Business Essentials: Target Marketing and Market Segmentation PDF

Business Essentials Thirteenth Edition Chapter 10 Target Marketing and Market Segmentation Copyright © 2022, 2019, 2016 Pearson Education, Inc. Learning Outcomes 1 Explain the concept...

Business Essentials Thirteenth Edition Chapter 10 Target Marketing and Market Segmentation Copyright © 2022, 2019, 2016 Pearson Education, Inc. Learning Outcomes 1 Explain the concept of marketing and identify the five forces that constitute the external marketing environment. 2 Explain market segmentation and target marketing. 3 Describe the key factors that influence the consumer buying process. Copyright © 2022, 2019, 2016 Pearson Education, Inc. What Is Marketing? Marketing – 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 Copyright © 2022, 2019, 2016 Pearson Education, Inc. Delivering Value (1 of 2) Value – relative comparison of a product’s benefits versus its costs Benefits Value = Costs Benefits – include the functions and the emotional satisfaction associated with owning, experiencing, or possessing a product. Copyright © 2022, 2019, 2016 Pearson Education, Inc. Delivering Value (2 of 2) A company may: – develop an entirely new product that performs better than existing products – keep a store open longer hours during a busy season – offer price reductions – offer information that explains how a product can be used in new ways Copyright © 2022, 2019, 2016 Pearson Education, Inc. Value and Utility Value provides customers with utility ( - the ability of a product to satisfy a human want or need) –  Form utility – designing products with features that customers want –  Time utility – providing products when customers would want them  Place utility - providing products where customers would want them  Possession utility – transferring product ownership to customers Copyright © 2022, 2019, 2016 Pearson Education, Inc. Relationship Marketing Relationship Marketing – marketing strategy that emphasizes building lasting relationships with customers and suppliers Copyright © 2022, 2019, 2016 Pearson Education, Inc. The External Marketing Environment External factors/outside sources that affects the business. Copyright © 2022, 2019, 2016 Pearson Education, Inc. The Marketing Environment 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 functions (Monitor social trends by maintaining close relationships)(Adjust the product to meet the tastes abd preferences. Copyright © 2022, 2019, 2016 Pearson Education, Inc. The Marketing Environment Technological Environment – all the ways by which firms create value for their constituents (Develop products that closely match customers’ needs) Economic Environment – relevant conditions that exist in the economic system in which a company operates – Marketers must adapt to the economics condition to offer products more tailored to consumers' income. Copyright © 2022, 2019, 2016 Pearson Education, Inc. The Marketing Environment Competitive Environment – the competitive system in which businesses compete Copyright © 2022, 2019, 2016 Pearson Education, Inc. Competitive Environment Substitute product competition-product dissimilar to those of competitors but fulfill the same need. Brand competition-occurs between similar products, e.g. auditing services provided by Ernst & Young and KPMG. International competition-competitive marketing of domestic products against foreign products Copyright © 2022, 2019, 2016 Pearson Education, Inc. Strategy: The Marketing Mix (1 of 4) Marketing Mix – combination of product, pricing, promotion, and place (distribution) strategies used to market products Marketing Plan – detailed strategy for focusing marketing efforts on consumers’ needs and wants Copyright © 2022, 2019, 2016 Pearson Education, Inc. Strategy: The Marketing Mix (2 of 4) Marketing Objectives – the things marketing intends to accomplish in its marketing plan Copyright © 2022, 2019, 2016 Pearson Education, Inc. Components of the Marketing Plan Copyright © 2022, 2019, 2016 Pearson Education, Inc. Strategy: The Marketing Mix (3 of 4) Product – good, service, or idea that is marketed to fill consumers’ needs and wants Product Differentiation – creation of a product feature or product image that differs enough from existing products to attract customers Copyright © 2022, 2019, 2016 Pearson Education, Inc. Strategy: The Marketing Mix (4 of 4) Pricing – process of determining the best price at which to sell a product Place (Distribution) – part of the marketing mix concerned with getting products from producers to consumers Promotion – aspect of the marketing mix concerned with the most effective techniques for communicating information about products Copyright © 2022, 2019, 2016 Pearson Education, Inc. Target Marketing and Market Segmentation Target Market Market Segmentation – group of people who – process of dividing a have similar wants and market into categories needs and can be of customer types, or expected to show “segments” interest in the same products Copyright © 2022, 2019, 2016 Pearson Education, Inc. Identifying Market Segments Geographic Variables – geographic units that may be considered in developing a segmentation strategy (Rural and Urban Areas) Demographic Variables – characteristics of populations that may be considered in developing a segmentation strategy Copyright © 2022, 2019, 2016 Pearson Education, Inc. Demographic Variables Age Under 5, 5–11, 12–19, 20–34, 35–49, 50–64, 65+ Education Grade school or less, some high school, graduated high school, some college, college degree, advanced degree Family Life Young single, young married without children, young married with Cycle children, older married with children under 18, older married without children under 18, older single, other Family Size 1, 2–3, 4–5, 6+ Income Less than $15,000, $15,000–$24,999, $25,000–$50,000, $50,000– $100,000, $100,000–$200,000, more than $200,000 Nationality African, American, Asian, British, Eastern European, French, German, Irish, Italian, Latin American, Middle Eastern, Scandinavian Race American Indian, Asian, African American, White Religion Buddhist, Catholic, Hindu, Jewish, Muslim, Protestant Gender Male, Female Copyright © 2022, 2019, 2016 Pearson Education, Inc. Identifying Market Segments Geo-Demographic Variables – combination of geographic and demographic traits used in developing a segmentation strategy Psychographic Variables – consumer characteristics, such as lifestyles, opinions, interests, and attitudes that may be considered in developing a segmentation strategy – YT: https://www.youtube.com/watch?v=Z6WYEwjzqc4 Copyright © 2022, 2019, 2016 Pearson Education, Inc. Understanding Consumer Behavior (1 of 3) Consumer Behavior – study of the decision process by which people buy and consume products Influences on Consumer Behavior: Psychological Personal Social Cultural Copyright © 2022, 2019, 2016 Pearson Education, Inc. Understanding Consumer Behavior (2 of 3) Psychological Influences – include an individual’s motivations, perceptions, ability to learn, and attitudes – Ability to learn comes from experience. Personal Influences – include lifestyle, personality, and economic status Copyright © 2022, 2019, 2016 Pearson Education, Inc. Understanding Consumer Behavior (3 of 3) Social Influences – include family, opinion leaders (people whose opinions are sought by others), and such reference groups as friends, coworkers, and professional associates – We tend to pick up products our friends recommend. Cultural Influences – include culture, subculture, and social class influences (background, occupation, income) Copyright © 2022, 2019, 2016 Pearson Education, Inc. Influences on Consumer Behaviour Failed to understand the factors that might influence consumers, will fail to convince the consumer to purchase or fail to meet the demands of consumers. Copyright © 2022, 2019, 2016 Pearson Education, Inc. The Consumer Buying Process Copyright © 2022, 2019, 2016 Pearson Education, Inc. Summary Copyright © 2022, 2019, 2016 Pearson Education, Inc.