Chapter 6- Marketing Chapter 6

Give examples of psychographic variables.

(most risky) personality traits, lifestyle, motives

Define Market.

A group of people who as individuals or organizations have needs for products in a product class and have the ability, willingness, and authority to purchase such products

Executive Judgement

A sales forecasting method based on the intuition of one or more executives (fastest and cheapest)

Differentiated targeting strategy

A strategy in which an organization targets two or more segments by developing a marketing mix for each segment

Market segment

A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.

Cycle analysis

An analysis of sales figures for a three- to five-year period to ascertain whether sales fluctuate in a consistent, periodic manner

What are the 4 categories of segmentation variables?

Demographic variables, geographic variables, psychographic variables, and behavioristic variables

What is the third step in the target market selection process?

Develop market segment profiles

What is the fourth step in the target market selection process?

Evaluate relevant market segments (evaluating which segments are profitable and which ones are not)

What are the four factors of the marketing mix?

Price, Promotion, Product, and distribution (place)

Sales forecast

The amount of a product a company expects to sell during a specific period at a specified level of marketing activities

Give examples of Geographic variables.

region, city size, market density, climate, terrain

What are the three reasons that business markets purchase products?

resale, direct use in producing other products or use in daily operations.

Geodemographic Segmentation

segmentation method that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information

Family life cycle

the idea that marital status and the age and presence of children influence household income and product needs

Company Sales Potential

the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product

Market Density

the number of potential customers within a unit of land area

Market Segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Market potential

the total amount of a product that customers will purchase within a specified period at a specific level of industrywide marketing activity

Benefit Segmentation

dividing the market into segments according to the different benefits that consumers seek from the product

Delphi technique

experts make forecasts and submit them to the company, the company then compares them with their own and sends then back to the experts for final analysis (most accurate)

What are the segmentation variables for business markets?

geographic location, type of organization, customer size, and product use

What is a target market?

group of people or organizations for which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members

What is the first step of the target market selection process?

identify the appropriate targeting strategy

Give examples of Demographic variables.

income, age, gender, ethnicity, social class, occupation

Market test

making a product available to buyers in one or more test areas and measuring purchases and consumer responses

Breakdown Approach

measuring company sales potential based on a general economic forecast for a specific period and the market potential derived from it

Buildup Approach

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

Electrical wire would be a product for what type of market?

business

Segmentation variables

characteristics of individuals, groups, or organizations used to divide a market into segments

Repositioning

Changing a products target market and altering the perception of the product and who it is for

Clothing would be a product for what type of market?

Consumer

What kind of market purchases products for the purpose of consumption and not to make profit?

Consumer Market

product positioning

Creating and maintaining a certain concept of a product in customers' minds

What are the five categories of sales forecasting?

Executive judgement, surveys, forecasting surveys, regression analysis, and marketing tests

Another name for a business market is?

Organizational, business to business (B2B), industrial

What is an effect of using a differentiated targeting strategy?

Production costs go up because they are making more products

Expert forecasting survey

Sales forecasts prepared by experts such as economists, management consultants, advertising executives, college professors, or other persons outside the firm

What is the fifth step in the Target market selection process?

Select specific target markets- Pick segments that are most profitable for companies and finalize what action the company is going to do

What is the second step in the target market selection process?

pick which segmentation variables to use

Give examples of behavioristic variables.

Volume usage, benefit expectations, brand loyalty etc.

time series analysis

a forecasting method that uses historical sales data to discover patterns in the firm's sales over time and generally involves trend, cycle, seasonal, and random factor analyses

Homogenous market

a market in which a large proportion of customers have similar needs for a product

Heterogeneous market

a market made up of individuals or organizations with diverse needs for products in a specific product class

concentrated targeting strategy

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

Regression analysis

a method of predicting sales based on finding a relationship between past sales and one or more independent variables, such as population or income

Sales force forecasting survey

a survey of a firm's sales force regarding anticipated sales in their territories for a specified period

Customer forecasting survey

a survey of customers regarding the types and quantities of products they intend to buy during a specific period

Random factor analysis

an analysis attempting to attribute erratic sales variation to random, nonrecurrent events

Seasonal analysis

an analysis of daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales

trend analysis

an analysis that focuses on aggregate sales data over a period of many years to determine general trends in annual sales

Micromarketing

an approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets

What are the characteristics of a marketing mix in an undifferentiated marketing strategy?

one type of product with little or no variation, one price, one promotional program aimed at everyone, and one distribution system.

What is the purpose of market segment profiles?

to describe the similarities among potential customers within a segment and explains the differences among people in different segments

Competitive assessment

tool used to rate the strengths of companies and pinpoint them against rivals.

What is an undifferentiated marketing strategy?

when an org. designs a single marketing mix and directs it at an entire market for a particular product.