Chap 9 Flashcards
What is a market?
a group of people with sufficient purchasing power, authority, and willingness to buy
What is a target market?
group of people a firm believes is most likely to buy its goods and services
Define consumer products.
Products bought by ultimate consumers for personal use
Define business products.
Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale.
What is market segmentation?
division of the total market into smaller, relatively homogenous groups
Criteria for effective segmentation:
- market segment must present measurable purchasing power and size
- marketers must find a way to effectively promote and serve the market segment
- segment must be sufficiently large to offer good profit potential
- firm must aim for segments that match its marketing capabilities
Types of Segmenting consumer markets:
Geographic
Demographic
Psychographic
Product-related
Governmental urban classifications (based on # of people):
- Core based statistical area (CBSA)
- Metropolitan statistical area (MSA)
- Consolidated metropolitan statistical area (CMSA)
- Primary metropolitan statistical area (PMSA)
What to marketers focus on from which they draw 40-80% of sales?
core regions
Factors of Demographic Segmentation
.Gender and Age (gender and age lines blurring in recent years) .Income and Occupation .Education .Sexual orientation .Household size .Stage in the family life cycle
What is generation x?
- Born between 1968-1979
- Family-oriented, well educated and optimistic
- TV important marketing tool
- Prefer goods and services that support certain causes
What is the Cohort Effect?
The tendency of members of a generation to be influenced and bound together by significant events in their formative year.
- Veterans
- current cohort (late 70s- early 90s)
- Echo Boomers (children of baby boomers)
Largest ethnic/minority groups in the US
Hispanics/African American
Fastest growing segment of US pop.
Asian Americans
- fastest growing income
What is the Family Lifecycle?
process of family formation and dissolution
- empty nesters are a marketing target
What are “boomerangs”?
grown children who have returned home to live with their parents
What is Engel’s Laws?
As a household income increases:
- small % of expenditures goes for food
- % spend on housing, household operations, and clothing remains constant
- % spend on rec and educ items increases
AIO Statements
Items on lifestyle surveys that describe various Activities, Interests and respondents’ Opinions
VALs framework is based on what two components
?
Roper ASW identifies what 6 psychographic consumer segments?
Strivers
Devouts
Altruists - emphasize social issues and social well-being
Intimates - value family and personal relationships
Fun seekers
Creatives
What is Product-related segmentation?
a division of a population into homogeneous (of the same or similar nature) groups based on their relationships to a product
Process of Market Segmentation (4 criteria)
- Develop a relevant profile for each segment.
- Forecast market potential
- Forecast probable market share
- Select specific market segments
Undifferentiated marketing
focuses on producing single product and marketing it to all customers; mass marketing
Differentiated marketing
focuses on producing several products and pricing, promoting and distributing them with different marketing mixes designed to satisfy smaller segments
Micromarketing
targeting potential customers at very narrow basic levels
Basic determinants of marketing strategy
Company resources
Product homogeneity
Stage in the product lifestyle
Competitors’ strategies
What is positioning?
placing a product at a certain point or location within a market in the minds of prospective buyers
Japanese automaker, Subaru generates more than half its sales in four states. What is the area called?
core region
Most common method of market segmentation is
demographic segmentation (socioeconomic seg)
Which of the following is true of differentiated marketing?
differentiated marketing helps a company to diversify and reach new customers
