Question

A young entrepreneur, with limited financial resources, is planning to sell a line of nutritional supplements (pills and powders containing vitamins, protein, fiber, etc.) to consumers through the use of direct marketing. (a) Describe direct marketing in a way that distinguishes it from direct selling and from other forms of retailing. Give an example of a company that primarily practices direct marketing. Then, describe one of the seven consumer needs expected of retailers that is satisfied particularly well by direct marketing. (b) Four types (or categories) of consumer segmentation variables were discussed in the course. Name and describe two of these four types. Then, for each of the two types you describe, give an example of a specific segmentation variable of that type. (c) For each of the two segmentation variables you mentioned in Part (b), describe two of the segments that would be produced by using that variable to divide the consumer market for nutritional supplements. (d) Describe the three targeting strategies covered in the course. Then, use the following two points – (1) the marketing concept and (2) the entrepreneur’s limited financial resources – to recommend one of these three strategies to the entrepreneur. Explain how each of these two points connects to your recommendation.

Answer 1

Answer A1
Direct selling is selling products directly to the consumer with the help of salesman. Direct selling individual sales equal reach to the customers directly and sell their products. Example of direct selling companies Amway ,Herbalife etc .Whereas indirect marketing company uses different promotional techniques such as emails ,online ,Ad Words, flyers etc to reach out to the customers. Example of direct marketing companies are Sauma slim belt.
A2.
The type of consumer need which is well satisfied by direct marketing is transparency. Direct marketing companies are very transparent in the products they sell. They give each detail about the product in the company brochure which enables the customer to take fast decision.
Answer b1.
The four types of of market segmentation variables are-
Demographic, psycho graphic, behavioral and Geographic.
Demographic segmentation- it refers to the statistical data about the people in a group.
Example- Age, gender, income ,location.
Example- companies like Walmart offer their products mainly to cater the people who have lower middle class and medium middle class income.
Psychographic segmentation- it categories the people based on their personality and characteristics. Such as values, attitudes ,interest lifestyles, motivation, priorities etc.
Example companies like BMW and Mercedes focus on the people who have wealthy lifestyle.
Answer c.
For nutritional supplement the segmentation can be divided into psychographic and demographic. Psychographic and demographic combined can be used to to target those people who are living in a particular demography and prefer having Healthy lifestyle.
Answer d.
The 3 Targeting strategies are segmenting, targeting and Positioning.
Segmenting means dividing the market into smaller homogeneous segment. This include the people who are having same type of demographic lifestyles Geographic and behaviour approaches.
Targeting means to select a market to focus on. After the proper segmentation of the market is done it becomes the job of the marketing company to target anyone market. The factors which may include while targeting is the size of the market ,competition level etc
Positioning means how the company wants the target market to think of its brand of the product. Some companies make quality key positioning strategy and some companies make the price the key positioning strategy. It all depends upon the features of the market such as other brand presence.

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