1.       Characteristics of markets and market segments

1.       People or organizations with needs or wants and the ability and willingness to buy

2.       A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Market Segmentation

1.       The process of dividing a market into meaningful, relatively similar, identifiable, segments or groups

2.       Brings a more precise definition of customer needs and wants

   Ways of segmenting markets

1.       Geography

                                                               i.      Region of the country or world, market size, market density, climate

2.       Demographics

                                                               i.      Has to deal with age, gender, income, ethnic background, and family life cycle

                                                             ii.      Largest ethnic groups are Hispanics, African Americans, and Asian Americans

3.       Psychographics- market segmentation on the basis of personality, motives, lifestyles and geodemographics

                                                               i.      Personality, motives, lifestyles, and geodemographics

1.       Lifestyles segmentation is how time is spent, the importance of things around them , beliefs and socioeconomic characteristics

2.       Geodemographics is segmenting potential customers into neighborhood lifestyle categories

a.       Combines geographic, demographic, and lifestyle segmentation

4.       Benefits Sought- the process of grouping customers into market segments according to the benefits they seek from the product

                                                              i.      80/20 Segmentation- a principle holding that 20 percent of all customers generate 80 percent of the demand

5.       Usage Rate- dividing a market by the amount of product bought or consumed

                                                              i.      Ex. Sprint and Cingular Wireless charge based on usage: the amount of data bits they transfer each month

                                                            ii.      Formal, potential,  1^st time, light or irregular, medium, heavy

1.       is segmenting potential customers into neighborhood lifestyle categories

a.       Combines geographic, demographic, and lifestyle segmentation

1.       dividing a market by the amount of product bought or consumed

                                                              i.      Ex. Sprint and Cingular Wireless charge based on usage: the amount of data bits they transfer each month

                                                            ii.      Formal, potential,  1^st time, light or irregular, medium, heavy

Family life cycle

1.       Age, Marital Status, and Children

2.       There are many ways that it can flow

3.       The traditional way is young and single, young and married w/out children, young and married w/ children, middle aged with children, middle aged without dependent children, older married and then older unmarried.

1.       Define Problem

2.       Plan Design/ Primary Data

3.       Specify sampling procedure

4.       Collect data

5.       Analyze data

6.       Prepare/ present report

7.       Follow up

1.       An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions

2.       Interactive, flexible, discover-oriented, accessible

 What is market research?

1.       The process of planning, collecting, and analyzing data relevant to a marketing decision\

2.       The role of marketing research is to gather and present factual statements, explaining data, and trying to answer the “what if” question

  Difference between secondary vs. primary data

1.       Secondary: Data previously collected for any purpose other than the one at hand

                                                               i.      Ex. Internal corporate information, government agencies, trade and industry associations, business periodicals, news media

                                                             ii.      Aids in determining direction for primary data collection

                                                            iii.      Saves time and money if on target

                                                           iv.      Serves as a basis of comparison for other data

                                                             v.      May not give adequate detailed information

2.       Primary: information collected for the first time, can be used for solving the particular problem under investigation

                                                               i.      Data is current and known and answers a specific question

                                                             ii.      But its expensive, quality declines if interviews are lengthy

Errors and the role of the internet

1.       Measurement error: error when there is a difference between the information desired and the information provided by research

2.       Sampling error: error when a sample somehow does not represent the target population

3.       Frame error: error when a sample drawn from a population differs from the target population

4.       Random error: error because the selected sample is an imperfect representation of the overall population

5.       Internet:

                                                               i.      Allows better and faster decision making

                                                             ii.      Improves ability to respond quickly to customer needs and wants

                                                            iii.      Reduces cost and makes it easier to contact with people

                                                               i.      Allows better and faster decision making

                                                             ii.      Improves ability to respond quickly to customer needs and wants

                                                            iii.      Reduces cost and makes it easier to contact with people

     Business to Business marketing

1.       The marketing of goods and services to individuals and organizations for purposes other than personal consumption

2.       To facilitate activities between organizations

1.       a network of interlocking corporate affiliates

                                                               i.      Trade with each other whenever possible and often engage in joint product development, finance, and marketing activity

1.       Retailer sells mainly to final consumers

2.       Wholesalers sell mostly to retailers and other organizational customers

 Different ways that businesses buy

1.       New buy: a situation requiring the purchase of a product for the first time

2.       Modified rebuy: a situation where the purchaser wants some change in the original good or service

3.       Straight rebuy: a situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers

1.       a situation requiring the purchase of a product for the first time

       Buying Center – influencers, gatekeepers, users, purchasers etc.

1.       Initiator: the person who first suggest making a purchase

2.       Influencer/evaluator: people who influence the buying decision. They often help define specifications and provide information for evaluating options

3.       Gatekeepers: group members who regulate the flow of information.

                                                               i.      A secretary may also act as a gatekeeper by determining which vendors get an appointment with a buyer

4.       Decider: the person who has the formal or informal power to choose or approve the selection of the supplier or brand

5.       Purchaser: the person who actually negotiates the purchase

6.       Users: members of the organization who will actually use the product

    Strategic alliances

1.       A cooperative agreement between business firms

2.       Can take the form of licensing or distribution agreements, joint ventures, research and development consortia and partnerships

1.       Everything, both favorable and unfavorable, that a person receives in an exchange

1.       Tangible goods, services and an idea

2.       Starting point of the marketing mix

1.       Consumer products: a product bought to satisfy an individual’s personal needs or wants

                                                               i.      Ex. Convenience products, shopping products, specialty products, unsought products

2.       Business products: a product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other consumers

   Differences between product items, product mix, and product lines

1.       Product item: a specific version of a product that can be designated as a distinct offering among an organization’s products

2.       Product line: a group of closely related product items

3.       Product mix: all products that that an organization sells

      a group of closely related product items

   Packaging

                                                               i.      Are to contain and protect products, promote products, and facilitate the storage, use, and convenience of products. Also to facilitate recycling and reduce environmental damage

Labeling

                                                               i.      Labeling is used to persuade or inform the consumers

    Global issues in branding an packages

1.       Packaging:

                                                               i.      Labeling

                                                             ii.      Aesthetics

                                                            iii.      Climate considerations

2.       Global Branding: a brand where at least 20% of the product is sold outside its home country

                                                               i.      One brand name everywhere

                                                             ii.      Adaptations and modifications

                                                            iii.      Different brand names in different markets

       Warranty

1.       A confirmation of the quality or performance of a good or service

2.       Express warranty = written guarantee

3.       Implied warranty = unwritten guarantee

     Product line extensions

1.       Adding additional products to an existing product line in order to compete more broadly in the industry

  Product line contraction

1.       Some products have low sales or cannibalize sales of other items

2.       Resources are disproportionately allocated to slow-moving products

3.       Items have become obsolete because of new product entries

   Repositioning products – when, why?

1.       Changing demographics

2.       Declining sales

3.       Changes in social environment

1.       A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products

1.       Generic brand:

                                                               i.      A no frills, no brand name, low cost product that is simply identified by its product category

                                                             ii.      Ex. Equate

2.       Manufacturer brand:

                                                               i.      The brand name of a manufacturer

                                                             ii.      Rapid delivery, less inventory

                                                            iii.      Ex. Kellogg’s

3.       Private brand:

                                                               i.      a brand name owned by a wholesaler or retailer

                                                             ii.      Also known as a private label or store brand

                                                            iii.      Own higher profits on own brand

                                                           iv.      Less pressure to mark down price

                                                             v.      Ex. Kroger brands