Prelim_2_ChapterReview_Study_Guide

Prelim_2_ChapterReview_Study_Guide - PRELIM 2: Chapter 9...

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PRELIM 2: Chapter 9 Review Intro: ZAPPOS: “Service Company” that specializes in the sales of shoes, handbags, and other items. They focus on service. Market Segmentation: Aggregating prospective buyers into groups (1) common needs (2) will respond similarly to marketing action. >Respond more effectively to the wants of groups== increase in sales and profits > Product Differentiation: Using diff. marketing mix strategies > Effective when… (1) form meaningful groupings (2) develop specific marketing mix actions. Market Segments: Relatively homogenous (ROB) groups from market segmentation Segmenting: Various Buyers Needs====Organizations marketing program ** When expenses are greater than the benefits of segmenting…. Don’t do it. 3 specific segmenting strategies (1) One product, and multiple markets [developing product for several markets segments; saves money] (2) Multiple products and multiple market segments [ ex. Fords selection of cars; Gap+Banana Republic+Old Navy] (3) Mass customization “Segments of one” You must balance Satisfying customer wants w. Achieving Organizational Synergy Synergy: Increased customer value, achieved through performing organizational functions like marketing or more efficiency. 5 Key Steps in Segmenting and Targeting Markets 1. Group Potential buyers into segments a. Criteria to use in forming Segments i. Simplicity and Cost effectiveness of assigning potential buyers to segments. ii. Potential for increased profit. iii. Similarity of needs of potential buyers within a segment 1. Product features or advertising media used. (BET = Schfatzas) iv. Difference of needs of buyers among segments. 1. If needs of the various segments aren’t very different, combine them into fewer segments. A different segment usually requires a different marketing action that, in turn, means greater costs. If increased sales don’t offset extra costs, combine segments and reduce the number of marketing actions v. Potential of a marketing action to reach a segment. 1. no action- no segment
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b. Ways to segment i. Based on: Geography ii. Demographic iii. Psychographic iv. Behavioral 1. Product features 2. Usage rate - quantity consumed during a specific period. a. 80/20 rule- 80% of firms sales are obtained from 20% of its customers. b. Heavy Users are the most important. ( YOOOOOOOOO!!! Review MCLAUGHLINS slides for the previous portion. He goes into depth and it’s just so much common sense to write.) 2. Group products to be sold into categories a. Selling products as individual or in groups i. Wendy’s frosty or chix nuggets or hamburger vs. Value meal (burger, fries, drink) 3. Develop a Market- Product Grid and Estimate the Size Markets a. Market Product Grid - is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. Market size to market segment. (pg. 237) i. A large market would get a “3” ; no market would receive a “0” 4. Select Target Markets
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Prelim_2_ChapterReview_Study_Guide - PRELIM 2: Chapter 9...

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