exam2 - Chapter 9: Segmenting, Positioning, and Forecasting...

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Chapter 9: Segmenting, Positioning, and Forecasting Markets Market Segmentation – aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action Market segments : relatively homogenous groups of prospective buyers that result from the market segmentation process Product differentiation : using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different and better than competing products - Links buyers’ needs to organizations marketing program - Form meaningful groupings, develop specific marketing mix actions Segmentation strategies 1. One product and multiple market segments – an org produces only a single product/service and attempts to sell it to two or more market segments - avoids extra costs of developing and producing additional versions of the product 2. Multiple products and multiple market segments – different products each targeted at different type of customer 3. Segments of One: Mass Customization – tailoring goods/services to the tastes of individual customers on a high-volume scale - Customer relationship management: each customer has unique needs and wants, and desires special TLC - built-to-order (BTO): manufacturing a product only when there is an order from a customer CRM vs Synergies – find the ideal balance between satisfying a customer’s individual wants and achieving organizational synergy Increased customer value achieved through performing organizational functions - Customers should be better off as a result of increased synergies Cannibalization – new products stealing customers and sales from older products Steps in Segmenting and Targeting Markets 1. Group potential buyers into segments - Criteria to use in forming the segments: o Simplicity and cost-effectiveness of assigning potential buyers to segments o Potential for increased profit o Similarity of needs of potential buyers within a segment o Difference of needs of buyers among segments o Potential of a marketing action to reach a segment - Ways to segment consumer markets o Geographic - region o Demographic - household o Psychographic – lifestyle o 80/20 rule: 80 percent of firm’s sales obtained from 20 percent of customers - Variables to use 2. Group products to be sold into categories 3. Develop a market-product grid and estimate the size of markets Market-product grid: framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization 4. Select target markets - Criteria to use in selecting the target segments o Market size, Expected growth, competitive position, cost of reaching the segment, compatibility with the organization’s objectives and resources
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- Choose the segments 5. Take marketing actions to reach target markets Marketing synergies: opportunity for efficiency in terms of a market segment Product synergies: opportunity for efficiency in research and development and production
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exam2 - Chapter 9: Segmenting, Positioning, and Forecasting...

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