Lecture: Product Lifecycles, Brand segmentation and Consumer Behaviour

Product Lifecycles, Brand Segmentation and Consumer Behaviour

What is consumer behaviour?:

> The study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas of experiences to satisfy needs and desires.

Maslow's Hierarchy of needs:

1. Physiological needs - survival

2. Safety needs- protection from the unpredictable happening in life (e.g. accidents)

3. Social needs - we need social experience and desire products and services that facilitate social exchange.

4. Esteem and status - striving to achieve a high standing in relation to other people.

5. Self-actualisation - The desire for self-fulfilment in achieving whatever someone can.

Diverse and changing markets:

> Most fashion marketers try to attract several market segments at once - e.g. Gap markets to men, women and children

> Consumer buying habits don't remain the same - changes in economic and social conditions can affect the consumer's choices.

Segmenting a market:

> Marketing segmentation is a way of analysing a market by categorising their specific characteristics 

> Specific characteristics include:

- Demographics

- Psychographics

- Geographics 

- Behaviouristic/usage

- Situation 

- Online/offline

- Purchase occasion

Brand positioning statement:

> Brand positioning is defined as the conceptual place you want to own in target consumer's mind - the benefits you want them to think of when they think of your brand. An effective brand positioning strategy will maximise customer relevancy and competitive distinctiveness, in maximising brand value.

> When doing the research to inform a brand positioning project, you must be able to answer the following questions:

1. What does the brand community currently believe about or value in the brand?

2. What might the brand community believe or value about the brand in the future?

3. What does the organisation currently claim about the brand?

4. What would the organisation like the brand to become down the road?

Positioning statement must address 3 key questions:

1. Who are the customers?

2. What is the set of needs that the product / service fulfils?

3. Why is the product / service the best option to satisfy your needs (relative to competition of substitute)

The final step - positioning?:

> How do you want to be seen in the market place?

> What is your key competitive advantage?

> What do you want to highlight?

- Product differentiation - e.g. the Lynx effect will make you more attractive to women

- Service differentiation - e.g. Kia offer a 7 year warranty 

- Personnel differentiation - e.g. Apple geniuses

Product Lifecycle:

Stage one: Introduction:

- The first stage of the fashion cycle is when new styles, colours, textures, and fabrics are introduced.

- The new style may be accepted by a small number of people called fashion leaders.

- Promotional activities include fashion shows and advertising in high fashion magazines.

- Fashions are produced in small quantities at high prices.

- Retail buyers purchase limited numbers to see if style will be accepted.

Stage two: Growth (rise):

- When consumer interest grows and the fashion becomes readily acceptable to consumers.

- Mass production brings down the price of the fashion, which results in more sales.

- Styles are manufactured in less expensive materials and in lower quality construction than the original style.

- Promotional efforts are increase in high fashion magazines to heighten consumer awareness.

- Retail buyers order items in quantity.

Stage three: Maturity (peak):

- A style is at its height of popularity.

- The fashion is demanded by almost everyone because it is now within the price range of most consumers and is mass produced in many variations.

- Each retailer tries to persuade customers that its version of the style is the best.

Stage four : Decline:

- The market is saturated and popularity decreases.

- The fashion is overused and becomes dull and boring.

- As the fashion decreases in popularity, retailers mark down their prices.

- Promotions centre around major clearance or closeout sales of the fashion.

Stage five: Obsolescence (rejection of style):

- The style is rejected, undesirable at any price, is no longer worn, and is no longer produced

- Ends as an accepted fashion.

Extension Strategy:

- Redesigning the product

- Adding an extra feature

- Changing the packaging 

- Providing a unique selling point