2. MARKETS
A market is a group of
individuals and/or
organizations that have a
desire or need for products in
a product class and have the
ability, willingness, and
authority to purchase those
products.
4. MARKETS
• 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.
• Also known as business-to-consumer (B2C) markets
5. MARKETS
• A 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, or
use in daily operations.
• Also known as business-to-business (B2B) markets and can
be sub-classified into producer, reseller, government, and
institution markets
6. TARGET MARKET
SELECTION PROCESS
• Selecting a target market is the first of two major
components of developing a marketing strategy.
• Marketers may employ several methods for target market
selection, generally they follow a five-step process.
8. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
• A target market is a group of people or organizations for
which a business creates and maintains a marketing mix
specifically designed to satisfy the needs of group members.
• The marketing strategy used to select a target market is
affected by target market characteristics.
9. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
• Undifferentiated Targeting Strategy
• A strategy in which an organization designs a single marketing
mix and directs it at the entire market for a particular product
• Assumes that all customers in the target market have similar
needs, and thus the organization can satisfy most customers
with a single marketing mix with little or no variation.
10. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
• Undifferentiated Targeting Strategy
• Effective under two conditions: First a large proportion of
customers in a total market must have similar needs for the
product, a situation termed a homogenous market
• Second, the organization must have the resources to develop a
single marketing mix that satisfies customers’ needs in a large
portion of a total market
11.
12. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
Concentrated Targeting Strategy through Market
segmentation
› Sometimes, a market maybe comprised of individuals or
organizations with diverse product needs is called a
heterogeneous market. For this type of market, market
segmentation is the best approach. It is the process of
dividing a total market into groups with relatively similar
product needs to design a marketing mix that matches those
needs.
13. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
Concentrated Targeting Strategy through Market
segmentation
› A market segment consist of individuals, groups, or
segments that consist of people or organizations with
relatively similar product needs.
› The rationale for segmenting heterogeneous markets is that a
company will be most successful in developing a satisfying
marketing mix for a portion of a total market whose needs
are similar.
14. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
• Concentrated Targeting Strategy through Market
segmentation
• When an organization directs its marketing efforts towards a
single market segment using one marketing mix, it is using
concentrated targeting strategy.
15.
16. STEP 1 IDENTIFY THE
APPROPRIATE TARGETING
STRATEGY
• Differentiated Targeting Strategy through market
segmentation
• A strategy in which an organization targets two or more
segments by developing a marketing mix for each segment.
• A benefit of a differentiated approach is that a firm may
increase sales within the total market because its marketing
mixes are aimed at more customers.
17.
18. STEP 2: DETERMINE WHICH
SEGMENTATION VARIABLES
TO USE
• Segmentation variables are characteristics of individuals,
groups, or organizations, used to divide a market into
segments.
19. STEP 2: DETERMINE WHICH
SEGMENTATION VARIABLES
TO USE
Demographic Variables
› Age
› Gender
› Race
› Ethnicity
› Income
› Education
› Occupation
› Family size, family life cycle
› Religion
› Social class
20. STEP 2: DETERMINE WHICH
SEGMENTATION VARIABLES
TO USE
Geographic variables
› Region
› Urban, suburban or rural
› City size
› Country size
› Market density – number of potential customers within a unit
of land area
› Climate
› Terrain
› Micromarketing – an approach to market segmentation in
which organizations focus precise marketing efforts on very
small geographic markets
21. STEP 2: DETERMINE WHICH
SEGMENTATION VARIABLES
TO USE
• Psychographic variables
• Personality attributes
• Motives
• Lifestyles
22. STEP 2: DETERMINE WHICH
SEGMENTATION VARIABLES
TO USE
• Behavioristic variables
• Volume usage
• End use
• Benefit expectations
• Brand loyalty
• Price sensitivity
24. STEP 3 – DEVELOP MARKET
SEGMENT PROFILES
• A market segment profile describes the similarities among
potential customers within a segment and explains the
differences among people and organizations in different
segments.
• A profile may cover aspects such as demographic
characteristics, geographic factors, product benefits sought,
lifestyles, brand preferences, and usage rates.
25. STEP 3 – DEVELOP MARKET
SEGMENT PROFILES
• Marketers use market segment profiles to assess the degree
to which their products fit potential customers’ product
needs.
26. STEP 4 – EVALUATE RELEVANT
MARKET SEGMENTS
• After analyzing the market segment profiles, a marketer
should be able to narrow his or her focus to several
promising segments that warrant further analysis.
27. STEP 4 – EVALUATE RELEVANT
MARKET SEGMENTS
• Sales Estimates
• Market potential – total amount of a product that customers
will purchase within a specified period at a specific level of
industry-wide marketing activity.
• Company sales potential – maximum percentage share of a
market than an individual firm within an industry can expect to
capture for a specific product.
28. STEP 4 – EVALUATE RELEVANT
MARKET SEGMENTS
• Sales Estimates
• Two general approaches that measure company sales potential
are breakdown and buildup.
• Breakdown – marketing manager first develops a general
economic forecast for a specific period
• Buildup – marketing managers begins by estimating how
much of a product a potential buyer in a specific area will
purchase
29. STEP 4 – EVALUATE RELEVANT
MARKET SEGMENTS
• Competitive Assessment
A market segment that initially seems attractive, but it will also be
attractive for other companies.
• Cost Estimates
• To fulfill the needs of a target segment, an organization must
develop and maintain a marketing mix that precisely meets the
wants and needs of that segment, which can be expensive.
30. STEP 5 – SELECT SPECIFIC
TARGET MARKETS
• Selecting appropriate target markets is important to an
organization’s effective adoption and use of the marketing
concept philosophy.
• Identifying the right target market is the key to
implementing a successful marketing strategy.
• Failure to do so can lead to low sales, high costs, and severe
financial losses.
31. DEVELOPING SALES
FORECASTS
• Sales Forecast – the amount of a product a company
expects to sell during a specific period at a specified level of
marketing activities.
• Executive judgment – forecasting method based on the
intuition of one or more executives
• Customer forecasting survey – a survey of customers
regarding the types and quantities of products they intend to
buy during a specific period
32. DEVELOPING SALES
FORECASTS
• Sales Forecast
• Sales Force forecasting survey – firm’s salespeople estimate
anticipated sales in their territories for a specific period.
• Expert forecasting survey – hires professionals to help
prepare the sales forecast.
• Delphi method – 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.
33. DEVELOPING SALES
FORECASTS
• Time Series Analysis
• The forecaster uses the firm’s historical sales data to discover
a pattern or patterns in sales over time.
34. TIME SERIES ANALYSIS
• Trend Analysis
• Focuses on aggregate sales data, such as 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
35. TIME SERIES ANALYSIS
• Cycle Analysis
• Analyzes sales figures for a three- to five-year period to
ascertain whether sales fluctuate in a consistent, periodic
manner
36. TIME SERIES ANALYSIS
• Seasonal analysis
• Study daily, weekly, or monthly sales figures to evaluate the
degree to which seasonal factors, such as climate and holiday
activities influence sales
37. TIME SERIES ANALYSIS
• Random factor analysis
• Forecaster 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
38. REGRESSION ANALYSIS
• Uses historical sales data.
• Seeks to find a relationship between past sales and one or
more variables, such as population, per capita income, or
gross domestic product.
39. MARKET TESTS
• Involves making a product available to buyers in one or
more test areas and measuring purchases and consumer
responses to the product, distribution, promotion, and price.
