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target market selection process

1) i.d. appropriate targeting strategy
2) determine which segment variable to use
3) develop market segment profiles
4) evaluate relevant market segment
5) select specific target markets

undifferentiated strategy

defines ENTIRE market for a certain product as its target market

1) market must be homogenous
2) co. must maintain a SINGLE marketing mix to satisfy their costumer needs

heterogenous markets

ppl have diverse product needs

effective segmentation

1) customer needs are heterogenous
2) segment is i.d.-able and divisible
3) 1+ segment has profit potential
4) co. has to be able to reach that chosen segment!

concentrated targeting strategy

advantages:
1) can generate LARGE sales volume w/ a single segment
2) co. w/ few resources can compete w/ larger co.'s

disadvantages:
if segment's D for product decreases, so will co.

differentiated targeting strategy

target 2+ segments, make marketing mix for each segment

advantages:
obvious

disadvantages:
1) MORE production processes, materials, skills = HIGHER production costs
2) HIGHER marketing costs

demographic variables

age, race, income, educ., etc.

geographic variables

urban/rural, climate, etc.

psychographic variables

personality, motives, lifestyle, BEHAVIORISTIC (how consumer _uses_ the product

market segment profile

talks about similarities b/w potential customers, & diff b/w other market segments

market potential

total amount of a product for ALL firms in an industry which customers will purchase w/in a specified period

breakdown approach

sales estimate
measures co. sales potential based on general economic forecast

buildup approach

measures co. sales potential by est. HOW MUCH a potential buyer will purchase in a given time period

product positioning

decisions & activities to create a certain CONCEPT of a product in customers _minds_

perceptual mapping

questioning a sample of consumers about their perceptions of products, brands, etc. w/ 2+ dimensions

bases for positioning

1) head-to-head
2) position to avoid competition (when your product is unique, or even when it's really similar)
3) avoiding competition when you want to avoid CANNiBALIZING your own product that's in the market

repositioning

physically changing product, its P, distrib., promotion, aiming it at a different target market, etc.

time series analysis

use historical data to discover a patter

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