Chapter 7-10 Final Exam Study Guide

The process of segmenting a market and selecting

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The process of segmenting a market and selecting specific segments as targets is the link between the various buyers' needs and the organization's marketing program One size fits all mass markets no longer exist. 3 specific segmentation strategies exist so businesses can decide whether or not it is cost effective to segment One product and multiple market segments- books and magazines Multiple products and multiple market segments- cars 2-tier marketing strategy: Banana Republic v Old Navy, Ann Taylor v Loft Segments of One: Mass Customization : tailoring goods or services to the tasted of individual customers on a high-volume scale. It is the next step beyond “Build to Order:” manufacturing a product only when there is an order from a customer “Segmentation Trade-Off: Synergies versus Cannibalization”: Need to balance customer’s wants and achieving organizational synergy or the increased customer value achieved through performing organizational functions. Customers should be better off in the end after increased synergies. The organization should also achieve increased revenues and profits “Steps in Segmenting and Targeting Markets” Step 3: Develop a market-product grid and estimate size of markets A market-product grid is a framework to relate the market segments of potential buyers to products offered. Markets on horizontal rows and product groupings in vertical columns. Each cell shows the estimated market size of a given product sold to a specific segment Step 4: Select Target Market 5 criteria used to select target segments 1. Market size 2. Expected growth 3. Competitive positions: less competition=more attractive
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4. Cost of reaching the segment: accessible? 5. Compatibility with the organization’s objectives and resources CHAPTER 10 “Classifying Products” Product : good, service, idea consisting of a bundle of tangible and intangible attributes that satisfied consumers’ needs and is received in exchange for money or something else of value. Nondurable good is an item consumed in one or a few uses. Food or fuel. Consumer advertising Durable good lasts many uses. Appliances. Personal selling Service: intangible activities or benefits that an org provides to satisfy consumer needs Idea is a thought that leads to an action Consumer products are purchases by ultimate consumer. Business products are products orgs buy that assist in providing other products for resale. Some products can be both, but result in different marketing actions CONSUMER PRODUCTS Differ in terms of the effort the consumer spends on the decision, attributes used in making the purchase decision, frequency of purchase Convenience products are purchases frequently with minimum effort
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