Principles of Marketing: Marketing Ethics and Social Responsibility - Marketing to Vulnerable Populations, Children Low-Income Groups

What It Is

Marketing to vulnerable populations involves creating products, services, or messages that cater to the needs of groups with limited access to resources, such as children, low-income groups, or people with disabilities. This approach is crucial in marketing as it can lead to increased brand loyalty, positive word-of-mouth, and ultimately, revenue growth. For instance, Coca-Cola's "Share a Coke" campaign targeted young people, a vulnerable population, by personalizing bottles with popular names, resulting in a 7.4% increase in sales.

Key Concepts & Frameworks

• Segmentation: Dividing a market into distinct groups based on characteristics such as age, income, or lifestyle. Example: Target Corporation segmented its market by age, creating a line of clothing and accessories for young girls called "Cat & Jack."
• Target Market: A specific group of consumers that a company aims to serve. Example: Nike targets young, active adults with its "Just Do It" campaign.
• Marketing Mix: A combination of product, price, promotion, and place strategies to reach a target market. Example: Apple's marketing mix for its iPhone includes a premium product, competitive pricing, targeted advertising, and a wide distribution network.
• PESTEL Analysis: A framework for analyzing the external environment, including political, economic, social, technological, environmental, and legal factors. Example: A company analyzing the impact of a new tax on its products would use PESTEL to understand the potential effects.
• AIDA Model: A step-by-step process for creating a marketing campaign, including Attention, Interest, Desire, and Action. Example: A company creating a new product would use AIDA to develop a campaign that grabs attention, generates interest, creates desire, and prompts action.
• SWOT Analysis: A framework for analyzing a company's strengths, weaknesses, opportunities, and threats. Example: A company analyzing its strengths and weaknesses would use SWOT to identify areas for improvement.
• 4Ps/7Ps: A model for analyzing the marketing mix, including product, price, promotion, and place (4Ps), and adding people, process, and physical evidence (3 additional Ps). Example: A company analyzing its marketing mix would use the 4Ps/7Ps to understand the impact of each element.
• CLV (Customer Lifetime Value): A formula for calculating the total value of a customer over their lifetime. Example: A company calculating CLV would use the formula: CLV = (Average Order Value x Purchase Frequency x Customer Retention Rate) / Customer Acquisition Cost.
• ROI (Return on Investment): A formula for calculating the return on investment of a marketing campaign. Example: A company calculating ROI would use the formula: ROI = (Gain - Cost) / Cost.

How to Apply It

• To segment a market, start with geographic, then add psychographic like lifestyle.
• To create a marketing mix, analyze the target market and develop a combination of product, price, promotion, and place strategies.
• To develop a marketing campaign, use the AIDA model to create a step-by-step process for grabbing attention, generating interest, creating desire, and prompting action.
• To analyze a company's strengths and weaknesses, use SWOT to identify areas for improvement.
• To calculate the total value of a customer, use the CLV formula.

Common Mistakes

• Mistake: Assuming that all customers are the same.
• Correction: Segment the market to understand the needs of different groups.
• Mistake: Focusing on the product instead of the customer need.
• Correction: Use the AIDA model to develop a marketing campaign that creates desire and prompts action.
• Mistake: Ignoring the external environment.
• Correction: Use PESTEL to analyze the impact of external factors on the business.

Exam / Interview Tips

• Be prepared to explain the difference between segmentation and targeting.
• Understand the AIDA model and how to apply it to a marketing campaign.
• Be able to calculate CLV and explain its importance.
• Be prepared to discuss the impact of external factors on the business using PESTEL.

Quick Practice

Scenario: A company wants to create a new product for children. What type of segmentation would it use?

A) Geographic B) Demographic C) Psychographic D) Behavioral

Answer: C) Psychographic. Explanation: Psychographic segmentation involves dividing a market based on lifestyle, values, and interests, which is relevant for a product targeting children.

Scenario: A company wants to calculate the ROI of a marketing campaign. What formula would it use?

A) ROI = (Gain - Cost) / Cost B) ROI = (Gain + Cost) / Cost C) ROI = (Gain x Cost) / Cost D) ROI = (Gain - Cost) / Gain

Answer: A) ROI = (Gain - Cost) / Cost. Explanation: The ROI formula calculates the return on investment by subtracting the cost from the gain and dividing by the cost.

Last-Minute Cram Sheet

• Segmentation: Dividing a market into distinct groups based on characteristics.
• Target Market: A specific group of consumers that a company aims to serve.
• Marketing Mix: A combination of product, price, promotion, and place strategies.
• PESTEL Analysis: A framework for analyzing the external environment.
• AIDA Model: A step-by-step process for creating a marketing campaign.
• SWOT Analysis: A framework for analyzing a company's strengths, weaknesses, opportunities, and threats.
• 4Ps/7Ps: A model for analyzing the marketing mix.
• CLV (Customer Lifetime Value): A formula for calculating the total value of a customer over their lifetime.
• ROI (Return on Investment): A formula for calculating the return on investment of a marketing campaign.
• Marketing Myopia: Focusing on the product instead of the customer need.