Business Marketing and Market Segmentation

Practice flashcards covering market segmentation strategies, targeting methods, and vocabulary from business marketing lecture sources.

Grey markets (parallel markets)

The trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.

Market segmentation

The process of dividing a broad consumer or business market, consisting of existing and potential customers, into sub-groups based on shared characteristics.

Undifferentiated approach

An approach where the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers.

Differentiated approach

A targeted approach where the firm targets one or more market segments and develops separate offers for each segment.

Geographic segmentation

Dividing a market based on residential address, location, climate, or region.

Demographic/socioeconomic segmentation

Dividing a market based on variables such as gender, age, income, occupation, socio-economic status, educational-level, family status, and religious affiliation.

Psychographic segmentation

Segmentation based on attitudes, values, beliefs, interests, and lifestyles.

Behavioral segmentation

Segmentation based on usage occasion, degree of loyalty, user status, and purchase-readiness.

Needs-based segmentation

Segmentation focusing on the relationship between the customer's needs for specific features and product or service benefits.

Segment profile

A detailed description of the similarities between consumers within a segment and the differences between consumers across different segments.

Target market

A subset of the total market and a group of customers within a business's serviceable available market at which it aims its marketing efforts and resources.

Primary target market

The main focus of marketing activities where most of a firm's resources are allocated.

Secondary target market

A segment that is not as large as the primary market, often less vital to a product's success, but may have growth potential or account for a high proportion of sales volume.

Distance Criterion

An approach that defines the primary geographic catchment area by identifying people who live within a predetermined distance, such as $5\,km$ for a retailer or $300\,km$ for a domestic tourist destination.

Sales Criterion

A method where a business allocates resources to target markets based on historical sales patterns and sales conversion rates.

Interest Survey Methods

Primary research, typically surveys, used to identify potential customers who have not purchased yet but exhibit positive attitudes and interest in making a purchase in the short-term.

Chain ratio and indexing methods

A method used in marketing branded goods and retail that involves ranking alternative market segments based on current indices.

Category Index

An index that measures overall patterns within a specific product category.

Brand Index

An index that calculates a given brand's performance within its specific product category.

Marketing Mix (4 Ps)

A set of tools tailored to the needs and expectations of a target market once it has been identified.