BMGT350 Notes for Exam 2 11 28 2012 CHAPTER 8 SEGMENTING AND TARGETING MARKETS Market people or organizations with needs or wants and the ability and willingness to buy Market segment a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs Market segmentation the process of dividing a market into meaningful relatively similar and identifiable segments or groups Segmentation bases variables characteristics of individuals groups or organizations Geographic segmentation segmenting markets by region of a country or the world market size market density or climate Demographic segmentation segmenting markets by age gender income ethnic background and family life cycle Family life cycle FLC a series of stages determined by a combination of age marital statue and the presence or absence of children Psychographic segmentation market segmentation on the basis of personality motives lifestyles and geodemographics Geodemographic segmentation segmenting potential customers into neighborhood lifestyle categories Benefit segmentation the process of grouping customers into market segments according to the benefits they seek from the product Usage rate segmentation dividing a market by the amount of product bought or consumed 80 20 principle a principle holding that 20 percent of all customers generate 80 percent of the demand Satisficers business customers who place an order with the first familiar supplier to satisfy product and delivery requirements Optimizers business customers who consider numerous suppliers both familiar and unfamiliar solicit bids and study all proposals carefully before selecting one Steps in Segmenting a Market Select a market or product category for study Choose a basis or bases for segmenting the market Select segmentation descriptors Profile and analyze segments Select target markets Design implement and maintain appropriate marketing mixes 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 resulting in mutually satisfying exchanges Undifferentiated targeting 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 used to select one segment of a market for targeting marketing efforts Niche one segment of a market Multisegment targeting strategy a strategy that chooses two or more well defined market segments and develops a distinct marketing mix for each Cannibalization a situation that occurs when sales of a new product cut into sales of a firm s existing products One to one marketing an individualized marketing method that utilizes customer information to build long term personalized and profitable relationships with each customer Continue growth of one to one marketing Personalization Time savings Loyalty Technology Positioning developing a specific marketing mix to influence potential customers overall perception of a brand product line or organization in general Position the place a product brand or group of products occupies in consumers minds relative to competing offerings Product differentiation a positioning strategy that some firms use to distinguish their products from those of competitors 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 Positioning Attribute Price and quality Use of application Product user Product class Competitor Emotion Repositioning changing consumers perceptions of a brand in relation to competing brands CHAPTER 9 DECISION SUPPORT SYSTEMS AND MARKETING Marketing information everyday information about developments in the marketing environment that managers use to prepare and adjust marketing RESEARCH plans Decision support system DSS an interactive flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions Interactive Flexible Discovery oriented Accessible Database marketing the creation of a large computerized file of customers and potential customers profiles and purchase patterns Marketing research the process of planning collecting and analyzing data relevant to a marketing decision Identify and formulate the problem opportunity Plan the research design and gather primary data Specify the sampling procedures Collect the data Analyze the data Prepare and present the report Follow up Marketing research problem determining what information is needed and how that information can be obtained efficiently and effectively Marketing research objective the specific information needed to solve a marketing research problem the objective should be to provide insightful decision making information Management decision problem a broad based problem that uses marketing research in order for managers to take proper actions Secondary data data previously collected for any purpose other than the one at hand research firms Marketing research aggregator a company that acquires catalogs reformats segments and resells reports already published by marketing Research design specifics which research questions must be answer how and when the data will be gathered and how the date will be analyzed Primary data information that is collected for the first time used for solving the particular problem under investigation Survey research the most popular technique for gathering primary data in which a researcher interacts with people to obtain facts opinions and attitudes Mall intercept interview a survey research method that involves interviewing people in the common areas of shopping malls Computer assisted personal interviewing an interviewing method in which the interviewer reads questions from a computer screen and enters the respondent s data directly into the computer Computer assisted self interviewing an interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where each respondent reads questions a computer screen and directly keys his or her answers into a computer Central location telephone CLT facility a specially designed phone room used to conduct telephone interviewing Executive interview a type of survey that involves interviewing businesspeople at their offices concerning industrial products or services Focus group seven to ten
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