Mrkt 101 Ch6

segmentation variable

criteria that you use to split people up into segments

4 segment variables

Demographic, Psychographic, Behavioristic, Geographic

Market Density

potential customers in x area

geo demographic

culsters people by zipcodes or neighborhood units based on lifestyle and demographic information 

Comercial Market 

the people who are buying for themselves and for others (ex: products for houses, food, clothing etc) 

Business Market 

selling product or service to other businesses to be resold or used to make other items or services for sale 

Target Market Selection Process

1. identify target market start 2. determine which segmentation variable is used 3. develop market segment profiles 4. evaluate relevent market segments 5. Select specific target markets

undifferentiated target strategy

a single market mix is able to productively target an entire market for a particular product (so not specific market mix) 

when do you use concentrated strat and/or differentiated strat?

when customers have different enough needs to warrant different marketing mixes 

homogenous market

market of people who all want and have the same needs of a product (this is when you use undifferentiated (strat)

heterogenous market

the generic product is wanted, but people want different things from the product. (ex. people want cars, but some want Fords and some want Mercedes for their personal reason) (this is when you use marketing segmentation) 

marketing segmentation

separating a consumer or business market into smaller ‘segments’ so marketers can make a specific mark (done by separating into similar characteristics)

market segment

share similar characteristics and product needs

what are the 5 things needed for market segmentation to work

1. customers need for product must be heterogenous 

2. segments must be identifiable and divisible (a specific characteristic separating them from another segment) 

3. must be able to compare the segments on sales potential, costs, profits 

4. at least one segment should be making the profit back that it took to make the marketing mix 

5. company must be able to reach the segment w the mix 

concentrated strategy

organization directs marketing efforts towards a particular segment using a single marketing mix

differentiated targeting strategy

organization directs its marketing efforts at two or more segments by developing different marketing mixes for each segment (benefit it might get them more sales since its pointed at more customers)

micro marketing

segmenting a market to focus on precise marketing efforts for a specific demographic

Psychographic

what motivates you. personal charcateristics

benefit segmentation

dividing the market by what people want to get out of the product

Variables for segmenting business markets

Geographic location, type of organization, customer size, product use 

market segment profile

Describes the similarities among potential customers within a segment
− Explains the differences among people and organizations

market potential 

maximum volume of sales 

customer forecasting survey 

survey of customers regarding the types and quantities ofd products they intend to buy during a specific period 

Break down approach 

based on a general economic forecast

Build up approach 

The "build up" approach involves starting with individual market segments and aggregating them to estimate total market potential

competitive assessment

A competitive assessment looks at competitors’ strengths and weaknesses and evaluates them against a company’s marketing potential.

sales forecast

The amount of a product a company expects to sell
during a specific period at a specified level of marketing activity
− Businesses use the sales forecast for planning, organizing, implementing,
and controlling activities.
− Overly ambitious sales forecasts can lead to overbuying, overinvestment,
and higher costs that weaken a firm’s strength and position.

common forecast techniques  

executive judgment,
surveys, time series analysis, regression analysis, and market tests

executive judgment

A sales forecasting method based on the
intuition of one or more executives

sales force forecasting survey

survey of firms sales force regarding anticipated sales in their territories for a specified period 

expert forecasting survey

sales forecasts prepared by experts outside the firm by economists management consultants or other 

delphi technique

procedure where experts create initial forecasts submit them to the company for averagung and then refine the forecasts

time series analysis

using sales data to figure out pattern in sales over time

forecasters use 4 types of analysis

trend, cycle, seasonal, random factor

Trend analysis

focus on aggregate sales data over period of time to find general trends (years) 

cycle analysis 

analysis of sales figures in 3 to 5 year period to ascertain whether sales fluctuate in consistent periodic manners

seasonal analysis

analysis of daily weekly monthly sales figures to evaluate the degree to which seasonal factors influence sales 

random factor analysis

attempting to attribute erratic slaes varations to random events 

regression analysis 

predicting sales based on finding a relationship between past sales and one ore more independent variable such as population

market test

making product available to buyers in one way or more test areas and measuring purchase and consumer responses to marketing efforts