Marketing Assignment Help Online:: Vals segmentation For consumers / product life cycle & promotion mix

Marketing Assignment Help Online:: Vals segmentation For consumers / product life cycle & promotion mix

VALS Segmentation is to be used. Following are the categories and how they are associated with the tea shop going population.??

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These consumers have the highest incomes, are on the leading edge of change, possess abundant resources, have high self esteem, and can indulge in any form of self pampering. They express and radiate individuality and fine character located within.


The high income group of consumers who are motivated by their beliefs and ideals. They are mature, responsible, well-educated professionals. They are practical consumers and rational decision makers.


The low resource group, driven by ideals. They are predictable and conservative consumers. Their life is centered on their families and nations. They have modest incomes.


The high-resource group of those who are motivated by achievement. They are successful work-oriented people who get their satisfaction from their jobs and families. They respect authority and the status quo. They favor established products and services that show off their success to their peers.


 These consumers are the low-resource group of those who are motivated by achievements. They have values very similar to achievers but have fewer economic, social, and psychological resources. Style is extremely important to them as they strive to emulate people they admire.


The high-resource group, people who shine by self-expression. The consumers are the youngest of all, with median age of 25. They are energetic and enthusiastic people, indulging in a variety of sports and outdoor activities. They are heavy spenders as well.


The low resource group, who value self-sufficiency. They focus on their families, work and other recreational activities. They appreciate functional and practical products.


 These consumers belong to the lowest income groups. They have very few resources. They are also the elderly of all, with a median age of 61. They are the brand loyal category.


Following are the groups of people whom we will be targeting amidst the Demographics and Behavioural segmentation.

Age group – above 20

Urban college Youth, Belonging to well-off families – Get together, snack treats

This includes all the college going crowd – both male and female, who are outgoing and used to having coffee and tea in cafes. They are generally from premium colleges and institutes who are from well-off families and do not mind sitting in a cafe for a casual conversation with friends.

College Students, Belonging to middle class families – Tea Talks, friends’ pastime

This includes all students who are from middle class families, who once in a week like going out to a cafe for a cup of coffee or tea with friends. They look forward to these get-togethers and like having snacks with tea or coffee. They might not be too brand-conscious but they certainly represent a significant part of the population who has beverages like tea outside home.

Young and Middle aged Working Professionals – Informal Meetings, Snacks Joint

These represent a very promising and ever growing target segment for something like tea cafe. They are earning and do not mind spending provided they have nice time. After hectic schedule, they like to refresh themselves by hanging around these places with friends and families. They also have informal meetings with colleagues at these places.

Old Aged Non-Working People – Get Together

They represent a very steady part of cafe going population. This group includes old aged people who are generally retired or not active in business or work. They seek a place where they can find comfort, pleasant ambience and good tea/coffee. They are generally from well-to-do families and do not mind paying premium for the brand


Product is not simply the tangible, physical entity that they may be buying or selling. The nature of a product consists of the CORE product, the ACTUAL product, and finally the AUGMENTED product. These are known as the ‘Three Levels of a Product.’

 The CORE product is the BENEFIT of the product that makes it valuable to you. Therefore, 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 consists of lots of added value, for which you may or may not pay a premium. Therefore, 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.

 The Product Life Cycle (PLC)

The Product Life Cycle (PLC) is based upon the biological life cycle. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.

 Strategies for the differing stages of the Product Life Cycle.

Introduction: The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.

Growth: Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.

Maturity: Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media.

Decline: At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.


Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organisation. Pricing should take into account the following factors:

  • Fixed and variable costs.
  • Competition
  • Company objectives
  • Proposed positioning strategies.
  • Target group and willingness to pay.

 Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies.

Premium Pricing: Use a high price where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.

Penetration Pricing: The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV.

Economy Pricing: This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

Price Skimming: Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented.

 Other important approaches to pricing are:

Psychological Pricing: This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For example ‘price point perspective’ 99 cents not one dollar at Dollar Store.

Product Line Pricing: Where there is a range of product or services the pricing reflect the benefits of parts of the range.

Optional Product Pricing: Companies will attempt to increase the amount customer spend once they start to buy. Optional ‘extras’ increase the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other.

Captive Product Pricing: Where products have complements, companies will charge a premium price where the consumer is captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor.

Product Bundle Pricing: Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using the bundle approach.

Promotional Pricing: Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free).

Geographical Pricing: Geographical pricing is evident where there are variations in price in different parts of the world. For example rarity value, or where shipping costs increase price.

Value Pricing: This approach is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales e.g. value meals at McDonalds.


Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.

 Distribution Methods

Indirect Distribution: It involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.

Direct Distribution: It involves distributing direct from a manufacturer to the consumer For example Dell Computers providing directly to its target customers.

The advantage of direct distribution is that it gives a manufacturer complete control over their product.

Indirect Distribution                                               Direct Distribution


Distribution Strategies

Depending on the type of product being distributed there are three common distribution strategies available:

1)     Intensive distribution: Used commonly to distribute low priced or impulse purchase products e.g. chocolates, soft drinks.

2)     Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.

3)     Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.

 Types of Channel Intermediaries

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others.

  1. Wholesalers
  • They break down ‘bulk’ into smaller packages for resale by a retailer.
  • They buy from producers and resell to retailers. They take ownership or ‘title’ to goods whereas agents do not (see below).
  • They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.
  • Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.
  • A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.
  1. Agents
  • Agents are mainly used in international markets.
  • An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. However, a ‘stockist agent’ will hold consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs).
  • Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate.

  1. Retailers
  • Retailers will have a much stronger personal relationship with the consumer.
  • The retailer will hold several other brands and products. A consumer will expect to be exposed to many products.
  • Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.
  • Products and services are promoted and merchandised by the retailer.
  • The retailer will give the final selling price to the product.
  • Retailers often have a strong ‘brand’ themselves e.g. Wall-Mart in the USA.
  1. Internet
  • The Internet has a geographically disperse market.
  • The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery.
  • There are low barriers low barriers to entry as set up costs are low.
  • Use e-commerce technology (for payment, shopping software, etc)
  • There is a paradigm shift in commerce and consumption which benefits distribution via the Internet


Promotion mix is the communication mix, which deals with the personal and impersonal persuasive communication about the product or service of the manufacturer. Personal communication is the face to face meeting between the sales force of the company and the clientele. Impersonal communications include advertising, sales promotion and public relations.

 The elements of the promotions mix are:

1)     Personal Selling: Personal Selling is an effective way to manage personal customer relationships. The sales person acts on behalf of the organization. They tend to be well trained in the approaches and techniques of personal selling. However, sales people are very expensive and should only be used where there is a genuine return on investment. For example, salesmen are often used to sell cars or home improvements where the margin is high.

2)     Sales Promotion: Sales promotion tend to be thought of as being all promotions apart from advertising, personal selling, and public relations. For example the BOGOF promotion, or Buy One Get One Free. Others include couponing, money-off promotions, competitions, free accessories (such as free blades with a new razor), introductory offers (such as buy digital TV and get free installation), and so on. Each sales promotion should be carefully costed and compared with the next best alternative.

3)     Public Relations: Public Relations is defined as ‘the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics’ (Institute of Public Relations). It is relatively cheap, but certainly not cheap. Successful strategies tend to be long-term and plan for all eventualities. All airlines exploit PR; just watch what happens when there is a disaster. The pre-planned PR machine clicks in very quickly with a very effective rehearsed plan.

4)     Direct Mail: Direct mail is very highly focussed upon targeting consumers based upon a database. As with all marketing, the potential consumer is ‘defined’ based upon a series of attributes and similarities. Creative agencies work with marketers to design a highly focussed communication in the form of a mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For example, if you were marketing medical text books, you would use a database of doctors’ surgeries as the basis of your mail shot.

5)     Trade Fairs and Exhibitions: Such approaches are very good for making new contacts and renewing old ones. Companies will seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They offer the opportunity for companies to meet with both the trade and the consumer. Expo has recently finished on Diwali, despite a recent decline in interest in such events.

6)     Advertising: Advertising is a ‘paid for’ communication. It is used to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. There are many advertising ‘media’ such as newspapers (local, national, free, trade), magazines and journals, television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus sides).

7)     Sponsorship: Sponsorship is where an organization pays to be associated with a particular event, cause or image. Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the event are then associated with the sponsoring organization.

 Communication Model

 The message from the marketer follows the ‘communications process’. The message is decoded and the target consumer interprets the message (Receiver). He or she might visit a dealership or seek further information from a web site (Response). The consumer might buy, express an interest, or dislike (Feedback). This information will inform future elements of an integrated promotional campaign. Perhaps a direct mail campaign would push the consumer to the point of purchase. Noise represents the thousands of marketing communications that a consumer is exposed to everyday, all competing for attention.

 Message and Media Strategy

Message: An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience? How will you deliver that message? Will it be through the appropriate use of branding? Logos or slogan design? The message should reinforce the benefit of the product and should help the company in developing the positioning strategy of the product.

Media Strategy: It refers to how the organisation is going to deliver their message. What aspects of the promotional mix will the company use to deliver their message strategy. Where will they promote? Clearly the company must take into account the readership and general behaviour of their target audience before they select their media strategy. What newspapers do their target market read? What TV programmes do they watch? Effective targeting of their media campaign could save the company on valuable financial resources.

Push and Pull Strategy

Push Strategy: Where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product. A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail. The product is pushed onto the retailer, hence the name.

Pull Strategy: Based around the manufacturer promoting their product amongst the target market to create demand. Consumers pull the product through the distribution channel forcing the wholesaler and retailer to stock it, hence the name pull strategy. Organisations tend to use both push and pull strategies to create demand from retailers and consumers.

 Promotion through Product Life Cycle (PLC)

Stages and promotion strategies employed.

 Introduction: When a product is new the organisations objective will be to inform the target audience of its entry. Television, radio, magazine, coupons etc. may be used to push the product through the introduction stage of the lifecycle. Push and Pull Strategies will be used at this crucial stage.

Growth: As the product becomes accepted by the target market the organisation at this stage of the lifecycle the organisation works on the strategy of further increasing brand awareness to encourage loyalty.

Maturity: At this stage with increased competition the organisation, take persuasive tactics to encourage the consumers to purchase their product over their rivals. Any differential advantage will be clearly communicated to the target audience to inform of their benefit over their competitors.

Decline: As the product reaches the decline stage, the organisation will use the strategy of reminding people of the product to slow the inevitable.


People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the ‘individual needs’ of the person consuming it. Most of us think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. Here are some ways in which people add value to an experience, as part of the marketing mix – training, personal selling and customer service.

Training: All customer-facing personnel need to be trained and developed to maintain a high quality of personal service. Training should begin as soon as the individual starts working for an organization during an induction. The induction will involve the person in the organization’s culture for the first time, as well as briefing him or her on day-to-day policies and procedures. At this very early stage, the training needs of the individual are identified. A training and development plan is constructed for the individual, which sets out personal goals that can be linked into future appraisals. In practice most training is either ‘on-the-job’ or ‘off-the-job.’ On-the-job training involves training whilst the job is being performed e.g. training of bar staff. Off-the-job training sees learning taking place at a college, training centre or conference facility. Attention needs to be paid to Continuing Professional Development (CPD) where employees see their professional learning as a lifelong process of training and development.

Personal Selling: There are different kinds of salesperson. There is the product delivery salesperson. His or her main task is to deliver the product, and selling is of less importance e.g. fast food, or mail. The second type is the order taker, and these may be either ‘internal’ or ‘external.’ The internal sales person would take an order by telephone, e-mail or over a counter. The external sales person would be working in the field. In both cases little selling is done. The next sort of sales person is the missionary. Here, as with those missionaries that promote faith, the salesperson builds goodwill with customers with the longer-term aim of generating orders. Again, actually closing the sale is not of great importance at this early stage. The forth type is the technical salesperson, e.g. a technical sales engineer. Their in-depth knowledge supports them as they advise customers on the best purchase for their needs. Finally, there are creative sellers. Creative sellers work to persuade buyers to give them an order. This is tough selling, and tends to o ffer the biggest incentives. The skill is identifying the needs of a customer and persuading them that they need to satisfy their previously unidentified need by giving an order.

Customer Service: Customer services teams support many products, services and experiences. Customer services provided expertise (e.g. on the selection of financial services), technical support (e.g. offering advice on IT and software) and coordinate the customer interface (e.g. controlling service engineers, or communicating with a salesman). The disposition and attitude of such people is vitally important to a company. The way in which a complaint is handled can mean the difference between retaining or losing a customer, or improving or ruining a company’s reputation. Today, customer service can be face-to-face, over the telephone or using the Internet. People tend to buy from people that they like, and so effective customer service is vital. Customer services can add value by offering customers technical support and expertise and advice.


Process is an element of service that sees the customer experiencing an organisation’s offering. It’s best viewed as something that your customer participates in at different points in time. Here are some examples to help your build a picture of marketing process, from the customer’s point of view.

Going on a cruise – from the moment that you arrive at the dockside, you are greeted; your baggage is taken to your room. You have two weeks of services from restaurants and evening entertainment, to casinos and shopping. Finally, you arrive at your destination, and your baggage is delivered to you. This is a highly focused marketing process.

Booking a flight on the Internet – the process begins with you visiting an airline’s website. You enter details of your flights and book them. Your ticket/booking reference arrive by e-mail or post. You catch your flight on time, and arrive refreshed at your destination. This is all part of the marketing process.

At each stage of the process, markets:

  • Deliver value through all elements of the marketing mix. Process, physical evidence and people enhance services.
  • Feedback can be taken and the mix can be altered.
  • Customers are retained, and other serves or products are extended and marked to them.
  • The process itself can be tailored to the needs of different individuals, experiencing a similar service at the same time.

Processes essentially have inputs, throughputs and outputs (or outcomes). Marketing adds value to each of the stages.

Physical Evidence

Physical evidence is the material part of a service. There are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following:

  • Packaging
  • Internet/web pages
  • Paperwork (such as invoices, tickets and despatch notes)
  • Brochures
  • Furnishings
  • Signage (such as those on aircraft and vehicles)
  • Uniforms
  • Business cards
  • The building itself (such as prestigious offices or scenic headquarters)
  • Mailboxes and many others

A sporting event is packed full of physical evidence. Your tickets have your team’s logos printed on them, and players are wearing uniforms. The stadium itself could be impressive and have an electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are comfortable and close to restrooms and store. All you need now is for your team to win!

Some organisations depend heavily upon physical evidence as a means of marketing communications, for example tourism attractions and resorts (e.g. Disney World), parcel and mail services (e.g. UPS trucks), and large banks and insurance companies (e.g. State Bank of India).

 Couple A : Itinerary

Venice Description: Being on water, Venice is an archipelago of 118 islands formed by about 150 canals in a shallow lagoon. A historically rich place, visit Venice for the imposing Gothic, Roman, and Venetian architecture, the coruscating light of the canals and a visit to the superior and artistic glass factories, one of the best in the world. If you happen to visit Venice during a carnival, pick a mask as souvenir for yourself. Book your trip to Venice in advance for cheap holidays and tours to this ancient city. Make your vacations more exciting and go to Murano, to see the best of Venetian glasses being made. Burano, another place close to Venice is famous for its lace making factories. The elaborate lace produced here priceless, wanted across the world. Venice is full of oil and watercolour paintings, often freshly produced by the artist, right in front of your eyes. There are plenty of cost-effective packages available for trips to Venice. Venice is also the ideal place for honeymoon ? imagine a gondola ride on a moonlit night with soft music playing in the background! Travel within Venice is mostly through water boats ? a handy tip is to hire your own motor boat rather than depending on the shared/common ferry.


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