Test 3 - June 13th CASE STUDY CHANGE BMW CASE 304 QUESTIONS...

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June 13th : CASE STUDY CHANGE: BMW CASE 304, QUESTIONS 1, 2, 3 WHAT YOU NEED TO KNOW FROM Ch. 9 : I. WHY MARKET SEGMENTS P. 226-230 a. MARKET SEGMENTATION: AGGREGATING PROSPECTIVE BUYERS INTO GROUPS THAT i. HAVE COMMON NEEDS ii. WILL RESPOND SIMILARLY TO A MARKETING ACTION b. SEGMENTATION LINKS NEEDS TO ACTION FIG 9-1 P.227 c. SEGMENTATION TRADE-OFF P. 229- 230 i. CRM VS SYNERGIES (ECONOMIES OF SCALE) II. STEPS IN SEGMENTING AND TERGETING MARKETS P. 230-242 a. STEP 1 : GROUP POTENTIAL BUYERS INTO SEGMENTS i. 5 CRITERIA P. 231 1. A SEGMENT IS HOMOGENEOUS WITHIN AND HETEROGENEOUS BETWEEN ii. WAYS TOSEGMENT FIG 9-3 P. 232 AND FIG9-6 P. 235 1. GEOGRAPHIC 2. DEMOGRAPHIC 3. PSYCHOGRAPHIC 4. BEHAVIORAL b. STEP 2 : GROUP PRODUCTS TO BE SOLD INTO CATEGORIES c. STEP 3 : DEVELOP A MARKET-PRODUCT GRID AND ESTIMATE THE SIZE OF THE MARKETS FIG 9-7 P.237 ; FIG 9-8 P.238 ; P. 243 d. STEP 4 : SELECT TARGET MARKETS 5 CRITERIA i. MARKET SIZE : how big is the target market ? if big, then lots of potential ii. EXPECTED GROWTH : eg. Hispanic markets in America iii. COMPETITIVE POSITION : are there a lot of competitors in that market already ? Also want to know their market shares o Eg. o Market A Market B o 80 % 10% o 2 5 o 2 15 o 2 10 o 3 5 o 3 5 Market shares more evenly distributed in Market B iv. COST OF REACHING THE SEGMENT : if reach is expensive then consider a diff segment, it is possible that sales are high but profits are low because reach expenses are too high
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v. COMPATIBILITY WITH THE ORGANIZATION : what advantages does company have that would make these segments more compatable than others. E.g. distribution chanel set up through wallmart. Should we set one up with speciality stores too ? probably not. vi. PROFIT : which of these segments is going to be the most profitable to us ? e. STEP 5 : TAKE MARKETING ACTIONS TO REACH TARGET MARKETS III. POSTIONING THE PRODUCT P. 243-245 Positioning : How customers think of your product/brand. This brand compared to that brand. o Better quality, sweeter, faster, etc. o E.g repostion chocolate milk (p. 245): adults perceive it as less of a children’s drink and more of an adults drink (repostioning) o SIMILAR products aimed at SAME target market: must convince target market to buy your brand over competitors brand: must use DIFFERENT positioning o DIFFERENTIATE: 4 Ps to do this a. THE PLACE AN OFFERING OCCUPIES IN A CONSUMER’S MIND b. PERCEPTUAL MAP FIG 9-10 P. 244 AND 9- 11 P. 245 Lots of competitors in B and few in F: helpful in determining how many competitors exist Defining the market: o What beverage isn’t here? Beer. Missing drinks o
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