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Market Segments Must Be:
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.
A group of consumers who respond in a similar way to a given set of marketing efforts.
divides the market into groups based on age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.
process of offering different products or using different marketing approaches for different age and life-cycle groups.
divides the market based on sex (male or female)
-diving market into different groups based on social class, lifestyle, or personality characteristics
-starbucks vs DD
divides buyers into groups based on their knowledge, attitudes, uses or responses to a product.
· User status
· Usage rate
· Loyalty status
Segmenting International Markets:
· Geographic Location
· Economic Factors
· Political-Legal Factors
· Cultural Factors
divides consumers into groups with similar needs and buying behaviors even though they are located in different countries
· Segment size & growth
· Segment structural attractiveness
· Company objectives and resources
The process of evaluating each market segments attractiveness and selecting one or more segments to enter.
marketing targets the whole market with one offer.
· Mass marketing
· Focuses on common needs rather than what’s different
Target Market Strategies:
· Concentrated marketing targets a small share of a large market
· Limited company resources
· Knowledge of the market
· More effective and efficient
practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
Local marketingIndividual marketing
The goods and services combination the company offers to the target market.
· Classified by how consumers buy them
· Convenience products: frequently bought products
· Shopping products: compares carefully, furniture, cars, appliances
· Specialty products: Medical Services, Designer Clothes, High-end electronics
·Unsought Products: Life insurance, funeral services, blood donations
· Classified by the purpose for which the product is purchased
· Materials & Parts: manufacturing materials (machines)
· Capital Goods: Aid in the buyers productions or operations
· Supplies & Services: operating supplies, maintenance, and business services
Product or Service attributes (features) communicate and deliver the benefits
· Style and design
· Consumer Services
· Private not-for-profit organizations
· Business Services
Links service firm profits with employee and customer satisfaction
Buyers in other countries, including consumers, producers, resellers, and governments.
means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.
· Service differentiation
· Service quality
· Service productivity
creates a competitive advantage from the offer, delivery, and image of the service
refers to the cost side of marketing strategies for service firms
· employee recruiting, hiring, and training strategies
·service quantity and quality strategies
Brand Name Selection, -Desirable Qualities
1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember (Car animals?)
5. Translatable for the global economy
6. Capable of registration and legal protection
· Manufacturer's Brand
· Private Brand
· Licensed Brand
Brand Development Strategies:
· line extension: existing brand name, existing category.
· Multibrand: new product name, existing product category.
· brand extension: existing brand name, new product category
· new brands: new brand name, new product category.
· Involves the creation and testing of one of more physical versions
· Requires and increase in investment.
Company growth by offering modified or new products to current market segments.
systematic search for new product ideas
Sources of new product ideas
· Is it REAL?
· Can we WIN?
· Is it WORTH doing?
The idea that consumers will favor products that are available and highly affordable and that the organization should therefor focus on improving production and distribution efficiency.
The idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefor devote it's energy to making continuous products improvements.
Marketing Strategy Statement Includes:
· Description of the target market
· Value proposition
· Sales and profit goals
review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives.
Types of Test Markets:
· Less expensive
· Restricts access by customers.
departments work closely together individually to complete each stage of the process before passing it along to the next department.
· Increased control in risky or complex projects but may be slow.
innovative development approach that collects, reviews, and evaluates and manages new product ideas.
· Creates an innovation-orientated culture
· Yields a large number of new product ideas.
Product Life Cycle:
Product Development > Introduction > Growth > Maturity > Decline
International Product and Service Marketing Challenges:
· Determining what products and services to introduce to different countries
· Standardization vs. customization
· Packaging, labels, customs, values, laws.
the amount of money charged for a product of service. The sum of all values that consumers give up in order to gain the benefits of having or using a product or service.
· Price is the only element of the four P’s that produces revenue. All other elements represent cost.
The amount of money customers must pay to obtain the product.
understanding how much value consumers place on the benefits they receive from the product and setting a price that captures the value.
uses the buyers perceptions of value, not the sellers cost, as the key to pricing.
· Customer driven
· Cost based pricing is product driven
setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort or risk.
· Adds a standard mark-up to the cost of the product
o All of the companies that provides parts for a product EX- Products sold to apple to create iphone who sells to sprint who sells to buyer
Value delivery network
The network made up of the company, it's suppliers, it's distributors, and, ultimately, it's customers who partner with each other to improve the performance of the entire system.
offer producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operations, intermediaries usually offer the firm than it can achieve.
· Economic view: transform the assortment of products into assortments wanted by customers
disagreement over goals, roles, and rewards by channel members.
· Horizontal conflict
· Vertical conflict
VMS, provide channel leadership and consists of producers, wholesalers, and retailers acting as a unified system and consist of:
· Corporate marketing
· Contractual marketing
· Administered marketing
integrates successive stages of production and distribution under a single ownership
links several stages in the production distribution process.
· Manufactured sponsored retailer
· Manufactured sponsored wholesaler
· Service firm sponsored retailer
Channel Design Decisions:
· Analyzing customer needs
· Setting channel objectives
· Identifying major channel alternatives
· Targeting levels of customer service
· What segments to serve
· Best channels to use
· Minimizing the cost of meeting consumer service requirements.
· Types of intermediaries
· number of marketing intermediaries
· responsibility to channel members
Intensive Distribution: It’s everywhere. (candy, toothpaste, chips, etc.)
Selective Distribution: Not Everywhere. Television Sets, Home Appliances.
Exclusive Distribution: Only sold certain places. Luxury automobiles or prestige clothing.
Exclusive Dealing: seller requires that the sellers not handle competitors products.
Exclusive territorial agreements: where product or seller limit territory.
Tying Agreements: agreements where the dealer must take most or all of the line.
· Channel Systems can vary from country to country
· Must be able to adapt channel strategies to the existing structures within each country
Value = benefit received –(Price+Hassle)
the process by which people select, organize, and interpret information to form a meaningful picture of the world.
Buy goods and services for further processing or use in their production processes
o Gatekeeper (receptionist)
o Users (who uses the product)
o Decider (who decides to purchase the product)
o Influencer (who influences the purchase)
o Buyer (The purchasing agent who does paperwork)
The process by which companies create value for companies and build strong customer relationships in order to capture value from customers in return.
The set of all actual and potential buyers of a product or service.
Changes in markets
Becoming more diverse internationally and locally.
Includes ethnicity, LGBT, and disabled.
More financially cautious buyers greater value.
Right combination of product quality and good service at a fair price.
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
the process of collecting, analyzing, and reporting information that can be used to improve a company's bottom line
The systematic collection, design, analysis, and reporting of data relevant to a specific marketing situation facing an organization.
Information that already exists somewhere, have been collected for another purpose.
Pros: cost, speed, could not get data otherwise.
Cons: not current, accurate, relevant, or impartial
Information collected for the specific purpose at hand
Calls for decisions on research approaches, contact methods, sampling plan, and research instruments.
promotion mix (marketing promotion mix)
2. Sales Promotion
3. Personal Selling
4. Public Relations
5. Direct Marketing
any paid form of nonpersonal presentation and promotion ideas, goods, or services by and identified sponsor
the set of symbols that the sender transmits
nonpersonal communication channels
consumer-to-business (C-to-B) online marketing
Instead of letting the environment define their strategy, craft a strategy that defines your environment.
Aggressive actions to affect forces in the environment.
Watching and reacting to forces in environment.
partnership between two or more companies that allows easier entry into new market.
selling the right to produce products to firms in a foreign market.
companies hire manufacturers to produce their products in another country.
owning facilities in a foreign market.
Developing strategies and practices that create a world economy that the planet support indefinitely.
A principle of sustainable marketing that holds a company should put most of its resources into customer value building marketing investments