Step 5: Select, Implement, and Record Chosen Course of Action
1. Define Market & Select Target
2. Develop Market Mix
What is a Market?
• A market is a group of individuals or organizations (i.e. buyers) having the willingness and ability to buy goods or services to satisfy a particular class of wants or needs.
• Understanding the market; selecting the best market & understanding its buying behavior are key to the success of the marketing plan.
Steps in Market Analysis1. Define Market to Identify
Competitive Arena to identify competitive arena
e.g. Coffee Market
Steps in Market Analysis
2. Segment the Market to Determine Competitive tactics.– If you can find an objective reliable way to define
groups of people;– If you can measure the sales and profit potential of
the segments;– If these segments can be profitably reached using
marketing– If you can expect a different response from the unique
marketing plans you offer each segment
Segmentation Effective If…• Measurable – Size, purchasing power, profiles of
segments can be measured• Substantial – Size of market large enough to justify
tailored strategy costs• Accessible – Reachable via personal or
impersonal media• Differential – Homogenous within & heterogeneous
between; must respond differently to different marketing mix elements & actions.
• Actionable – Company can develop different marketing strategies to serve segments.
Steps in Market Analysis
3. Develop profiles of the resulting segments
4. Evaluate the attractiveness of each segment & Select the Target Segment(s)
– Understand Customer Motivation and Behavior to determine relevant assets and skills
Demographic Age, gender, family size, life cycle, race, occupation, income
GeographicNations, states, regions, counties, cities, neighborhoods
Bases for Segmenting Consumer Markets
Explain how each factor affects a company’s marketing strategy.
Continued on next slide!
PsychographicLifestyle or personality
BehavioralOccasions, benefits, uses, attitudes, loyalty, buyer-readiness
Bases for Segmenting Consumer Markets
Multi-AttributeSmaller and better defined target groups, geoclustering
Bases for Segmenting Business Markets
• Demographic
• Operating variables
• Purchasing approaches
• Situational factors
• Personal characteristics
Selecting and Entering Market Segments
P = ProductM = Market
Single-segmentconcentration
P1
P2
P3
M1 M2 M3
ProductspecializationM1 M2 M3
P1
P2
P3
SelectivespecializationM1 M2 M3
P1
P2
P3
Selecting and Entering Market Segments
P = ProductM = Market
Marketspecialization
P1
P2
P3
M1 M2 M3
Full marketcoverage
M1 M2 M3
P1
P2
P3
1. Identify the variables which are used to segment this market.
1. Diaper Rash
2. Special Occasion
3. Other? Brainstorm!
1. Determine whether variables will lead to effective segment.1. Measurable2. Substantial3. Accessible4. Differential5. Actionable
2. Is segment(s) attractive?1. Size, Growth, Profitability, Risk, In sync with Company Objectives
3. Identify Type of segmentation strategy.1. Single-segment2. Selective Specialization3. Product specialization4. Market specialization5. Full market coverage
How Do you segment Toothpaste market?
Toothpaste Market Segmentation
Benefit Segment
Demographics Behavior Psychographics Brand
Economy Men Heavy Users Value oriented
Medical Large Families Heavy Users Hypochondriac,
Conservative
Cosmetic
(Bright teeth)
Teens,
Young Adults
Smokers Sociable,
Active
Taste Children Spearmint Lovers
Self involved
Airport Inn Travelodge
$ $ $ $ $ $179.95 and up
$ $ $ $ from $129.95
$ $ $ from $89.95
$ $ from $49.95
$ from $29.95
How Do You Segment Las Vegas Hotel Market?
Customer Analysis
• To develop an effective marketing plan, it is necessary to understand customers and their buying behavior
What Do You Need To Know About the Customers?
• Who constitutes the market?
• How many are there?
• Why does the market buy it?
• When does the market buy it?
• Where does the market buy it?
• How much do they buy? How often?
• How do they make their buying decision?
Consumer Buying Decisions
• Multifaceted– Product, Brand, Dealer Choice; Purchase Timing, Amount
• Multi Step– Problem Recognition, Information Search, Evaluation, Decision,
Post Purchase Behavior
• Subject to Multiple Influences– Cultural, Social, Personal and Psychological Factors and
External Environment
Features Influencing Brand Choice In Disposable DiapersRank Order – Number of Respondents
Features 1* 2 3 4 5 Totals
Absorbency 31 9 4 - 1 45
No Leak 11 9 4 2 1 32
Refastenable Tapes
3 10 8 4 6 31
Elastic Legs 4 6 8 8 3 29
Elastic Waist 3 4 3 8 6 24
Size Availability 1 - 1 5 3 10
Gender Specific - 2 - 1 1 4
Printed Designs - - - 1 1 2
Wetness Indicator 1 - 1 - - 2
Other 7 - - - - 7
*1 = most important factorSource: Wilson & Dallas, Nonwovens Industry, January 1992
Factors Influencing Choice of Diaper TypeRank Order – Number of Responses
Factor 1* 2 3 4 5 Totals
Convenience 15 11 14 3 3 46
Brand 8 16 6 8 3 41
Price 14 7 11 6 2 40
Daycare Requirements
4 8 7 3 3 25
Environmental Concerns
6 3 2 5 3 19
No washer or dryer
2 1 - - - 3
Other 6 3 2 - - 11
*1 = most important factorSource: Wilson & Dallas, Nonwovens Industry, January 1992
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