Involves two steps: identifying groups of people (or organizations) with certain shared needs and characteristics and aggregating (combining) these groups into larger market segments according to their interest in the product's utility.
To group consumers by purchase behavior.Variables include user status, usage rate, purchase occassion, and benefits sought.
potential users, nonusers, ex-users, regulars, first-timers, and users of competitors' products.
A method of segmenting markets on the basis of when consumers buy and use a good or service.
The process of grouping customers into market segments according to the benefits they seek from the product
segmenting markets by region of a country or the world, market size, market density, or climate
dividing a market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.
the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics
dividing the market into smaller groups based on consumer attitudes, personality, interests, values, and lifestyles
consumers are inspired by three primary motivations: Ideals, achievements, and self-expression
Business (industrial) Markets
Include manufacturers, government agencies, wholesalers, retailers, banks, and institutions that buy goods and services to help them operate.
North American Industry Classification System (NAICS) Codes
Method used by the U.S. Department of Commerce to classify all businesses. The _______ are based on broad industry groups, subgroups, and detailed groups of firms in similar lines of business.
Primary Demand Trend
the projection of future consumer demand for a whole product category based on past demand and other market influences; use because you need to know the market potential for the product/service
That group of segments the company wishes to appeal to, design products for, and tailor its marketing activities toward.
the consumer's perception of a product as a bundle of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs
Major activities typically include the way the product is designed & classified, positioned, branded & packaged
Product Life Cycle
Four stages that product goes through over its life: introduction, growth, maturity, and decline.
Those who adopt an innovation early in the diffusion process but after the innovators.
Introductory (pioneering) Phase
company incurs considerable costs for educating customers, building a widespread dealer distribution and encouraging demand, Any new product category, the company incurs considerable costs for educating customers, building widespread dealer distribution, and encouraging demand. Spends significant advertisng sums at this stage to establish a position as a market leader adn to gain a large share of market before the growth stage begins.
directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product
promotional strategy in which the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise.
the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy
final stage of product life cycle: obsolescence, new technology, changing customer taste, cease all promotion, or fade out quickly.
A bundle of intangible benefits that satisfy some need or want, are temporary in nature, and usually derive from completion of a task.
A service business that relies mainly on the use of specialized equipment. ex: railroads
Relies on the creative talents and marketing skills of indivuals. (Law firm or bank)
Imperceptible but existing differences that may greatly affect the desirability of a product. ex gums may taste the same, advertising needs to show these differences to enhance product dseirability
Distinguishing characteristics of products effected through unique branding, packaging, distribution, merchandising, and advertising. ex: Many product classes, such as aspirin, salt, gasoline, packaged foods, liqour, and financial services
giving each product within a line a different name (Procter & Gamble has brand names for its dif laundry detergents: Tide, Cheer, Dash)
brands that are owned and initiated by national manufacturers or service companies; also known as producer brands.
personalized brands applied by distributors or dealers to products supplied by manufacturers; sold at a lower price in a large chain store ex: kenmore, craftsman, etc.
companies pay a substantial fee for the right to use another companys brand name. ex coca cola clothing
The totality of what consumers, distributors, dealers--even competitors--feel and think about the brand over an extended period of time.
amount charged for the good or service- including deals, discounts, terms, warranties and so on, the factors affecting the price are market demand, cost of production, and distribution, competition, and corporate objectives
How and where customers will buy a company's product; either direct or indirect distribution.
Network (multilevel) Marketing
a method of direct distribution in which individuals act as independent distributors for a manufacturer or private-label marketer; one of the fastest growing methods of direct distribution
Comprises all the firms and individuals that take title, or assist in taking title, to the product as it moves from the producer to the consumer.
distribution that sends products to only a preferred group of retailers in an area
an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer's brand
giving a limited number of dealers the exclusive right to distribute the company's products in their territories
Vertical Marketing System (VMS)
A centrally programmed and managed system that supplies or otherwise serves a group of stores or other businesses.
A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.
the blend of personal selling, advertising, direct marketing, sales promotions and public relations a firm employs to communicate with potential consumers., a variety of marketing communication tools, grouped into personal and non personal selling
use some medium as an intermediary for communicating, including advertising, direct marketing, pr, collateral materials, and sales promotion.
(a direct marketing technique) to increase productivity through person-to-person phone contact.