2 Chapter 10 Target Markets: Segmentation, Evaluation, and Positioning
3 Objectives Learn what a market is Understand differences among targeting strategiesBecome familiar with segmentation variablesKnow what segment profiles are and how they are usedEvaluate market segmentsIdentify factors that influence selection of specific market segmentsUnderstand positioningBecome familiar with sales forecasting methods
4 What are MarketsGroup of people seeking products in a specific product category (see Ch. 2 definition)Can be…specific location (flea market)large geographic arearelationship between supply and demand (market for given product)action word, as in market a product
5 Market Requirements Need/desire for a particular product Have ability to purchase productWilling to use buying powerHave authority to buy specific products
8 Undifferentiated Targeting Strategy A strategy in which an organization defines an entire market for a particular product as its target market, designs a single market mix, and directs it at that market.
9 Homogeneous MarketA market in which a large portion of customers have similar needs for a product.
10 Concentrated Targeting Strategy Through Market Segmentation
11 Heterogeneous MarketA market made up of individuals or organizations with diverse needs for products in a specific product class.
12 Market SegmentationThe process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs.
13 Market SegmentIndividuals, groups, or organizations sharing one or more similar characteristics that cause them to have similar product needs.
14 Conditions For Successful Market Segmentation Customer product needs are heterogeneousSegments identifiable and divisibleMarket divided so segments can be compared on sales potential, costs, and profitsAt least one segment has potential to justify marketing expenseSegment can be reached with a particular marketing mix
15 Concentrated Target Strategy Market segmentation strategy in which an organization targets a single market segment using one marketing mix
16 Differentiated Targeting Strategy Through Market Segmentation
17 Differentiated Targeting Strategy A strategy in which an organization targets two or more segments by developing a marketing mix for each segment.
18 Step 2: Determine Which Segmentation Variables to Use characteristics of individuals, groups, or organizations used to divide a market into segments
39 Developing Sales Forecast The amount of a product a company expects to sell during a specific period at a specified level of marketing activities.
40 Executive JudgmentA sales forecasting method based on the intuition of one or more executives.
41 Surveys Customer Forecasting Sales Force Forecasting Expert ForecastingDelphi TechniqueTime Series AnalysisTrend AnalysisRegression Analysis
42 Time Series AnalysisTime series analysis – historical sales data used to discover patterns in sales over timeTrend analysis – aggregate sales data over many years to determine trends in annual salesCycle analysis – analysis over 3-5 years to ascertain whether sales fluctuate in a consistent manner
43 Time Series Analysis (cont’d) Seasonal analysis – daily, weekly, or monthly sales figure to evaluate sales influences of seasonal factorsRandom factor analysis – attributing erratic sales variations to random events
44 Regression AnalysisPredicting sales based on finding a relationship between past sales and one or more independent variables, such as population or income
45 Market TestMaking a product available to buyers in one or more test areas and measuring purchases and consumer responses to marketing efforts.McDonald’s Market Tests Chicken Breast Strips
46 Using Multiple Forecasting Methods Diverse product linesProduct sold to different market segmentsVariation in length of needed forecastsVerifying results of one method by using others