Bentley College Marketing- Honors

This blog is for MK 402-H01 and the greater Bentley College population.

Monday, March 20, 2006

Tier Today, Gone Tomorrow: Navigating the aftermath of the customer revolution

The author believes that it is incredibly important for marketers to review some basic strategies and concepts in marketing. In order to help his readers do so, he began the week with a Back to Basics lesson:
The basic 101 lesson:
"Traditionally consumers' tastes and behavior were somewhat layered, tiered. Those with disposable income spent it on products that matched their buying power and budgets.”

The strategic 600 lesson:
"Indeed those tiering mechanisms alone are no longer sufficient to influence the purchasing decision. If customers care, they are willing to pay; if not, they will choose the cheapest available product, bragging about the bargain they hunted at, say, eBay, or on the internet in general. Sales decisions have become extremely bi-polar as well: very emotional, impulsive or very rational."

The author of this blog goes on to relate these lessons to a story he was told early in his career. There was a direct-marketing company that came out with a line of high-quality pots and pans, which they sold at a high price. They targeted the high-income tier that typically alligned themselves with expensive high-quality products. However, this company failed to recognize that their target audience mainly found the product to be a mere fashion accessory. Those who actually valued the quality of the product were the poor, working-class immigrants who cooked everyday. They author offers the following moral of the story:To sum up, product tiering is a smart strategy, if you are smart about how the customer is tiering your type of products.

This story is marketing-related because it reminds marketers that they need to be smarter about the manners in which they choose to both position a product and target an audience. Tiering is an excellent concept, but our fast-changing society makes the concept far more complex than it was before. The assumption that they upper-classes will be lured by high prices and high quality no longer stands. It is important to constantly reevaluate values that each target market has. It seems that they are forever changing.

This story informs marketing because it educates marketers as to how to effectively use a particular marketing strategy. Again, tiering can be a very good strategy, but only if it is used correctly. Marketing research is a must in this type of situation. Otherwise, you may find yourself pouring millions of dollars into pushing a product to a group that just isn’t interested in its features.

This improved my understanding of marketing in a very eye-opening way. At Bentley we are constantly preached to about the importance of marketing research. Seeing this lesson being applied to a situation which I could face one day was incredibly interesting. There is no point in placing emphasis on designing a particular feature of a product if that feature does not effect the decision of the target audience. This is where product design meets positioning meets promotion.

Again, the only real critique I have for this piece is that there are not enough examples. Although I found this particular example to be interesting, it would be helpful to see this lesson being applied in a few other instances. Overall, I found the piece to be very insightful.


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