Marketing Ch 6

heterogeneous market

are markets made up of individuals or organizations with diverse product needs.

customer forecasting survey

marketers ask customers what types and quantities of products they intend to buy during a specific period.

segmentation variables

characteristics of individuals, groups, or organizations that are used to divide a market into segments. A segmentation variable should be related to customers' needs for, uses of, or behavior toward the product. The variable must be measurable.

geodemographic segmentation

clusters people in ZIP code areas and even smaller neighborhood units based on lifestyle and demographic information.

business market

consists of individuals or groups that purchase a specific kind of product for one of three purposes: Resale Direct use in producing other products Use in general daily operations Business markets may also be called business-to-business (B2B), industrial, or organizational markets.

market segmentation

consists of individuals, groups, or organizations with one or more similar characteristics that cause them to have relatively similar product needs.

trend analysis

focuses on aggregate sales data, such as the company's annual sales figures, covering a period of many years to determine whether annual sales are generally rising, falling, or staying about the same.

micromarketing

focuses precise marketing efforts on very small geographic markets, such as community and even neighborhood markets

breakdown approach

measures company sales potential based on a general economic forecast for a specific time period and the market potential derived from it. The marketing manager starts with broad comprehensive forecasts of general economic activity, estimates market potential, and then estimates the company's sales potential.

homogenous market

meaning that a large proportion of customers have similar needs for the product.

xpert forecasting survey

a company hires experienced professionals to help prepare the sales forecast. Using experts is expedient and relatively inexpensive, but they may be less motivated than company personnel to do an effective job.

differentiated targeting strategy

a strategy in which an organization targets two or more segments by developing a marketing mix for each segment. A business can increase its sales in a total market by focusing on more than one segment because its marketing mixes are aimed at different people. Sales to additional market segments may absorb excess production capacity. A greater number of production processes, materials, and skills means higher production costs.

random factor analysis

attempts to attribute erratic sales variations to random, nonrecurring events, such as a regional power failure, a natural disaster, or political unrest in a foreign market. Time series analysis is an effective forecasting method for products with reasonably stable demand, but not for products with highly erratic demand.

market segment

consists of individuals, groups, or organizations with one or more similar characteristics that cause them to have relatively similar product needs. There are five conditions for effective segmentation. 1. Consumers' needs for the product must be heterogeneous. 2. The segments must be identifiable and divisible. 3. so segments can be compared with respect to estimated sales potential, costs, and profits. 4. At least one segment must have enough profit potential to justify the development and maintenance of a special marketing mix for that segment. 5. The organization must be able to reach the chosen segment with a particular marketing mix.

consumer market

consists of purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make a profit. Consumer markets are sometimes referred to as business-to-consumer (B2C) markets.

Delphi Technique

experts create initial forecasts, submit them to the company for averaging, and have the results returned to them so they can make individual refined forecasts that are highly accurate.

sales force forecasting survey

he firm's salespeople estimate anticipated sales in their territories for a specified period. The forecaster combines these territorial estimates to arrive at a tentative forecast. The sales staff is closer to customers on a daily basis than other company personnel and should know more about customers' product needs. Sales representatives are more likely to work toward the forecast's achievement. Forecasts can be prepared for single territories, divisions consisting of several territories, regions made up of multiple divisions, and the total geographic market.

market test

involves making a product available to buyers in one or more test areas and measuring purchases and consumer responses to distribution, promotion, and price.

undifferentiated targeting strategy

is one in which an organization defines an entire market for a particular product as its target market, designs a single marketing mix, and directs it at the entire market.

sales forecast

is the amount of a product the company expects to sell during a specific period at a specified level of marketing activity.

benefit segmentation

is the division of a market according to benefits that consumers want from the product. The benefits sought must be identifiable. Marketers must be able to divide people into recognizable segments using these benefits. One or more of the resulting segments must be accessible to the organization's marketing efforts.

company sales potential

is the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product. Factors that influence a company's sales potential include the market's sales potential, the magnitude of industry-wide marketing activities, and the intensity and effectiveness of the organization's marketing activities relative to those of its competitors. There are two general approaches to measuring company sales potential: breakdown and buildup.

market potential

is the total amount of a product for all firms in an industry that customers will purchase within a specified period at a specific level of industry-wide marketing activity. It can be stated in terms of dollars or units and can refer to a total market or to a market segment. When analyzing market potential, it is important to indicate the time frame and the level of industry marketing activities.

buildup approach

measures company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given time period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered.

market density

refers to the number of potential customers within a unit of land area, such as a square mile.

concentrated targeting strategy

s a strategy in which an organization targets a single market segment using one marketing mix.

seasonal analysis

ses daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales

regression analysis

the forecaster seeks to find a relationship between past sales (the dependent variable) and one or more independent variables, such as population, per capita income, or gross domestic product. The objective is to develop a mathematical formula that accurately describes a relationship between the firm's sales and one or more variables. Regression analysis is useful when a precise association can be established or when historical sales data are extensive. It is futile for forecasting sales of new products.

time series analysis

the forecaster uses the firm's historical sales data to discover a pattern or patterns in the firm's sales over time. It assumes that past sales patterns will continue in the future.

executive judgment

the intuition of one or more executives, which is unscientific but expedient and inexpensive. It may work reasonably well when product demand is relatively stable and the forecaster has years of market-related experience.

cycle analysis

uses sales figures for a three- to five-year period to ascertain whether sales fluctuate in a consistent, periodic manner.