Chapter 6 - Done Flashcards
What is a market?
A group of people, who as individuals or as organisations have needs for products in a product class and have the ability, willingness and authority to purchase such products
What is a consumer market?
Purchasers and household members who intend to consume or benefit from the purchased products and do not purchase products to make profits
What is a business market?
Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products or use in general daily operations
What is market segmentation?
The process of dividing a total market into meaningful groups with relatively small product needs and wants
What is a homogeneous market?
A market in which a large proportion of customers are considered to have similar needs and wants
What is a heterogeneous market?
Markets made up of individuals or organisations with diverse needs for products in a specific product class
What is a market segment?
Individuals, groups or organisations with one or more similar characteristics that cause them to have similar product needs
What are the conditions to be met for market segmentation?
- Customer needs must be heterogeneous
- Segments must be identifiable and divisible
- Market segments must be comparable
- At least one segment needs to be worth it
- Company must be able to reach a market segment with a given marketing mix
What are segmentation variables?
The characteristics of individuals, groups or organisations used to divide a market into segments
What are the four characteristics of variables that are often used in segmentation?
Demographic - age, gender, income, education and ethnicity
Geographic - national boundaries, regional districts or even suburban postcode, market density, climate
Psychographic - Motives, lifestyle segments
Behaviouristic - Benefit segmentation
What are some of the variables that can be used to segment business markets?
Geographic location
Type of organisation
Customer size
Product use
What is the target market selection process
- Identify the appropriate targeting strategy
- Determine which segmentation variables to choose
- Develop market segmentation profiles
- Evaluate relevant market segments
- Select specific target markets
What are the different targeting strategies?
Undifferentiated
Differentiated
Concentrated
What is an undifferentiated targeting strategy?
A strategy in which an organisation designs a single marketing mix and directs this strategy at the entire market for a particular product
What is a differentiated targeting strategy?
A strategy where an organisation targets two or more segments by developing a marketing mix for each segment
What is a concentrated targeting strategy?
A strategy in which an organisation targets a single market segment using one marketing mix for one segment
What is mass customisation?
Combines the personalisation and flexibility of custom made products at the level of mass production, which offers a lower unit cost
What is collaborative customisation?
Involves talking to customers to help them recognize what they need, how to fulfill those needs and for the purposes of creating customized products
What is adaptive customisation?
Offers includes one standard product that are supplemented with a few customization options
What is cosmetic customization?
Advertises a standard product differently to different market segments
What is transparent customization?
Provides customized products to individual clients that are produced exclusively for them
What does a market profile do?
Describes the similarities between potential customers within a segment and looks at the differences between people in segments
How does one evaluate a market segment?
Using Sales estimates, Competitive assessment, Cost estimates
What is market potential?
The total amount of a product that customers will purchase within a specified time period at a specific level of industry wide marketing activity
What is customer sales?
It is the maximum percentage of the market potential that an individual company within an industry can expect to obtain for a specific product
What is the breakdown approach to sales potential?
- Marketing manager considers the current market sales as the penetrated market
- The company’s sales potential is then derived from the general economic forecast and estimate of market potential
What is the build-up approach to sales potential?
- Marketing manager begins by estimating how much product a potential buyer in a specific geographic area will buy in a given period
- Then they will multiply that by the total amount of potential buyers in that area
What is competitive assessment?
Assessment of the competition within the market
- How many are there?
- Strengths and weaknesses?
- Do they share or does one dominate?
- Can we go up against the competitors?
- Is it likely that there will be newbies that come into this market?
What are cost estimates?
Estimating the costs and therefore assessing whether the endeavour is worth it
What is product positioning?
Product positioning is creating and maintaining a certain concept of a product in customer’s minds
What is perceptual mapping?
A product’s position is the result of customers’ perceptions of the product’s attributes relative to those of competing brands
How can products be positioned?
There are many different bases for positioning that can be adopted by an organisation such as price, quality, specific products and/or attributes
What is repositioning?
Evaluating the positions of existing products and changing them appropriately if necessary
