CLEP Principles of Marketing Study Notes

Once market segments have been identified as suitable

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Once market segments have been identified as suitable to be potential target markets, a firm is going to choose among them by looking at several factors: 1. segment's characteristics 2. the competitors within that market segment 3. how good of a match it is with the company (does it go along w/ the firm’s objectives, match its strengths, etc) Concentration Strategy ( aka: Single-Segment Strategy) - firm decides to focus on only one market segment as a target market by creating and maintaining one marketing mix. This allows the company to specialize for that one market, and compete with larger organizations; however, its success depends on demand remaining strong in that one market. Also, it can develop an image associated with that segment, making it difficult to appeal to other segments when it wants to expand later. An example is the car manufacturer Lamborghini, which focuses on the super high-end luxury sports car segment. Disadvantage - company is putting all of its eggs in one basket, and it may become entrenched in that one market and be unable to branch out to other market segments. Multisegment strategy (aka: Differentiated Strategy) - company has more than one target market and develops and maintains marketing mixes for each of them. Costs of planning, organizing, implementing, and controlling marketing activities increase as a company tries to target more market segments; however, there can also be more potential for profit, and more customers to appeal to. Undifferentiated Approach (aka: Total Market Approach or Mass Marketing)- When a company designs a single marketing mix and directs it at the entire market for a particular product. Products with little or no variation such as sugar and salt are often marketed successfully using the undifferentiated approach A good understanding of the forces that shape consumer behavior is helpful in reaching profitable market segments. Buying Behavior - decision processes and acts of people involved in buying and using products. A big part is the decision process used in making purchases, and consists of 5 stages: 1. recognizing a problem - what is the problem or need that needs to be satisfied? 2. searching for information 3. evaluating alternative products
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4. purchasing 5. postpurchase evaluation The first three steps of the buying decision process take place before the purchase, the fourth is purchasing, and the fifth is postpurchase. Most of the time, people omit one or more steps--all five steps are associated with high involvement or extensive decision-making. There are three steps associated with low -involvement decision making--identifying a need or problem, making the purchase, and postpurchase evaluation. Level of involvement
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Once market segments have been identified as suitable to be...

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