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CLEP Principles of Marketing Study Notes

Heterogenous markets made up of individuals with

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Heterogenous Markets - made up of individuals with diverse product needs. Heterogeneous markets exist because not everyone wants the same type of car, furniture, clothes, etc. Broken up into multiple target markets through the process of Market Segmentation . Homogeneous market - is one in which the potential buyers have similar wants and needs, at least when evaluated from the perspective of a potential product. Marketing mix should be designed for a specific, clearly defined target market. Market Segmentation is used to define target markets which are homogenous .
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Market segmentation - divides larger markets made up of individuals with diverse needs into smaller target markets made up of people with similar needs. Market Targeting - Once the market segmentation process is complete, target markets for the company are chosen. The market has been broken up into market segments, and the company now chooses which of those segments it will target. 3 conditions for a market segment to be suitable to be chosen as a target market : Each segment must be identifiable and divisible, it must be reachable with a particular marketing mix, and it must have sufficient profit potential. 1. the segment must be clearly identifiable 2. must be reachable through existing channels 3. must have enough profit potential to justify developing and maintaining a marketing mix just for that segment. Direct marketing – benefit is the ability to reach niche markets. Includes in-home retailing, telemarketing, mail-order retailing, etc., is good for reaching niche markets because it can be much more targeted than other forms of marketing. Process of market segmentation begins with choosing segmentation bases, also known as segmentation variables . Segmentation variables are chosen, and then the markets are divided along those dimensions. Segmentation variables can be demographic or behavioral dimensions. Single-Variable Segmentation - performing market segmentation, using one segmentation variable, or base, is usually not very meaningful . Rarely useful, because in most cases, the resulting market segment is too broad and is not going to be homogeneous . For example, using just one variable such as gender, to split up the total toy market is too broad--toys that appeal to toddlers will not appeal to teens--the market segment is still too diverse to be considered a target market. Multi-variable segmentation - looks at relationships between more than one variable to define market segments. Uses more than one characteristic to split up a market, which results in more tightly defined market segment s. For example, age, income, and education are often used together to choose a target market. Once market segments have been identified as suitable to be potential target markets, a firm is going to choose among them
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Heterogenous Markets made up of individuals with diverse...

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