MKT 381 | Chapter 6, 8 & 9

Define Market

a group of people or organizations with needs or wants and the ability and willingness to pay

Define Market Segment

the process of dividing a market into meaningful, relatively similar and identifiable segments

Define Target Market

a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group

What is the importance of Market Segmentation and Target Marketing?

Characteristics of a Market

composed of people who have wants or needs that have to be satisfied, the ability to buy the products, and willing to exchange resources.

If a group of people lack any of the characteristics they are _____ a market

NOT

What are the 3 basic steps of Market Segmentation

1) Select a Market for Study, 2) Choose a bases for segmentation, 3) Profile Segments

What are the five ways to segment a market?

Demographic, Psychographic, Benefits Sought, and Usage Rate

Geographic Segmentation

a type of segmentation that divides a market into different geographical units

What are some geographical units described in Geographic Segmentation

Regions, Countries, States, Cities or Towns, Neighborhoods, and Market Density

Demographic Segmentation

a type of segmentation that divides a market on the basis of easily quantifiable variables (easy to measure)

quantifiable variables in the Demographic Segmentation

age, gender, income, ethnic background, family life cycle. (easy to measure)

Psychographic Segmentation

a type of market segmentation that divides a market on the basis of psychological factors

Psychological Factors of Psychographical Segmentation

Lifestyle, Personality, Values & Beliefs, and Activities, Interest and Opinions.

Benefit Segmentation

type of segmentation that divides a market according to the benefits people seek from the product category

Usage Rate Segmentation

type of segmentation that divides a market according to the amount of product bought by the consumer

Define Profile

a complete description of the characteristics and wants of the people within a market segment

The two steps of Target Marketing

determining market coverage strategy, and which segments to target

Three Market Coverage Strategies

Undifferentiated, Concentrated & Multi-Segmented

Undifferentiated Target Strategy

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

Concentrated Targeting Strategy

A Strategy that involves focusing a firm’s efforts on one segments of a market and developing a highly specialized marketing mix

Multi-Segment Strategy

Strategy that chooses two or more well define market segments and develops a distinct marketing mix for each

Cannibalization

Product competition against yourself

Factors to Evaluate Which Segments to Target

Size and Sales potential of each segments, cost, competition, and compatibility

Define Positioning

developing a specific marketing mix to influence how the target market perceives a brand, product line, or organization in comparison to the competition

Steps of two basic steps

1) determining product positioning and 2) developing the marketing program

Perceptual Mapping

A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds

What are the Marketing Mix elements based on?

All marketing mix decisions must be made with the objectives of contributing to the overall image of the product and satisfying the needs of the target market(s).

Define Consumer Behavior

the study of how consumers make purchase decisions, how consumers use and dispose of purchased products/ services, what factors influence all the above

What theory explains why consumers behave as they do?

No single theory explains why consumers behave as they do

Define the Consumer Decision Making Process

five step process consumers use when buying goods or services

Define the five step process consumers use when buying goods or services

1) Need Recognition, 2) Information Search, 3) Evaluation of Alternatives, 4) Purchase, 5) Post Purchase Behavior

Why study consumer behavior?

Better marketing mix’s

What is Need Recognition

Result of an imbalance between actual and desired states

What is a Marketing Manager’s objective?

get consumers to recognize the “want—got gap”

What are the two types of information search

internal and external

Internal Information Search

process of recalling information stored in the memory

External Information Search

process of seeking information in the outside environment

Define a Non-Marketing controlled Information Source

a product Information source that is not associated with advertising or promotion

Define a Marketing Controlled Information Source

a product information source that originates with marketers promoting the product

The extent to which an individual conducts an external search depends on

whether they need more or less information

Define a consumer that needs less information

less risk, more knowledge, more product experience, low level of interest, and confidence in decision

Define a consumer that needs more information

more risk, less knowledge, product experience, high level interest, and lack of confidence in decisions

Define an Evoked Set (Consideration Set)

A group of brands resulting from an information search from which buyer can choose (The evoked set is made up of the consumers most preferred brand alternative)

Define the evaluation of the Alternatives and Purchase

Rank each brand in the evoked set, using the consumer’s evaluative criteria, and purchase brand that best meets the evaluative criteria

Define the Post Purchase Behavior

consists of evaluating the product after purchase, consumer expect certain outcomes from the purchase, how well these outcomes meet expectation determines customer satisfaction

Define Cognitive Dissonance

inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions

Engaging in post-purchase communication provide

excellent post purchase customer service

Define the Consumer Buying Decisions and Consumer Involvement

Routine Response, Limited Decision, and Extensive Decisions

Involvement

amount of time and effort a buyer invests in the search evaluation, and decision processes of consumer behavior

Routine Response Behavior

the type of decision making exhibited by consumers buying frequently purchased, low cost goods, and services; requires little search and decision time

Limited Decision Making

the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category

Define Extensive Decision Making

The most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bough item; requires use of several criteria for evaluating options, and much time for seeking information

Define Psychological Influences

Perception, Motivation, Learning Habits, Beliefs and Attitudes

Define Perception

The process in which a person picks up stimuli through their senses, organizes it and assigns its meanings

Define Selective Exposure

the process whereby a consumer notices certain stimuli and ignores others

Define Selective Retention

consumer remembers only that information that is important to them

Define Motivation

The energizing force that causes a person to take action to satisfy a need

Describe Maslow’s Hierarchy of Needs from bottom to top?

Psychological, Safety, Social, Esteem, and Self Actualization

Define an Experiential way of learning

occurs when an experience changes behavior

Define a conceptual way of learning

not learned though direct experience

What Boosts learning?

Repetition and Reinforcement

Define Attitudes

A learned predisposition to respond in a consistently favorable or unfavorable manner toward an object, person, or behavior (Attitudes are shaped by our beliefs and tend to be enduring)

Cross tabulation

a method of analyzing data that lets the analyst look at the responses to one question in relation to the response to one or more other questions