Marketing Chapter 10: Target Marketing

Chapter 10: Target Marketing and Market Segmentation

• Marketing Defined: 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: 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.

• Delivering Value (Examples): Developing a new product superior to existing ones, keeping a store open longer during busy periods, offering price reductions, or providing information on product usage.

• Value and Utility: Value provides customers with utility, the ability of a product to satisfy a human want or need. This includes:

  • 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: A marketing strategy that emphasizes building lasting relationships with customers and suppliers.

The External Marketing Environment

• Scope: External factors (outside the organization) that influence a business.

• Components:

  • Competitive Environment: The competitive system in which businesses compete (substitute, brand, and international competition).
  • Economic Environment: Relevant conditions in the economic system where the company operates.
  • Technological Environment: All the ways firms create value for their constituents.
  • Political-Legal Environment: The relationship between business and government, often in the form of government business regulation.
  • Sociocultural Environment: The customs, mores, values, and demographic characteristics of the society where the business operates.

Strategy: The Marketing Mix

• Marketing Mix: The combination of product, pricing, promotion, and place (distribution) strategies used to market products.

• Marketing Plan: A detailed strategy to focus marketing efforts on consumers' needs and wants.

• Marketing Objectives: The goals marketing intends to accomplish within a marketing plan.

Components of the Marketing Plan

• Overall Business Mission: The overall target and purpose of the company.
• Marketing Objectives: Marketing's intentions and goals.
• Marketing Strategy: The actions to achieve the objectives.
• Marketing Mix: Four P's—product, pricing, place, and promotion.
• Target Markets: The defined potential customer groups.

Strategy: The Marketing Mix (Continued) (Further Definitions)

• Product: A good, service, or idea marketed to fill consumer needs and wants.
• Product Differentiation: Creating a product feature or image distinctive enough to attract customers, differentiating it from competitors.
• Pricing: Determining the optimal price to sell a product.
• Place (Distribution): Part of the marketing mix focused on getting products from producers to consumers.
• Promotion: Aspect of the marketing mix emphasizing effective techniques for communicating information about products.

Target Marketing and Market Segmentation

• Target Market: A group of people with similar wants and needs who can be expected to show interest in the same products.
• Market Segmentation: The process of dividing a market into categories of customer types, or "segments."

Identifying Market Segments (Variables)

• Geographic Variables: Geographic units considered in developing a segmentation strategy.
• Demographic Variables: Populations' characteristics influencing segmentation strategy (age, education, family life cycle, family size, income, nationality, race, religion, gender).
• Geo-Demographic Variables: Combination of geographic and demographic traits used in segmentation strategies.
• Psychographic Variables: Consumer characteristics such as (lifestyles, opinions, interests, and attitudes).

Understanding Consumer Behavior

• Consumer Behavior: The study of the decision process by which people buy and consume products.

• Influences on Consumer Behavior:

  • Psychological: Motivations, perceptions, ability to learn, and attitudes.
  • Personal: Lifestyle, personality, and economic status.
  • Social: Family, opinion leaders, reference groups (friends, coworkers, professional associates).
  • Cultural: Culture, subculture, and social class influences.

• Stages in the Consumer Buying Process: Problem/Need recognition; Information Seeking; Evaluation of Alternatives; Purchase Decision; Postpurchase Evaluation.

Explore the essential concepts of target marketing and market segmentation presented in Chapter 10. This quiz will test your understanding of how organizations create and deliver value to customers, as well as the benefits of effective marketing strategies. Enhance your marketing knowledge and refine your skills in customer relationship management.