Carmen Baño &Marta Gil Acacio Introduction to Marketing - Final Notes

Unit One:

 What is marketing? Terms and definitions.

- Marketing aims to satisfy customer needs.

- It is more than a business function, it manages profitable costumer relationships
- The main goal is to attract new customers by promising superior value and to keep and grow current
customers by delivering satisfaction.
- It is critical to the success of an organization.

Bagozzi: Marketing as exchange, one of the broadest view of marketing, he contends that any exchange is
marketing.

Arndt: Marketers must concentrate on doing what they do best, which is matching supply and demand, moving the
customer from need to want to demand.

Needs: human needs are states of felt deprivation, you cannot create them.
Wants: human needs shaped by culture and personality.
Demands: when backed by a buying power, wants become demands.

Marketing definitions:

AMA: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and
services to create exchanges that satisfy individual and organizational objectives.

Kotler and Armstrong (K,A): social and managerial process by which individuals and groups obtain what they need
and want, through creating and exchanging products and value with others.

Kotler: marketing is meeting needs (and wants) profitably.

Marketing offers: some combination of product, services, information, or experiences, offered to a market to satisfy
a need or a want.
A product is anything that can be offered to a market which satisfies a need or a want, it may be a good (physical) or
a service (intangible), it might also be both.

Value: it’s the difference between the value of the costumer gains from owning and using a product and the cost of
obtaining it. A value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their
needs.

Customer satisfaction: depends on how well the product lives up to the customer expectations.

Perception: a satisfied consumer is one who perceives your product to be of value and to have satisfied the need.

Marketing myopia: the sellers’ mistake of paying more attention to the specific products they offer instead of the
benefits and experiences produced by these products.

Exchange: act of obtaining a desired object from someone by offering something in return.

Transaction: a trade of value between the parties.

Market: the entire set of actual or potential people or organizations who might or will buy or obtain your product
offering.

Marketing is about building and maintaining exchange relationships with target audiences.

Selecting Customers to Serve: sometimes it’s needed to demarket a good or service, which means to reduce or shift
the demand for the particular product or service.

 Marketing Management: the art and science of choosing target markets and building profitable
relationships with them.

Orientations: there are five alternative concepts under which organizations design and carry out their marketing
strategies.

- Production concept: if demand is high, keep producing enough to reduce the cost of producing it.
- Product concept: consumer will favor products that offer the most quality, performance, features…
- Selling concept: companies must undertake large scales and promotion effort in order to make their
consumers buy.
- Marketing concept: determining needs and wants of target markets delivering the desired satisfaction.
Customer focus and value are the path to sales and profit.
- Societal Marketing concept: marketing should improve the consumer and society’s well-being.

 Customer Relationship Management

CRM: the process of building and maintaining profitable customer relations by delivering superior customer value
satisfaction.

Customer lifetime value: the value of the total purchases that a customer would make over a life time of patronage.

Customer perceived value: the difference between total customer value and total customer cost.

Customer satisfaction: the extent to which a product’s perceived performance matched a buyer’s expectations.

Share of customer: share of the customer purchasing in their product categories. Share of wallet, travel…

Customer equity: the total combined customer lifetime values of all company’s customers. The goal is to build the
right relationships with the right customers.
Butterflies: potentially profitable but not loyal. Good fit between the company’s offerings and their needs.
True friends: both profitable and loyal. There is a strong fit between their needs and the company’s offerings.
Barnacles: highly loyal but not profitable. There is a limited fit between their needs and the company’s offerings.
Strangers: low profitability and little loyalty. There is little fit between the company’s offerings and their needs.

Major trends that are changing the marketing landscape:

Marketing in the crisis: the challenge is to balance the brand’s value proposition with the current times while also
enhancing its long-term equity.

The growth of not-for-profit marketing: it can help them attract membership, funds, and support.

Sustainable marketing: customers expect companies to deliver value in a socially and environmentally responsible
way.

Rapid globalization: almost every company is touched somehow by global competition; they have developed truly
global operations and are also sourcing more supplies and components abroad. This means managers are
increasingly taking global competitors and opportunities.

The digital age: emarketing

The shopping experience will continue to change as many retailers reduce their physical presence and invest more in
experiential, digital-enabled spaces.

 Unit Two:

Strategic planning: Process of developing and maintaining a fit between the company´s goals and capabilities and
the marketing opportunities.

First there is a mission which is later transformed into supporting objectives.

Portfolio of the business: Marketing planning occurs at the business unit product and marketing levels.

STEPS: 1. Defining the mission

2. Setting objectives and goals

3. Designing the business portfolio

4. Planning marketing and other functional strategy: Business unit, product and market level.
Inside the steps:

MISSION: what it wants to accomplish in the larger environment. Acts like and invisible hand that guides the
organization. It defines the basic customer’s needs. The statements should be meaningful and specific. Needs to
have the company’s strengths in it.

Characteristics of a mission: Specific, Realistic, Motivating, Centered on the customer, Good Fit with Marketing
Environment, Based on Distinctive competencies.

A mission statement should answer: What is the business, who is the customer, what is the value, what will your
business be and what should it be?

OBJECTIVES: Based on the corporate or general ones. They are multiple, all between primary and secondary
objective.

Characteristics of objectives: clear, concise, written, hierarchized in importance, quantified, realistic, consistent and
coherent. It needs to manage profitable growth. Identify, evaluate and select market opportunity.

BUSINESS PORTFOLIO: Collection of business and products that make up the company.

Developing Strategies for growth and downsizing:

- Identify growth opportunity is the product/ market expansion grid.

- Market penetration: more sales to current customers without changing its original product.
- Market development: new product to same customers.
- Product development: is defined as offering modified or new products to current market.
- Diversification: starting up or buying business beyond its current products and market. Example: Starbucks is
entering the health and wellness.

Marketing DEFINITIONS:

Kotler: Marketing is meeting needs and wants profitably.

AMA: Creating, communicating and delivering value to consumers and managing customer relationship to benefit
organization and stakeholders.

STRATEGIC MARKETING: The process that pursues the knowledge of customers/consumers needs and the
estimation of the potential of the company and its competitors (market oriented) to achieve a competitive
advantage sustainable over time that can be defended over competitors.

Strategic 5 C´s: Company, customer, competitors, collaborators and context.

Marketing strategy: Maximum positive differentiation over competition in meeting consumer’s needs.

Marketing´s role in strategic planning:

1. Provide guiding philosophy: marketing concept of building profitable relationships with important consumer
groups.
2. Helps identify attractive market opportunities.
3. Marketing designs strategies for reaching the unit´s objectives.
4. Customer value is the key ingredient.
Objectives of strategic marketing:

1. Monitor the environment and analyze competitors

2. Anticipate changes in the business in order to adapt to them
3. Identify new segments or niches
4. Develop new product concepts
5. Enlarge or reduce product portfolio
6. Find sustainable competitive advantage.

STRATEGIC MARKETING OPERATIONAL MARKETING

Analytical process starting with the analysis
of insights and needs.
Mid and long term oriented.
Leads to strategic Marketing Plan.
Done by Marketing Leadership.
High risk and uncertainty.
It is more relevant.
Finality is to conquer markets and sell
products.
Short and mid-term oriented actions.
Leads to the Operational Marketing Plan.
Done by Marketing Middle Management.
Lower risk and uncertainty.
It is more urgent.

SURVIVAL MATRIX:

STRATEGIC MARKETING
Suitable Inadequate

3
Effective 1 success
slow
death
2
4
Ineffective problem
quick
Partner relationship management: death
Marketing cant produce superior value for customers. For this, there is a
necessity to form an internal value chain. To create one there are five steps:

- Obtain raw materials.

- Transform raw materials into products.
- Combine simpler products to more complex ones
- Distribution to customers
- Interacting: Only performed by the customers, involving undertaking activities required in obtaining the
product.

Planning Cost- Functional Strategies: A company aims to meet needs of a firm at a profit, but it must do so by
ensuring that the whole organization functions as a team.
Marketing process: Demand forecasting, segmentation, target and positioning.

4 P´s lead to 4 C´s:

1. Product- Customer Solution
2. Price- Customer Cost
3. Place- Convenience
4. Promotion- Communication

Managing marketing: Analysis, Planning (Develop strategic plans), Implementation and control (measure, evaluate
and take corrective action).

- Marketing analysis: market research.

- Marketing planning: Deciding on marketing strategies to help reach objectives.
- Market Department Organization: Different to each company
- M. control: Measure the results and evaluate the results. Some environment are controllable meanwhile
others aren’t.

Company

SBU: One or several related product markets that satisfy a common market needed. It should have: a mission, group
of competitors, marketing plan and a specific management with resource allocations.

PM: PRODUCT MARKET: Three dimensions:

Who(target) – What (needs, functions) – How (process, raw materials, products attributes).

Unit Three:

 Marketing Environment:

Marketing environment: the actors and forces outside marketing that affect marketing management’s ability to
build and maintain successful relationship with target consumers. The marketing environment consists of a
microenvironment and a microenvironment. Companies constantly watch and adapt to the changing environment
and meet new marketplace challenges and opportunities.

 Marketing MICRO Environment: actors close to the company that affect its ability to serve its consumers

Company: all the interrelated groups within a company form an internal environment and should work together in
harmony. All departments share responsibility for understanding customer needs and creating customer value and
satisfaction.

Suppliers: They provide the resources needed by the company to produce its goods and services. Supplier problems
can seriously affect marketing. Marketing managers must watch supply availability and costs (avoid: supply
shortages, delays, labor strikes, natural disasters, other events…)

Intermediaries: They help the company promote, sell and distribute its products to final buyers. The company must
partner effectively with marketing intermediaries to optimize the performance of the entire system.

1.Resellers: distribution channel firms that help the company find customers or make sells to them.

2.Physical distribution firms: help the company stock and move goods from their points of origin to their
destinations.
 3.Marketing services agencies: the marketing research firms, advertising agencies, media firms… target and
promote products and services to the right markets.

4.Financial intermediaries: banks, credit companies, insurance companies,… help finance transactions or
insure against the risks associated with the buying and selling of goods.

Marketers gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the
minds of consumers.

Competitors: companies offering your target market similar goods and services.

1.Generic competition: the generic market is narrower, the competitors offer substitute goods which may
be very different physically and conceptually from yours but which meet a common need.
2.Product competition: the products are more similar, either physically or conceptually and your category
gets narrower.
(distant product competitors, close product competitors)

Publics: a public is any group that has an actual or potential interest in or impact on an organizations’ ability to
achieve its objectives.

1.Financial publics: this group influences the company’s ability to obtain funds.
2.Media publics: this group carries news, features, and editorial opinion…
3. Government publics: management must take government developments into account.
4.Citizen-action publics: a company’s marketing decisions may be questioned by consumer organizations,
environmental groups, minority groups, and others.
5.Local publics: this groups includes neighborhood residents and community organizations.
6.General public: a company needs to be concerned about the general public’s attitude toward its products
and activities.
7.Internal publics: this group includes workers, manager, volunteers and the board of directors.

Customers: are the most important actors in the company’s microenvironment.

1. Consumer markets: individuals and households that buy goods and services for personal consumption.

2. Business markets: buy goods and services for further processing or use in their production process.

3. Reseller markets: buy goods and services to resell at a profit.

4. Government markets: government agencies that buy goods and services to produce public services or
transfer the goods to others who need them.

5. International markets: these buyers in other countries (consumers, producers, resellers and
governments).
  Marketing MACRO environment: larger societal forces that affect the microenvironment.

Demographic environment: how many, where they live, how densely populated, age, sex, race, occupation…All
these factors have a major impact on marketing.

Economic environment: economic factors that affect consumer purchasing power and spending patterns. Marketers
must pay close attention to major trends and consumer spending patterns both across and within their world
markets(some countries have industrial economies, other subsistence economies and others developing
economies).

Natural environment: shows three major trends; shortages of certain new materials, higher pollution levels and
more government intervention in natural resource management.

Technological Environment: is perhaps the most dramatic force now shaping our destiny. Technology has released
such wonders as antibiotics, robotic surgery, smartphones, etc. However, every new technology replaces an older
technology. Companies that fail to keep up with technological change will miss out on new product and marketing
opportunities.

Cultural Environment: consists of institutions and other forces that affect a society’s basic values, perceptions,
preferences, and behaviors. People grow up in a particular society that shapes their basic beliefs and values. They
absorb a worldview that defines their relationships with others. Core cultural values are hard to change; marketers
find it easier to change secondary values.

Political and Social Environment: governments develop public policy to guide commerce—sets of laws and
regulations that limit business for the good of society as a whole. Almost every marketing activity is subject to a wide
range of laws and regulations. Beyond written laws and regulations, business is also governed by social codes and
rules of professional ethics.

Responding to the environment:

- Many companies view the marketing environment as an uncontrollable element to which they must react
and adapt. They passively accept the marketing environment and do not try to change it.
- Other analyze environmental forces and design strategies that will help the company avoid the threats and
take advantage of the opportunities the environment provides.
- Taking an Environmental Management Perspective means the firm will take aggressive steps to affect the
environments in which it operates rather than waiting to be affected by those environments. Such
companies hire lobbyists to influence legislation affecting their industries and stage media events to gain
favorable press coverage.
- Whenever possible, smart marketing managers take a proactive rather than reactive approach to the
marketing environment.
SWOT MATRIX:

Strategic analysis can be summarized using the SWOT matrix. The goal is to match the company ś strengths to
attractive opportunities in the environment, while eliminating or overcoming the weaknesses and minimizing the
threats.

It includes environmental elements and company situation (for a SBU or P/M) and thus is the basis of diagnosis.
These are dimensions that represent market attractiveness (external) and competitive position (internal).

For the company situation (internal dimension) we analyze:

Strengths (S): internal capabilities that may help a company reach its objectives.
Weaknesses (W): internal limitations that may interfere with a company ability to achieve its objectives.

Regarding the environment (external dimension) we analyze:

Threats (T): current and emerging external factors that may challenge the company’s performance.
Opportunities (O): external factor that the company may be able to exploit to its advantage.

Vulnerability analysis: The most difficult situation is when weaknesses match the threats, therefore strategic actions
are required to survive.
Potentiality analysis: The most positive situation is when there is correspondence between strengths and
opportunities, therefore strategic actions should be taken to attack and profit the situation.

 Unit Four:

Marketing Research: systematic design collection, analysis and reporting or data relevant to specific marketing
situation facing and organization.

Marketing information system MIS: The people, equipment and procedures to gather, sort, analyze, evaluate and
distribute, needed, timely, and accurate information to marketing decision.

Internal database: Electronic collection of info obtained from data sources within the company.

Secondary data: info that already exist somewhere that has been collected for any purpose.

Primary data: Info collected for a specific purpose at hand.

Sample: A segment of population collected for marketing research to represent population as a whole.

Deductive thinking: reasoning from general known premises to specific conclusions which must follow, to figure out
how things work, what things are.

Inductive thinking: reasoning from limited specific observations to arrive at general conclusions, to generate new
concepts.

Marketing intelligence: the systematic design collection and analysis of publicly available info about competition and
developments in marketing.

MIS ( Marketing information system): Starts and ends with customer insight. Two basic rules for all Marketing
research:

 Know exactly what the information is for

 Be precise: Formulate the right questions the appropriated way, if not cannot trust the input.
Quantitative vs Qualitative:

 QUANTITATIVE: Numerical data of information that can be reported into numbers. It focuses more in
counting and classifying features and constructing statistical models and figures to explain what is observed.
 QUALITATIVE: Non numerical data. It focuses more verbal data. Information that is gathered is then
analyzed in a interpretative manner, subjective, impressionistic or diagnostic. Aim is to provide a complete,
detailed description of the research topic.

QUALITATIVE QUANTITATIVE
FOCUS Quality Quantity
DATA Words Numbers
INSTRUMENTS Researcher, interview Test, observations and
observations, documents, questionnaire
questionnaire.
SAMPLE Small, non random Large random
DESIGN Flexible Predetermined
AIM Understand in depth Generalize
FINDINGS Comprehensive, richly Precise, numerical
descriptive

Marketing Research Evolution: Example ford car:

Sales Driven: Ford said the could have the car they wanted as long as it was black.

Customer Driven: What color did the customer want most? Companies competed to figure it out.

Market driven: Company´s try to work together with the customer to decide whether the color is important and if
so, which color should be chosen.

Marketing Research Process:

- Defining the problem and research objectives: Need to know goals. Most important step.
- Developing research plan for collecting information: research objectives are translated into specific
information needs, exploratory research to write preliminary info and do a written plan.
- Implement the research plan collecting and analyzing the data.
- Interpreting and reporting the findings; not only should researchers do it, input from various areas.
 RESEARCH APPROACHES
Observational research
Experimental research
Ethnographic research.
Survey (most widely used)
USED FOR DONE WITH
Gathering exploratory data Mechanical observations
on relevant people, actions with machine or computer,
and situations. meters, diaries, checkout
scanners…
Gathering causal Matched groups of subject,
information. control groups and
experimental treatments.
Intense observation Living/working with people
and learning from them
Gathering descriptive Knowledge, attitudes,
information preferences and buying
behavior.

5 methods of marketing research:

1. SURVEYS: with questionnaires you may analyze a sample group by surveys. The larger your group is, the
more reliable. Type of surveys: mail, in telephone, person, online( unreliable).
2. Focus groups: scripted series of questions or topics which lead to a discussion in teams.
3. Personal interviews: unstructured open questions. More subjective opinions. Great to uncover issues related
to service development and new products.
4. Observation: Individual responses to surveys and focus groups are sometimes at odds with people´s actual
behavior. When you observe by videotaping or at home they are different.
5. Field test: new product in selected stores to test customers.

Unit Five:

 Consumer markets:

Definition: All the individuals and households that buy or acquire goods and services for personal consumption make
up the consumer market. Consumers around the world vary tremendously in age, income, education level, and
tastes. They also buy an incredible variety of goods and services. How these diverse consumers relate with each
other and with other elements of the world around them impacts their choices among various products, services,
and companies.

“Consumer” the “person” (individual or familiar) who acquires goods or services for direct use or ownership.

“User” is the final user, who does not have to be necessarily the consumer.

Buying roles: there are different buying roles within the decision-making unit: iniciator, influencer, decider, buyer
and user(s).

Model of Consumer Behavior

Consumers make many buying decisions every day, and the buying decision is the focal point of the marketer’s
effort.

Most large company’s research consumer buying decisions in great detail to answer questions about what
consumers buy where they buy, how and how much they buy, when they buy, and why they buy.

But learning about the whys of consumer buying behavior is not so easy — the answers are often locked deep within
the consumer’s mind. Often, consumers themselves don’t know exactly what influences their purchases.

How do consumers respond to various marketing efforts the company might use? Marketing stimuli consist of the
four Ps: product, price, place and promotion.
Other stimuli include major forces and events in the buyer’s environment: economic, technological, social, and
cultural.

All these inputs enter the buyer’s black box, where they are turned into a set of buyer responses.

Marketers want to understand how the stimuli are changed into responses inside the consumer’s black box, which
has two parts:

Buyer’s characteristics: influence how the person perceives and reacts to stimuli.

Buyer’s decision process: affects the person’s behavior.

Four types of buying behavior:

The buyer’s decision process:

It consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision and
postpurchase behavior.

The buying process starts long before the actual purchase and continues long after.

Everyone goes through the five stages though sometimes we can pass them quicker or slower or even skip some of
them in routine purchases.

Much depends on the nature of the buyer, the product and the buying situation.

- Postpurchase behavior: the consumer will be satisfied or dissatisfied. The larger the gap between
expectations and performance, the greater the consumer’s dissatisfaction. Sellers should promise only what
their brands can deliver.

Buyer’s decision process for new products: adoption process. It’s the mental process through which an individual
passes from learning about an innovation to the final adoption. Stages in the adoption process:

Awareness: the consumer becomes aware of the product but lacks information from it.
Interest: the consumer seeks information of the product.
Evaluation: consideration of whether to try or not the product.
Trial: the consumer tries the new product on a small scale to estimate its value.
Adoption: the consumer decides to make full and regular use of the new product.
Differences in innovativeness:

The five adopter groups have differing values:

1. Innovators are venturesome—they try new ideas at some risk.

2. Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early
but carefully.

3. The early mainstream is deliberate—although they rarely are leaders, they adopt new ideas before the average
person.

4. The late mainstream is skeptical—they adopt an innovation only after a majority of people have tried it.

5. Finally, lagging adopters are tradition bound—they are suspicious of changes and adopt the innovation only when
it has become something of a tradition itself.

Product characteristics on rate of adoption:

1. Relative advantage: The degree to which the innovation appears superior to existing products.

2. Compatibility: The degree to which the innovation fits the values and experiences of potential consumers.

3. Complexity: The degree to which the innovation is difficult to understand or use.

4. Divisibility: The degree to which the innovation may be tried on a limited basis.

5. Communicability: The degree to which the results of using the innovation can be observed or described to others.

 Business Markets:

Definition: comprises all organizations that buy goods and services for use in the production of other products
and services or for the purpose of reselling or renting them to others at a profit.

Business – to – business (B – to - B): marketers must do their best to understand business markets and business
buyer behavior

The business market is huge. In fact, business markets involve far more dollars and items than do consumer
markets.

Industrial markets characteristics vs. consumer markets:

1. Fewer but far larger buyers

2. Buyers concentrated geographically
3. Derived demand — it ultimately derives from the demand for consumer goods.
4. Inelastic and more fluctuating demand.
5. More decision participants and a more professional purchasing effort
6. More complex buying decisions
7. Process also tends to be longer and more formalized
8. Buyer and seller are often much more dependent on each other
9. Supplier development, systematically developing networks of supplier-partners to ensure a dependable
supply of products and materials that they use in making their own products or reselling to others.
 Participants in the Business Buying Process:
1. Users are members of the organization who will use the product or service.

2. Influencers often help define specifications and also provide information for evaluating alternatives.

3. Buyers have a formal authority to select the supplier and arrange terms of purchase. Buyers may

Help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex
purchases, buyers might include high – level officers participating in the negotiations.

4. Deciders have formal or informal power to select or approve the final suppliers.

E-procurement: online purchasing.

Benefits: saves transaction costs, reduces time, eliminates the paperwork and frees people to focus on more-
strategic issues.

Problems: potential security concerns and can erode customer-supplier relationships.

Institutional Markets:

Schools, hospitals, nursing homes, prisons… These markets can be huge, many are characterized by low budgets
and captive patrons.

Government Markets:

Offer large opportunities for many companies. They typically require suppliers to submit bids and tend to favor
domestic suppliers over foreign suppliers. Some companies have established customized marketing programs for
government buyers.

 Unit Six:

Most companies have moved away from mass marketing to target marketing. Instead of scattering their marketing
efforts (shotgun approach) they are focusing on the consumers who actually have interest on the values they create
best (rifle approach).

Segmenting: Dividing the market into groups of people with homogenous needs that can be treated in different
commercial forms.

Market segment: Group of customers who share similar set of needs and wants.

Marketers usually use multiple segmentation instead of settling to one market segment.

It helps to identify and understand in a better way the key customer more efficiently and tailor market to their
needs.

Objectives of segmentation:

- Identify opportunities for new products and services development.

- Design the most effective marketing programs to reach more homogeneous groups of clients.
- Improve the strategic allocation of marketing resources.

Market segmentation: Divide a market into smaller groups of buyers with distinct needs, characteristics or
behaviors.
Market targeting: It consist of evaluating each market segment´s attractiveness and selecting one or more market
segments to enter.

Differentiation: involves differentiating the firms market offering to create a superior customer value.

Positioning: arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing
products in the minds of target consumers.

Segmentation variables: geographic, demographic, physiographic and behavioral.

What are the products considered? LATS, DINKIES, BOBOS AND NYLON.

Segmentation process:

- Define the variable to be explained.

- Select explanatory variables: segmentation criteria
- Validate Segments
- Choose the target markets

SEGMENTS VALIDATION:

Markets segments in order to be useful should be: measurable, accessible, adequate, differentiable, actionable and
substantial.

- Measurable: size, purchasing power, characteristics of segments in terms of purchasing behavior.

- Accessible: be able to undertake the marketing decisions selected.
- Adequate: adequate for the company´s objectives and resources.
- Differentiable: maximize the difference between other groups (condition of heterogeneity) and minimize
differences between buyers inside each group (condition of homogeneity).
- Substantial and stable segment: enough potential to justify the development of a specific marketing
strategy that last through enough time.

EVALUATING MARKET SEGMENTS:

Three time factors a firm must look into:

- Segment size and growth

- Segment structural attractiveness
- Company objectives and resources
If a segment is less attractive, the consequences are:

- Strong aggressive competitors

- Easy for new entrants
- Many potential substitute products.
- Relative power of buyers
- Contains powerful suppliers

Companies can segment international markets using one or a combination of variables: such as geographic location,
economic, politic, cultural or legal factors.

Intermarket segmentation = cross- market segmentation: Marketers form segments of consumers who have similar
needs and buying behaviors.

Target market: consist of a set of buyers who share common needs or characteristics that the company decides to
serve.
Companies may get:

- Very broadly: Undifferentiated marketing

- Very narrowly: Micromarketing
- In between: Differentiated or concentrated marketing.

Full market coverage strategy: both undifferentiated and differentiated marketing.

Concentration strategy:

- Market niche and specialization.

- Firm goes after one or few smaller niches.
- In order to achieve a strong market position, it needs to know its consumers needs and special reputation it
acquires.
- It can be highly profitable but also involves higher than normal risks.
- It is often used by small and medium enterprises.

Undifferentiated marketing: A firm might decide to ignore the market segment differences and target the whole
market with one offer. This strategy is used when there is a need of customer. They are standardized products (scale
economies) but face the risk of counter segmentation.

Differentiated marketing: Firm decides to target several market segments and designs separate offers for each. It
increases costs and also manifest a risk of hyper-segmentation.

Market niche strategy: Is a micro segment, very specific segment.

Niching lets smaller companies focus on their limited resources.

Market gap: complex and specific set of needs. The leader firm is normally not vulnerable to competitors´ attacks.
This technique is increasing more frequent.

PROBLEM: Gap is the narrower, fewer potential buyers will stay and in consequence, the potential benefit will be
lower.

Specialization strategy: Selective, product and market specialization.

Micromarketing: The practice of tailoring products and marketing programs to suit the tastes of the specific
individuals and locations. They see the individual in every customer rather than a customer in every individual. It
includes:

- Local marketing: brands and promotions to the needs and wants of local customers groups like cities,
neighborhoods and specific stores.
- Individual marketing: It is located in the extreme. Tailoring products and marketing programs to the needs
and preferences of the individual customers. It is also labeled as one to one marketing, mass customization
and markets of one marketing.