Marketing 351: Harry Anicich Chapter 8: Segmenting and Targeting Markets1. Criteria for successful segmentationa. Substantiality: a market segment needs many potential customersi. “Big enough”b. Indentifiability and measurabilityc. Accessibility: must be able to reach members of targeted segments with customized marketing mixes. d. Responsiveness: Marketing can be segmented using any criteria that seem logical. All segments seem to respond the same. 2. Bases for Segmenting Consumer Marketsa. Geographic Segmentation: refers to segmenting markets by region of a country or the world, market size, density (# of people) or climate. i. Professor, spoke about doing his laundry in Hawaii. b. Demographic Segmentation: Age, gender, income, ethnic background and family life cycle (series of stages determined by combination of age, marital status, and the presence or absence of children.)i. Questions with one-word answers!ii. In-class story: Two boys who live next door to each other (everything about them is the same.)c. Psychographic: “What do you do on the weekend?” i. AIO: Attitudes, Interests and Opinions.ii. Personality iii. Motivesiv. Lifestylesv. Geodemographics: tailors to people in specific neighborhoods with specific lifestyles. d. Usage-Rate Segmentation (amount bought/amount consumed)i. 80/20 principal: 20% of all customers generate 80% of all demand. e. Buying Processesi. Satisficers: business customers who place an order with the first familiar supplier to satisfy product and delivery requirements. ii. Optimizers: business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids and study all proposals carefully before selecting one. 1. Wal-Mart purchaser takes 5% off invoices. 3. Strategies for Selecting Target Marketsa. Target market: group of people or organizations for which an organization designs, implements and maintains a marketing mix.b. Targeting Strategyi. Undifferentiated Targeting: adopts a mass-market philosophy ii. Concentrated Targetingiii. Multisegment Targeting4. CRM as a targeting Toola. Personalizationb. Time Savingsc. Loyaltyd. Technology5. Positioning a. Product differentiationb. Perceptual Mapping: displaying or graphing, in two or more dimensions, the location of products, brands or groups of products in customers minds. c. Repositioning: changing consumers’ perceptions of a brand.Chapter 9: Marketing Research1. Paralysis by Analysis: story about Vander Kamp foods 2. The Marketing Research Processa. Identify and formulate the problem/opportunityb. Plan the research design and gather datac. Specify the sampling proceduresd. Collect primary datae. Analyze dataf. Prepare and present the reportg. Follow up3. Different Types of Survey Researcha. Ethnographic research: Story about eating salsa and chipsi. Study of human behavior in its natural context. b. Virtual Shoppingc. Experiment: researcher alters one or more variables. 4. Collecting Dataa. Field service firm: specializes in interviewing respondents on a subcontracted basis. 5. Analyzing dataa. Cross-tabulation: pattern emerge, compares multiple questions6. Scanner-based researcha. A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy. b. Scanner-base research: Symphony IRI Group Inc. (largest data collection agency on the planet) i. InfoScan, symphony’s most successful product. 7. CRM (Customer Relationship Management) 8. Competitive intelligence: assess their competitors and vendors. a. Professor talked about Interviewing competing VPChapter 10: Product Concepts1. Convenience Product: Lower price, low mental involvement, high turnover2. Shopping Product: compared heavily, more expensive than convenience product3. Specialty Products: expensive, reluctant to accept substitutes4. Unsought products: New products, product known that a buyer does not actively seek. 5. Product Items, Lines and Mixesa. Product mix: all the items that a firm sells. b. Product line: items that are similar in the same firmc. Product item: specific version of a productd. Product Lines organizationi. Advertising Economiesii. Package uniformity1. Soda cansiii. Standardized components1. Bottle capsiv. Efficient sales and distribution v. Equivalent quality1. “Cherry coke”e. Product mix width: refers the number of product lines an organizationoffers. f. Product Line depth: number of product items in a product line.g. Product modificationi. Quality modification: usually downii. Functional modification: iPhoneiii. Style Modificationh. Planned obsolescence: commonly used to describe of modifying products so that those that have already been sold become obsolete before they actually need replacement. i. Product extension: adds products j. Product contraction: eliminate products6. Branding a. Success of any business or consumer product depends in part on the target markets ability to distinguish one product from another. b. Brand: name or term, symbol, designc. Brand name: part of a brand that can be spokend. Benefits of brandingi. Brand equity: value of a company and brand namesii. Global brand: refers to a brand that obtains at least 1/3 of its earnings from outside its home country. iii. Brand loyaltye. Branding Strategies i. Manufacturers brand ii. Private brand: “store brand”iii. Captive brands: no evidence of the stores affiliation iv. Individual brandingv. Family branding: “Jack Daniels” whiskey, bbq sauce, coffee, clothingvi. Co-branding: entails placing two or more brand names on a product or it package.1. Eddie bower edition Ford Expeditionvii. Generic Product name: product cannot be trademarked. f. Packaging: contains and protect ones product, promotes ones product, facilitates storage use and convenience. Recyclable. g. Labeling: marketing tool, safety tool. i. Greenwashing: gives impression of environmental friendly, when not environmentally friendly.7. Global Issues in branding and packaginga. One brand name everywhereb. Adaptations and modificationsc. Different brand names and different markets8. Product Warranties: Kennedy introduced as requirement in American