MARKETING INTRO + STP

What is the definition of Market Segmentation?

The process of dividing a market into sub-groups that are internally homogeneous (similar to each other) but externally diverse (different from other groups) to create specific marketing plans.

What are the 4 main categories of variables used to segment B2C customers?

• Socio-demographic (Age, income, gender)

• Geographic (Region, city size)

• Psychographic (Lifestyle, personality - e.g., VALS)

• Behavioral (Usage rate, loyalty, purchase occasion).

• What are the 5 criteria for an effective market segment?

• Measurability (Can we count it?)

• Accessibility (Can we reach it?)

• Homogeneity (Are members similar?)

• Importance (Is it big enough?)

• Duration (Will it last?).

Definition of Positioning

The act of designing the company's offering and image to occupy a distinctive place in the mind of the target market.

When selecting a target segment, what two dimensions should you analyze in the selection matrix?

• Attractiveness of the segment (Is the segment profitable/growing?)

• Compatibility (Does it fit the company's strategies and resources?).

What is a Perceptual Map used for in marketing?

• It is a tool to analyze positioning. It visually plots customer perceptions of your brand versus competitors on specific axes (e.g., Sweetness vs. Alcohol content for beer).

What is the difference between Mathematical and Heuristic segmentation methods?

• Mathematical: Uses statistical algorithms and data (surveys, clusters) to find segments.

• Heuristic: Uses experience and qualitative rules (e.g., "Successive elimination") to define segments logically without complex algorithms.

What is the formal definition of Marketing (AMA 2013)?

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

How is Customer Value calculated?

Customer Value = (Customer Benefits) - (Customer Costs).

• Benefits: Product, Service, Experience, Image.

• Costs: Price, Acquisition, Usage, Maintenance, Recovery.

What is the difference between a Need and a Desire?

• Need: A basic feeling of privation (e.g., Hunger).

• Desire: The specific object to satisfy the need, influenced by culture (e.g., Pizza).

• Note: Marketing influences desires, not needs.

What turns a Desire into Demand?

Economic Affordability. Demand is the number of people who want a product and are in the condition to buy it.

What are the two main phases of the Marketing Process?

• Strategic: Analysis (SWOT), Segmentation, Targeting, Positioning.

• Operational: Programming the Marketing Mix (4 Ps) and Implementation.

List the 5 levels of Market Qualification from broadest to narrowest.

• Potential Market

• Qualified Market (Legal/Technical ability)

• Available Market (Has money + interest)

• Served Market (Targeted by company)

• Penetrated Market (Current customers).

What are three key characteristics of B2B (Business-to-Business) demand?

• Concentrated (fewer customers).

• Derived demand (based on final consumer demand).

• Inelastic in the short term.

What does it mean if Demand Elasticity ($|\epsilon|$) is greater than 1?

The demand is Elastic. A percentage variation in price leads to a higher percentage variation in quantity sold (e.g., a small price drop leads to a huge sales spike).