Marketing 7th Canadian Edition

1. Marketing7th Canadian Edition

3. Explain what market segmentation is and when to use it. Identify the five steps involved in segmenting and targeting markets. Recognize the different factors used to segment consumer and organizational (business) markets. Know how to develop a market-product grid to identify a target market and recommend resulting actions. Explain how marketing managers position products in the marketplace. Describe three approaches to developing a sales forecast for a company.

4. Had a good night sleep lately? 73 percent of people sleep on their side 22 percent sleep on their back 5 percent sleep on their stomach For a simple product like bed pillows, there is not a “one size/one type fits all”

5. What Market Segmentation Means Market segments Product differentiation Segmentation: Linking Needs to Actions Using Market-Product Grids

6. FIGURE 9-1 Market segmentation links market need to an organization’s marketing program

7. FIGURE 9-2 Market-product grid showing the types of bed pillow segments and their relative sizes as percentage of total market

8. When to Segment Markets One Product and Multiple Market Segments Multiple Products and Multiple Market Segments Segments of One: Mass Customization

9. FIGURE 9-3 The five key steps in segmenting and targeting markets link market needs of customers to the organization’s marketing program.

10. Step 1: Group Potential Buyers into Segments Criteria to Use in Forming the Segments Potential for increased profit and ROI Similarity of needs of potential buyers within a segment Difference of needs of buyers among segments Feasibility of a marketing action to reach a segment Simplicity and cost of assigning potential buyers to segments

11. Step 1: Group Potential Buyers into Segments (cont.) Ways to Segment Consumer Markets Geographic Segmentation Demographic Segmentation Psychographic Segmentation Behavioural Segmentation Usage rate 80/20 rule

12. FIGURE 9-4 Segmentation variables and breakdowns for Canadian consumer markets

13. Ways to Segment Organizational Markets Geographical segmentation Demographic segmentation Behavioural segmentation

14. FIGURE 9-5 Dimensions used to segment Canadian organizational markets

15. Step 2: Group Products to Be Sold into Groups Step 3: Develop a Market-Product Grid and Estimate Size of Markets

16. Step 4: Select Target Markets Criteria to Use in Picking the Target Segments Market size Expected growth Competitive position Cost of reaching the segment Compatibility with objectives and resources Choose the Segments

17. Step 5: Take Marketing Actions to Reach Target Markets Your Wendy’s Segmentation Strategy

18. FIGURE 9-7 Advertising actions to reach specific student segments

19. Two Approaches to Product Positioning Head-to-head positioning Differentiation Product Positioning Using Perceptual Maps Positioning Milk Drinks for Children Repositioning Chocolate Milk for Adults

20. FIGURE 9-8 Using positioning and perceptual maps to increase milk sales to children and adults.

21. FIGURE 9-9 Strategies for positioning dairy drinks for kids and repositioning chocolate milk to reach adults.

22. Market potential or Industry potential Sales forecast or Company forecast Judgements of the Decision Maker Direct forecast Lost-horse forecast

23. Surveys of Knowledgeable Groups Survey of buyers’ intentions forecast Salesforce survey forecast

24. Statistical Methods Trend extrapolation Linear trend extrapolation

25. FIGURE 9-10 Linear trend extrapolation of sales revenues of Acme, made at the start of 2002.

32. The groups that result from the process of market segmentation; these groups ideally (1) have common needs and (2) will respond similarly to a marketing action. Market Segments

33. A strategy with two different but related meanings. Its broadest meaning involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products. Its narrower meaning involves a firm’s selling two or more products with different features targeted to different market segments. Product Differentiation

34. Framework to relate the segment of a market to products offered or potential marketing actions by the firm. Market-Product Grid

35. Quantity consumed or patronage—store visits—during a specific period, varies significantly among different customer groups. Usage Rate

36. A concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers. 80/20 Rule

37. The place an offering occupies in consumers’ minds on important attributes relative to competitive offerings. Product Positioning

38. A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers. Perceptual Map

39. The total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Company Forecast

40. Estimating the value to be forecast without any intervening steps. Direct Forecast

41. The maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms. Industry Potential

42. The pattern is described with a straight line. Linear Trend Extrapolation

43. Starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast. Lost-Horse Forecast

44. Maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms (also called industry potential). Market Potential

45. Changing the place an offering occupies in a consumer’s mind relative to competitive products. Product Repositioning

46. The maximum total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts (also called company forecast). Sales Forecast

47. Asking the firm’s salespeople to estimate sales during a coming period. Salesforce Survey Forecast

48. Asking prospective customers whether they are likely to buy the product during some future time period. Survey of Buyers’ Intentions Forecast

49. Extending a pattern observed in past data into the future. Trend Extrapolation