Learn about markets, targeting strategies, and segmentation variables

Consumer markets

Learn about markets

Understand the differences among general targeting strategies

Become familiar with the major segmentation variables

Know what segment profiles are and how they are used

Understand how to evaluate market segments

Identify the factors that influence the selection of specific market segments for use as target markets

Become familiar with sales forecasting methods

Purchasers are household members who intend to consume or benefit from purchased products and do not buy products for the purpose of making a profit.

Individuals or groups who purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations.

The process of dividing a total market into groups with relatively similar product needs in order to design a marketing mix that matches those needs. Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs. Segmentation allows firms to better able develop a marketing mix that satisfies a portion of a heterogeneous market.

Characteristics of individuals, groups, or organizations used to divide a market into segments.Consumers in different stages of the family life cycle have different product needs and demands.

The number of potential customers within a unit of land area. Geodemographic segmentation: Market segmentation that clusters people in units based on lifestyle and demographic information.

An approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets. Developed by SRI Consulting Business Intelligence Classifies consumers based on psychological characteristics that are correlated with purchase behavior and key demographics. Dividing a market according to a feature of consumer behavior toward a product, usually involving an aspect of product use rates Benefits sought Usage or application type. The division of a market according to benefits that consumers want from the product. Different than other segmentation methods because the benefits the customers seek are their product needs.

Three conditions must be met

Benefits must be identifiable

Customers must be divisible into segments 

At least one segment must be accessible to marketing efforts

Most firms use a variety of forecasting methods and techniques to accommodate different products and/or different time frames and to confirm and refine the forecasts. Short-range and long-range forecasts will usually require different methods. Predicting sales based on finding a relationship between past sales and one or more independent variables. Requires the use of historical sales data. Is useful when a precise association between variables can be established and when data is extensive. Cannot use this method for new products.

Expert forecasting survey: Prepared by economists, management consultants, advertising executives, and others outside the firm. Outsiders may be less motivated than internal personnel to do an effective job.

Creating initial forecasts, submitting them to the company for averaging, then refining. A more complex form of the expert forecasting survey. May be repeated many times until experts reach a consensus.

Surveying customers regarding types/quantities of products they intend to buy. Downside is that customers make accurate estimates of future product requirements.

Sales force forecasting    

Downsides are

Salespeople are not objective

Salespeople will underestimate potential in their territories if their goals are determined by forecasts