Marketing Chapter 10: Target Marketing

Chapter 10: Target Marketing and Market Segmentation

• Marketing is defined as an organizational function and a set of processes for creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders.
• Value is defined as the relative comparison of a product's benefits versus its costs.
  • Value = Benefits / Costs
  • Benefits include the functions and emotional satisfaction associated with owning, experiencing, or possessing a product.
• Ways a company can deliver value include:
  • Developing new products better than existing ones
  • Keeping stores open longer during busy periods
  • Offering price reductions
  • Providing information explaining how a product can be used in new ways
• Utility is the ability of a product to satisfy a human want or need. This can be expressed in several ways.
  • Form utility - designing products with features customers want
  • Time utility - providing products when customers want them
  • Place utility - providing products where customers want them
  • Possession utility - transferring product ownership to customers
• Relationship marketing emphasizes building lasting relationships with customers and suppliers.

The External Marketing Environment

• External factors are outside sources that influence a business. These factors are divided into categories influencing the firm and its marketing plan.
  • Competitive Environment: The competitive system in which businesses compete. Includes substitute product competition (products similar but not identical), brand competition (similar products by different companies), and international competition (marketing of domestic products against foreign products)
  • Economic Environment: The relevant conditions in the economic system where a company operates.
  • Technological Environment: All the ways firms create value for their constituents.
  • Political-Legal Environment: The relationship between business and government, usually in the form of government regulation of business.
  • Sociocultural Environment: The customs, mores, values, and demographic characteristics of the society in which an organization operates.

The Marketing Mix and Plan

• Marketing Mix: A combination of product, pricing, promotion, and place strategies used to market products.
• Marketing Plan: A detailed strategy that focuses on meeting consumer needs and wants
  • Includes marketing objectives (goals of the plan), marketing strategy (detailed actions to take)
  • Target Market is a group of people sharing similar wants and needs who are expected to show interest in similar products.
• Components of the Marketing Plan: This outlines how the plan will operate to meet objectives. The Marketing Mix is a key component, involving product, price, place (distribution), and promotion aspects.

Understanding Consumer Behavior

• Consumer Behavior: The study of the decision process individuals use when buying and consuming products.
  • Psychological Influences: Motivations, perceptions, ability to learn, and attitudes
  • Personal Influences: Lifestyle, personality, and economic status
  • Social Influences: Family, opinion leaders, and reference groups (friends, coworkers, professional contacts)
  • Cultural Influences: Culture, subculture, and social class
• Consumer Buying Process: A series of stages individuals go through when buying:
  • Problem/Need Recognition
  • Information Seeking
  • Evaluation of Alternatives
  • Purchase Decision
  • Postpurchase Evaluation

Identifying Market Segments

• Geographic Variables: Geographic units useful for developing a segmentation strategy.
• Demographic Variables: Population characteristics useful for segmentation strategy (age, education, family life cycle, family size, income, nationality, race, religion, gender).
• Geo-demographic Variables: Combination of geographic and demographic traits used for segmentation strategy.
• Psychographic Variables: Consumer characteristics like lifestyles, opinions, interests, and attitudes.

Explore the concepts of target marketing and market segmentation in this quiz based on Chapter 10. Understand how value and utility play critical roles in marketing strategies, and learn how companies can enhance customer satisfaction. Test your knowledge on the processes that create and manage customer relationships effectively.