Understanding Markets

Identify the major components of a marketing system. Understand how marketers can improve marketing decisions through intelligence systems, marketing research, and marketing decision support systems.

Forecasting and Demand Measurement

Essential Aspects

The market Market demand Company demand and sales forecasts Current demand Future demand

Market Potential market Available market Target market (served market) Qualified available market Penetrated market

Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Market demand Market minimum Market forecast Market potential Nonexpansible vs. expansible markets Primary vs. secondary demand Market forecast Market potential

Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand
Company demand Company sales forecast Sales quota Sales budget Company sales potential

Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Total market potential Area market potential Market-buildup method

Essential Aspects
The market Many Forecasting Methods: Measuring demand Buyer intentions survey Company demand and sales Composite of sales force forecasts opinions Current demand Expert opinion Future demand Past-sales analysis Market-test method

Identifying Market Segments and Selecting Target Markets

Dr. Rakesh Premi

Objectives

Learn how companies identify the segments that make up a market. Understand the criteria companies use to choose the most attractive market segments.

Target Marketing

Target marketing requires marketers to take three major steps: Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences. Market targeting: Selecting one or more market segments to enter. Market positioning: Establishing and communicating the key distinctive benefit(s) of the companys market offering to each target.

Market Segmentation

Mass marketing is losing popularity Micromarketing can be undertaken at four levels: Segment marketing Niche marketing Local marketing Individual marketing

MARKET SEGMENTATION

Dr. Rakesh Premi

Three patterns of preference segments are typically identified: Homogeneous preferences Diffused preferences Clustered preferences

Needs-based Segmentation Process

Needs-based segmentation Segment identification

Segment attractiveness
Segment profitability Segment positioning Segment acid test

Useful market segments share certain characteristics:

Measurable
Substantial

Accessible
Differentiable

Actionable

Bases for Segmentation Geographic Demographic Psychographic Behavioral Nation or country State or region City or metro size Density Climate

Demographic

Age, race, gender Income, education Family size Family life cycle Occupation Religion, nationality Generation Social class

Bases for Segmentation Psychographic Lifestyle Activities Interests Opinions Personality Core values

Bases for Segmentation

Behavioral

Occasions Benefits User status Usage rate Loyalty status Buyer-readiness Attitude

Segmenting Consumer Markets Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics Segmenting Business Markets Situational factors Personal characteristics

Operating variables Purchasing approaches

Demographic variables

Segmenting Business Markets

Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups: Price-oriented customers: best served via transactional selling Solution-oriented customers: best served by means of consultative selling

Strategic-value customers: best served by means of enterprise selling

TARGETING

Market Targeting Strategies

Evaluating and selecting market segments requires assessing the segments overall attractiveness in light of companys objectives and resources. Five patterns of target market selection can then be considered

Market Targeting Strategies

Patterns of Target Market Selection

Single-segment concentration
Selective specialization Product specialization Market specialization Full market coverage