Marketing Chapter 5

Front 1

Market

Back 1

group of people seeking products in a specific product category

Front 2

4 Market Requirements

Back 2

1. Must NEED or DESIRE the product
2. Must have the ABILITY to purchase it
3. Must be WILLING to use their buying power to purchase it
4. Must have the AUTHORITY to buy it

Front 3

2 Types of Markets

Back 3

Consumer (B2C) & Business (B2B)

Front 4

Consumer Markets (B2C)

Back 4

Purchasers and individuals in households; for personal consumption, not profit

Front 5

Business Markets (B2B)

Back 5

individuals or groups that purchase products for resale, direct use to produce other products, or use in daily business operations (producers, resellers, gov't, institutional markets)

Front 6

Market Segmentation

Back 6

refers to dividing the market into groups of (potential) customers - called market segments - with distinct characteristics, behaviors, or needs

Front 7

Target Market

Back 7

consists of selecting the most appropriate segment or segments to serve

Front 8

5 Conditions for Successful Market Segmentation

Back 8

1. heterogeneous (different) customer product needs
2. identifiable and divisible segments
3. market divided so segments can be compared on sales potential, costs, and profits
4. 1+ segment has potential to justify marketing expense
5. segment can be reached with a particular marketing mix

Front 9

Target Market Selection Process (5)

Back 9

1. Identify the appropriate targeting strategy
2. Determine which segmentation variables to use
3. Develop market segment profiles
4. Evaluate relevant market segments
5. Select specific target markets

Front 10

3 Types of Targeting Strategies

Back 10

undifferentiated, differentiated, and concentrated

Front 11

Undifferentiated Targeting Strategy

Back 11

an organization designs a single marketing mix and directs it at the entire market for a particular product (sugar, salt)
*homogeneous

Front 12

Homogeneous Market

Back 12

a large proportion of customers have similar needs for a product

Front 13

Concentrated Targeting Strategy

Back 13

an organization targets a single market segment using one marketing mix (Mont Blanc pens)
*heterogenous

Front 14

Heterogeneous Markets

Back 14

made up of individuals and organizations with diverse needs for products in a specific product class (automobile market)

Front 15

Market Segmentation

Back 15

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

Front 16

Market Segment

Back 16

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

Front 17

Differentiated Targeting Strategy

Back 17

targeting 2+ segments by developing a marketing mix for each (more $$ than concentrated)
*heterogeneous

Front 18

Segmentation Variables

Back 18

demographic, geographic, psychographic, and behavioral

Front 19

Most common segmentation variable

Back 19

demographic

Front 20

Most powerful segmentation variable

Back 20

behavioristic

Front 21

Most expensive segmentation variable

Back 21

psychographic

Front 22

3 Geographic Variables

Back 22

Market density
Geodemographic segmentation
Micromarketing

Front 23

Market Density

Back 23

number of potential customers within a unit of land area

Front 24

Geodemographic Segmentation

Back 24

market segmentation that clusters people in smaller units (zip codes, neighborhoods) based on lifestyle and demographic information

Front 25

Micromarketing

Back 25

organizations focus precise marketing efforts on very small geodemographic markets

Front 26

VALS

Back 26

most popular psychographic profiling scheme based on personality traits (values, attitudes, lifestyles, socioeconomic status)

Front 27

VALS: major tendencies of the four groups with higher income

Back 27

innovators, thinkers, achievers, experiencers (page 10 in packet)

Front 28

VALS: major tendencies of the four groups with lower resources

Back 28

believers, strivers, makers, survivors (page 10 in packet)

Front 29

3 Behavioristic Variables

Back 29

usage rates, benefits sought, usage or application type

Front 30

Benefit Segmentation

Back 30

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

Front 31

Market Segment Profiles

Back 31

Describes similarities among potential customers within a segment and explains the differences among people and organizations in different segments

Front 32

2 Benefits of Market Segment Profiles

Back 32

1. Determining most attractive segment or segments
2. Potentialy useful information for subsequent marketing decisions

Front 33

2 Approaches to Measuring Company Sales Potential

Back 33

breakdown approach & buildup approach

Front 34

Breakdown Approach

Back 34

measuring based on a general economic forecast

Front 35

Buildup Approach

Back 35

measuring by estimating how much of a product a buyer will purchase, multiplying by the number of potential buyers, and adding the totals of all the geographic areas considered

Front 36

Market Potential

Back 36

total amount of product customers will purchase in a specified period

Front 37

Company Sales Potential

Back 37

maximum percentage of market share a firm can expect for a product