kind of customization and on the lower axis we have cafe coffee day they have a cheaper price but they don't provide any kind of customization so in between there is a gap I can come up with a product which is highly customized you can choose your coffee beans you can choose your milk you can choose even your sugar and I I have priced that product in middle of Starbucks and Nes Cafe. So
1:05:30
that's how this kind of a positioning uh map or perceptual map helped me identify where are the gaps in the uh industry where where I can come up with my new product and what factors I can focus on while building up my new product. What are the advantages of perceptual map? The system is straightforward and userfriendly. This tool is very simple to use. Anyone can use it. It is not complicated. You just have to use X-axis and Y-axis. You have to conduct secondary market
1:06:02
research uh using internet and other uh reports and you can identify where these respective brands are falling. The development process is efficient and rapid. Easily you can develop the perceptual maps. The task can be completed individually in person as a team or remotely as a group.
1:06:23
It offers a comprehensive analysis of your market position in comparison to your competitors. And what are the constants of perceptual map? So the effectiveness of perceptual map relies on choosing approxim appropriate axis label. If you have not identified the correct label uh for the different axis then you are not going to prepare a good perceptual map. The level of granularity is
1:06:48
limited providing a brief overview. The framework primarily accommodate two metrics per firm. At one time, you can only use two metrics. If you want to create uh if you want to use more metric, you have to create multiple uh perceptual maps. Lastly, positioning might be a matter of personal perspective. Sometimes you know personal perspective also comes into play. Maybe you know you personally you think that Starbucks coffee is an expensive coffee but maybe that is
1:07:17
not right. So personal per uh personal perspective or personal bias uh is the part of the perceptual maps. Now let's understand this uh you know positioning part uh or I would say this entire STP model segmentation targeting and positioning model with a very beautiful use case over here. Marriott International they own a number of different hotel chains that target specific consumer group. Now they have developed different uh portfolios of their hotels for different segment of the
1:07:53
customers. Luxury these this segment target the luxury customer and luxury experiences. So under the Marriott International they have the RS Carlton scent rages and JW Marriott. So these hotels are for the luxury experiences and for the luxury consumers. So you can understand the pricing would be high. premium it target younger couple and business consumer. It provides sophisticated and chick hotels. So uh the the hotel they have under this category is Sheraton,
1:08:29
Lee Maridian and Weston. So guys these are different brands of Marriott International only. The parent company is Marriott International and under that they have these different brands for the specific consumers. They have a select group of hotels that target seasoned travelers, provide smart and modern amenities which is courtyard by Marriott, four points by Sheraton, aloft hotels and Moxy hotels for the longer stay people who are uh you know who prefer longer stay uh maybe
1:09:03
somebody who has relocated to some other location or something like that. So that target families with children. Their amenities are designed for longer vacations that mirror the comfort of the home. So they have Marriott executive apartments. They have town town place suits. They have homes and villas by Marriott Bono. Then they have a collection of hotel collection uh group of hotel with target very high-end luxury consumer looking for spacial and unique experience.
1:09:35
uh collection accommodations offer distinctive and luxurious experiences. For example, autograph collection hotels, Marriott International, Tribute Portfolio. These are very very um ultra luxury kind of a properties. Another uh example to understand STP is MAGD. So let's see segmentation. Se Magd has uh segmented their customer on the basis of demographics. Happy meal for children's and value meal for budget conscious consumers. Psychographic segmentation they have used healthy
1:10:12
options for healthconscious individuals and late night hours for convenience seeking consumers. Behavioral they tailored options for regular customers and they have promotions to attract the occasional visitors. What kind of targeting they use? families family-friendly atmosphere with play areas offering happy meals targeting parents and children. Young adults they they have introduced classic burgers to trendy item like wrap and salad which go with the
1:10:43
younger audience. Teens they have affordable items, quick service and place to hang out. And lastly for children they have happy meals, they have toys and they have colorful packaging for these kind of happy meals. How they have positioned themselves? Convenience positioning or you can say experiential positioning, fast service, drive-thru options are available, extended hours are available and position themselves as quick and convenient dining option.
1:11:15
On the basis of affordability, they have value menus, combo meals, and targeting budget conscious consumers. On the basis of variety, they have they have diverse menu from classic burger to salad and even healthier options. And for consistency, they have consistent quality and taste across its global location. So you go to Magdi in every part of the country, every part of the globe, you will find the same taste, you will find the same quality, you will find the same experience.
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