Contemporary Marketing CHAPTER 9

Market
Group of people with sufficient purchasing power, authority and willingness to buy
Target Market
Specific group of people a firm believes is most likely to buy its goods and services.
Consumer Products
Products bought by the ultimate consumers for personal use.
Business Product
Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale.
Market Segmentation
Division of the total market into smaller, relatively homogeneous groups.
Geographic Segmentation
Division of an overall market into homogeneous groups based on their locations.
Core Based Statistical Area (CBSA)
Collective term for metropolitan and micropolitan statistical areas.
Metropolitan Statistical Area (MSA)
Freestanding urban area with a population in the urban center of at least 50,000 and a total MSA population of 100,000 or more.
Micropolitan Statistical Area
Area with at least one town of 10,000 to 49,999 people with proportionally few of its residents commuting to outside the area.
Consolidated Metropolitan Statistical Area (CMSA)
Urban area that includes 2 or more PMSA’s.
Primary Metropolitan Statistical Area (PMSA)
Urbanized county or set of countries with social and economic ties to nearby areas.
Core Region
Region from which most major brands get 40 to 80 percent of their sales.
Geographic Information Systems (GSIs)
Software packages that assemble, store, manipulate and display data by their.
Demographic Segmentation
Division of an overall market into homogeneous groups based on variables, such as gender, age, income, occupation, education, sexual orientation, household size and stage in the family lifecycle; also called socioeconomic segmentation.
Tweens
-Rapidly growing in the market
-Popular items to buy: candy, soft drinks, clothing, music and electronics
Generation X
-Between 1968-1976
-Faced some economic and career challenges
-Housing cost were high and debt with college loans and credits cards
-Family oriented, well educated and optimistic
Baby Boomers
-Between 1946-1664
-Influenced by Vietnam War era and career-driven era
Seniors
-40 million over the age of 65
-Major proportion of new car sales and travel dollars spent
Cohort Effect
Tendency of members of a generation to be influenced and bound together by events occurring during their key formative years- ages 17-20
Video Game Generation
A cohort whose preferences and behavior were being shaped at the same time as video games.
Largest and Fastest Growing Ethnic Groups
-Hispanics, African-Americans and Asian-Americans.
Family Lifestyle
-Process of family formation and dissolution
-Primary determinant of many consumer purchases
Marketing by Household Type
Marketers have modified their messages and their products to meet the needs of different households (single servings, family style)
Engel’s Law
Three observations about the impact of household income on consumer behavior:
-As household income increases, a smaller percentage of expenditures goes for food.
-The percentage spent on housing, household operations and clothing remains constant.
-The percentage spent on other teams (recreation and education) increases.
Psychographic Segmentation
Division of a population into groups having similar attitudes, values and lifestyles.
AIO Statements
Items on lifestyle surveys that describe various activities, interests and respondents’ opinion.
VALS
Segmentation system that divides consumers into eight psychographic categories:
-innovators
-thinkers
-achievers
-experiencers
-believers
-strivers
-makers
-survivors
Striver
The largest segment, values professional and material goals.
Devout
Values duty and tradition, more likely to be female.
Altruist
Emphasize on social issues and societal well-being.
Intimate
Value family and personal relationships.
Fun Seeker
Focus on personal enjoyment and pleasurable experiences.
Creative
The smallest segment, seeks education, technology and knowledge.
Product-Related Segmentation
Division of a population into homogeneous groups based on their relationships to a product.
-Based on the benefits people seek when they buy a product
-Based on usage rates for a product
-According to consumers’ brand loyalty toward a product
80/20 Principle
Generally accepted rule that 80% of a products’s revenues come from 20% of its customers.
Segmenting by Benefits
Focuses on the attributes that people seek and the benefits they expect to receive from a good or service.
The Market Segmentation Process
-Develop a relevant profile for each segment
-Forecast market potential
-Forecast probable market share
-Select specific market segments
Undifferentiated Marketing
Strategy that focuses on producing a single product and marketing it to all customers, also called mass marketing.
Differentiated Marketing
Strategy that focuses on producing several products and pricing, promoting and distributing them with different marketing mixes designed to satisfy smaller segments.
Concentrated Marketing
Also know as Niche Marketing, focusing on marketing efforts on satisfying a single market segment.
Micromarketing
Targeting potential customers at very narrow, basic levels, such as by zip code, specific occupation or lifestyle-possibly even individuals themselves.
Positioning
Placing a product at a certain point or location within a market in the minds of prospective buyers.
Positioning Map
Tool that helps marketers place products in a market bu graphically illustrating consumers’ perceptions of competing products within an industry.
Repositioning
Changing the position of a product within the minds of prospective buyers relative to the positions of competing products.