Chapter 5

consumer market

purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make profits or serve an organizational need

business market

individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations

target markets

the specific group (or groups ) tow home a marketing positioning or message is directed within a larger total market

what are the 5 steps in the target market selection process

1) identify the appropriate targeting strategy
2) determine which segmentation variables to use
3) develop market segment profiles
4) evaluate relevant market strategies
5) select specific target markets

identify appropriate targeting strategy

the whopper who have the MOST likelihood of being interested in your product

market segmentation

the process of dividing a total market into groups with relatively similar product needs in order to design a marketing mix that matched those needs

market segment

individuals or groups with one or more similar characteristics that cause them to have similar product needs

heterogenous

means something that has dissimilar entities or elements

what are the conditions for target segmentation to succeed?

-customers' needs in the Toal market must be heterogeneous
-segments must be identifiable and divisible
-marketer must be able to compare the different market segments in terms of sales potential costs and profits
-one segment must have enough profit potential, cost, and profits.
-company must be able to reach the chosen segment with a particular marketing mix

undifferentiated targeting strategy

designs a single market mix and directs it at the entire market for a particular product: effective for homogenous markets (one mix, one market segment)

concentrated targeting strategy

targets multiple market segments using one marketing mix. (one mix, multiple market segments)

differentiated targeting strategy

targets two or more segments by developing a marketing mix for each segment. (multiple marketing mixes each directed at different market segments)

segmentation variables

characteristics of individuals, groups, or organizations used to divide a market into segments.

demographic variables

-age
-gender
-race
-ethnicity
-income
-education

geographic variables

different locations, climates and terrain influence customers needs

market density

the number of potential customers within a unit of land are

psychographic variables

personality characteristics (traits)

behavioristic variables

dividing a market according to consumer behavior toward a product in terms of its usage of that product or product category

values & lifestyles classification

VALS-syndicated research that classifies consumers based on psychological characteristics correlated with purchase behavior & key demographics & psychographics

market potential

the total amount of a product category or market (total market sales) customers will purchase within a specific period

product potential

maximum percentage share of a specific market that an individual firm within a specific industry can expect to capture for a specific product

market potential

limits the size of the company's sales potential (total available sales)

question to ask for competition

-what are their marketing strategies?
-how do we relate them to (SWOT)?

questions for estimates costs

-do we have the resources (and the vehicles) to reach the targets were considering?
-will those resources be effective?

select specific target markets

develop forecasts to determine which segments have the most potential

time series analysis

uses firms historical sales data to discover a patter, or patters in sales over time

executive judgement

intuition of one or more executives

what is the first step in target market selection process?

identify the appropriate targeting strategy

what is the second step in target market selection process

determine which segmentation variables to use

what is the third step

develop market segment profiles

what is the fourth step

evaluate relevant market segments

what is the fifth step

select specific target markets