Marketing- Chapter 5

consumer markets (B2C)

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

Business markets (B2B)

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

5 step Selection Process for Target Markets

1. identify
2. determine variables
3. develop profiles
4. evaluate
5. select specific ______ markets

Undifferentiated Strategy (mass marketing)

a strategy which an organization designs a single marketing mix and directs it at the entire market to a particular product

underlying assumption: what we have done will satisfy the market

2 requirements

homogenous market *undifferentiated

large population with similar needs

Concentrated Strategy

involves heterogenous market and market segmentation

heterogenous market

a population with diverse needs

market segmentation

the process of dividing the whole market into market groups, with similar product needs, the purpose is to more precisely match those needs

market segment

groups with one or more characteristics causing them to have similar character needs

5 conditions of effective segmentation:

1. customer needs for product have to be heterogenous
2. segments are identifiable and divisible
3. the total market is not divided so segments can be compared and estimated for sales potential, sales, and profits
4. at least one segment much have enough profit potential to justify developing and maintaining a special marketing mix for it
5. company must be able to reach the chosen segment with a particular marketing mix (comes down to resources)

Differentiated Strategy

a strategy in which an organization targets two or more segments by developing a marketing mix for each segment

* negative is that you have more cost

demographics

age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, social class

geographic

region, city size, county size, state size, market density, climate, terrain

market density

* a part of geographic
* the number of potential customers within a unit of land area

micro marketing

an approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets

geofencing

app based, come within a certain distance of a store/place and be notified with a deal

* part of micro marketing

geodemographics (PRISM & Tapestry)

a method of market segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information

Psychographics

personality characteristics, motives, and lifestyle to segment markets \*about lifestyle segmentation

* group according to how you spend your time, your values, your beliefs, and also your income level
* AIOs (activities interest and opinions)
* VALs (values, attitude and lifestyle - private instrument owned by SRI Gala)
* Persona takes all the data to see if product were offered for that demographic \*new technology

Behavioristic

volume usage, end use, benefit expectations, brand loyalty, price sensitivity

benefit segmentation

the division of a market according to benefits that consumers want from the product

* must be identifiable
* using these benefits, marketer must be able to divide people into recognizable segments
* one or more off the resulting segments much be accessible to the firm's marketing efforts

business geographic location

differences in climate, terrain, or regional customer preferences

business type

require different duct features, price structures, distribution systems and selling strategies

customer size

affect purchasing procedures and the types and quantities of products it needs

product use

raw materials that can be used in numerous ways in the production of goods

* affects the types and amounts of products purchased, as well as the purchasing method

develop profiles

describe similarities and differences between potential customers

Evaluate

analyze data and profiles

Sales estimate

potential sales for a market segment cna be measured along several dimensions, including product level, geographic area, time, and level of competition

market potential

the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity

company sales potential

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

Breakdown

measuring company sales potential based on a general economic forecast for a specific period and the market potential derived from it

Buildup

measuring company sales potential by estimating how much of a product area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered

Competitive Assessment

assess competitors that are already operating in the segments being considered

forecasts

the amount of a product the company expects to sell during a specific period at a specified level of marketing activity

executive judgement

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

* effective when the owner has years of experience

surveys

many different forms

* survey customers and are they going to buy it
* survey sales

time series analysis

a forecasting method that uses historical data to discover patterns in the firm's sales over time and generally involves trend, cycle, seasonal, and random factor analyses

regression analysis

a method of predicting sales based on finding a relationship between past sales and one or more independent variables, such as a population or income

market testing

making a product available to buyer in one or more test areas and measuring purchases and consumer responses to marketing efforts