Unit 3.1

segmentation

categorizing of customers based on certain characteristics

segmentation examples

• income

• age

• gender

• location

purpose of segmentation

• basis for product development

• targeting customers

• meeting specific needs/wants

target market

the main customers a business aims for

disposable income

how much a person has left after paying taxes, bills & needs

pros of segmentation

• recognizes different needs/wants of groups

• less expensive/wasteful than wider product marketing

• altering of product

• loyalty from specific needs being me

cons of segmentation

• risk of over generalization

• not all segments are mutually exclusive/difficulty in identifying

• requires more detailed research taking more time/costly

• segments may be too small for catering

primary research

gathering information for the first time

• field research, first hand

types of primary research

• observing consumer actions

• surveying first hand via phone, focus groups, door to door

• direct customer feedback

pros of primary research

• tailored to business

• up to date

• deeper insight

cons of primary research

• expensive

• misleading results if general group is incorrectly represented

• longer process

• requires expertise(good questions + avoiding bias)

secondary research

using data that already exists

• desk research, second hand

types of secondary research

• any form of existing documentation

• printed press/magazines

• census/government archives

• internet research

pros of secondary research

• gathered quickly & cheaply with many reliable sources

• info on larger sections of population

• useful starting point

• spotting broader patterns

cons of secondary research

• not tailored to businesses

• out of date with market needs

• varying quality due to wide range of sources

2 types of data

• qualitative(opinions)

• quantitative(#)

market research

process of gathering, analyzing & processing data relevant to marketing decisions

examples of info

• shopping patterns

• frequented locations

• competitor products(price/packaging)

• success of promotions

purpose of market research

measure:

demand

market share

competition

target market

demand

size & growth of market, different segments that exist within the market as a whole

market share

sales of each producer as a percentage of total sales in the market

competition

the number & size of competitors & their share of total market sales

market share

the percentage of sales in a particular market for a specific business

market growth

the percentage growth in the size of the market, measured over a specific period

market size

total volume of a given market

• measured by value/volume of sales