MKT 300 1nd Edition Lecture 6Outline of Last Lecture VIII. Chapter 3 Terms (part 2)IX.Chapter 3 Concepts to Apply (part 2)Outline of Current Lecture X. Chapter 4 Terms (part 1)XI.Chapter 4 Concepts to Apply (part 1). Current LectureX. Chapter 4 Terms (part 1)• MarketA group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services - that is, ways of satisfying those needs Two basic groupsGeneric: broadly similar needs and sellers offering various often diverse ways of satisfying those needsCustomer’s viewpoint Entertainment seekers Product: very similar needs and sellers offering various close substitute ways of satisfying those needs Product type: services or goods wanted Customer needs: needs satisfied for the customer Customer types: final consumer of product Geographic area: where firm competes • Market segmentationTwo step process of naming broad product markets and segmenting thesebroad product markets in order to select target markets and develop suitable marketing mixes Disaggregating (the naming) step involved brainstorming about very different solutions to various generic needs and selecting some broad areas (broad product markets) where the firm has some resources and experience • SegmentingThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Aggregating processClustering people with similar needs into a market segmentMarket segment is a relatively homogeneous group of customers who will respond to a marketing mix in a similar way Good segments need:Homogeneous (similar) within-customers in a market segment should be similar as possibleHeterogeneous (different) between-customers in different markets should be as different as possible Substantial - big enough to be profitable Operational - the segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables • Single target market approachSegmenting the market and picking one of the homogeneous segments asthe firm’s target market w/ one marketing mix• Multiple target market approachSegmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix • Combined target market approach Combining two or more submarkets into one larger target market as a basis for one strategy • CombinersTry to increase the size of their target markets by combining two or more segments • SegmentersAim at one or more homogeneous segments and try to develop a different marketing mix for each segment XI. Chapter 4 Concepts to Apply (part 1)• Why is it important to segment? How do you know when to stop?Important to narrow down and cluster people with similar needs Each person is one of kind, but may be possible to aggregate some similar people into a product market Wants to aggregate individual customers into some workable number of relatively homogeneous target markets and then treat each target market differently • How does a segment differ from a target? What are 4 key features of a good segment?Market segmentation defines possible groupings (target markets); first narrow down to specific product market; second segment into possible target markets —groups customers with similar needs - aggregating Target is based on the segmentation, you have identified possible target markets - decide how may segments you must pursue to achieve yourmarketing goals and decide whether or not to combine Homogeneous similar withinHeterogeneous betweenSubstantialOperational • When do you choose single segment strategy vs. a multiple or a combined market strategy?Combiners try to increase the size of their target markets by commingling two or more segments Look at various submarkets for similarities and extend or modify their basic offering to appeal to these combined customers Make compromises in developing the marketing mix Works “fairly well” with each segment Segmenters aim at one or more homo segments and develop different marketing mix for each Want to satisfy each segment very well Could provide greater profit potential for the firm • What are three potential dimensions on which to segment consumer markets, and examples of each?Psychographic -needs, benefits— Demographic-male teens age sex Geographic location and other demographic characteristics of potential customers – North America• What is the difference between a qualifying and a deterring dimension?▪ Qualifying: needs to by present for a product to even be considered. i.e.) snack is tastyDetermining: actually affects customer’s purchase or specific product or brand. Plus Protein, so I choose