MKT 571 Week 4 New Product Launch II
New Product Launch II
Henry Ford’s famous line, “any color you want, as long as it is black” no longer fits the current hypercompetitive marketplace. The launch of the Model T and the development of the assembly line allowed Ford to make such assertion on the market because products were more price focused, and there were fewer competitors. Nowadays, with technology and customer (value-based) branding, buyers have numerous choices for every commerce or merchandise. Instead of the homogenous mass production, there is a movement towards differentiation through customization and market segmentation. Therefore, ZENN Motors Inc., and all other organizations must consider the four P’s of marketing (product, place, price, and promotion) when launching a new product or in company positioning.
Segmentation divides the consumers into well-defined portions, and then re-groups customers who share similar needs and wants; typically into geographic, demographic, psychographic, and behavioral sectors. The geographic segment divides consumers into topographical areas such as regions, countries, neighborhoods, and etcetera. A demographic market splits variables by “age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class” (Kotler & Keller, 2012, p.216). Psychographic segments interpret how lifestyle (personality, attitudes, values, and personal interest) changes affect the global market. Finally, the behavioral segment seeks to increase brand loyalty and the purchase experience for return sales; identifies needs (usage), roles and commitment status. Companies utilize different tools and research methods to find the “best fit” marketing strategy and tactical plan.
Table 1 depicts the Consumer Price Index (CPI) for Canada; which list price changes in major items for the urban and clerical groups within a metropolitan area. A 12-month change shows an increase in all major components like food, shelter, energy, transportation, etc. Transportation increased by 1.3% percent in July 2014 to a total of 133.1 million; gasoline prices also increased by 2.1%. “Transportation costs rose 1.2% on a year-over-year basis in August. The purchase of passenger vehicles index advanced 2.9% in the 12 months to August” (Statistics Canada, 2014). The Survey of Household Spending (SHS) collects detailed information about household members, includes expenditures, savings, annual income, demographics, dwellings, and equipment. Corresponding wealth information, as shown in table 2 and table 3, lists a breakdown of household expenditures and wages. The current 2012 survey correlated the CPI findings, by stating that Canadian households spending increased from previous years for goods and services; where,
“Spending on shelter accounted for the largest share of this total at 28.1%, followed by transportation (19.9%) and food (13.8%). Households in rural areas reported higher average transportation costs ($12,725) compared with those in population centres (spending between $9,530 and $11,997, depending on population size)” (Statistics Canada, 2014).