MKTG 409: EXAM 2
33 Cards in this Set
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Consumer Market
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purchasers and household members who intend to concume or benefit from purchased products and who do not buy products to make a profit
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Organizational or business to business market
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individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations.
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Target Marketing Selection Process
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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
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Step 1: identifying the appropriate targeting strategy Type 1
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Type 1: undifferentiated target strategy:
a strategy in which an org. defines an entire market for a particular product as its target market. designs a single marketing mix and directs it at the market mix consists of one type, one product, one price ex. staple food items like sugar effe…
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Type 2 in Step : identifying the appropriate targeting strategy
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concentrated target strategy: a strategy in which an organization targets a single market segment using one marketing mix
-advantage in that firms get to specialize -disadvantage is that firm is deoendent on that market for financial security, will be hard to change its focus to another …
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market segment
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individuals, groups, or organizations with one or more similar characteristics that make them have similar product needs
EX. fast food chains, soft drink companies, magazine publishers. 5 conditions for market segments: 1. consumer needs for the product must be heterogenous 2. segments …
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Type 3: Step 1Identifying appropriate targeting strategy
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differentiated targeting strategy: a strategy in which an organization targets two or more segments by developing a marketing mix for each segment.
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Step 2: determine which segmentation variables to use
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segmentation variables: characteristics of individuals, groups, or organizations used to divide a market into segments ex. location and gender.
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factors to be considered when selecting a segmentation variable
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1. relate to customers needs or behavior towards the product
2. variable must be measurable 3. companys resources and size
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variables for segmenting consumer markets
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4 categories of segmentation variable
1. demographic variables: age,gender, race and ethnicity, income 2. geographic variables: climate, terrain, city, size, population, market density, geodemographic segmentation whcih clusters people in ZIP code areas 3. psychographic variables: person…
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variables for segmenting organizational markets
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1. geographic location
2. types of organization 3. customer size 4. product use
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Step 3: develop market segment profiles
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a. profile describes the simlilarities among potential customers within a segment, also explains their differences
b. benefits for marketers: helps them decide which markets are best for the companies strengths, weaknesses, objectives, and resources
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Step 4
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evaluate relevant market segments
1. sales estimates- includes several factors a. product level b. geographic area c. time d. level of competition market potential- the total amount of a product that customers will purchase within a specified period at a specific level of industry wide m…
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company sales potential
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maximum percentage of market potential that an individual firm can expect to obtain for a specific product.
influences: a. market potential puts absolute limit on things b. magnitude of industry wide marketing activities c. intensity and effectiveness of the companys marketing activities
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breakdown approach
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measuring companys sales potential based on a general economic forecast for a specific period and the market potential derived from it
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buildup approach
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estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers,and adding the totals of all the geographic areas considered
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competitive assesment
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asks questions about competitors and evaluates their strengths and weaknesses compared to your own
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cost estimates
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determine if costs to reach segment are feasible and reasonable
evaluate costs also in comparison to competitors costs
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select specific target markets
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1. are there enough differences in customers needs to segment market?
2. does the company have the necessary resources to enter the market? 3. is it inline with the companies overall objectives? 4. are their political or legal reasons to account for?
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sales forecasts
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-the amount of a product a company expects to sell during a specific period at a specified level of marketing activities
-used for planning, organizing, implementing, and controlling their activities
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executive judgment
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based on the intuition of one or more executives
- usually swayed by recent experiences - based solely on past
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surveys
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a survey of customers regarding the quantities of products they intend to buy during a specific period
-useful if they have small customer base -drawbacks include customer must be willing to make accurate estimations, customers may not want to take part, intentions may not be reality, ta…
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sales-force forecasting survey
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survey of members of a firms sales force regarding anticipated sales in their territories for a specified period
-staff closest to customers on daily basis -can provide from smallest unit to the largest drawbacks can include- too optimistic or pessimistic, usually underestimated potentia…
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expert forecasting survey
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forecasts prepared by experts such as economists, management consultants, advertising execs, college professors
-expedient and efficiency -may lack motivation to do an effective job
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delphi technique
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experts create initial forecasts, submit them to the company for averaging and then refine the forecasts
-goal is to develop a highly effective sale forecast -experts work individually
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time series analysis
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forecasting method that uses historical sales data to discover patterns in the firms sales over time and generally involves trend, cycle, seasonal and random factor analyses
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trend analysis
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focuses on aggregate sales data over a period of many years to determine general trends in annual sales
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cycle analysis
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analyzes sales figures from a period of 3-5 years to ascertain whether sales fluctuate in a consistent, periodic manner
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seasonal analysis
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an analysis of daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales
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random factor analysis
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attempts to attribute erratic sales variation to random, non recurring events
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regression analysis
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-method of predicting sales based on finding a relationship between past sale and one or more variables such as population or income
-simple regression-uses one variable -multiple regression- two or more independent variables -develops a mathematical formula based on the variables
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market test
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making a product available to buyers in one or more test areas and measuring purchases and consumer responses
-gives information about actual not intended purchases -does not require historical data: can be used for new product -usually time consuming and expensive
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using multiple forecasting methods
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-many times use several methods
-can be due to length of time needed to forecast -multiple methods used to verify other methods
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Study Guide: Exam 1