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					   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 Analysis
1.    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
           Bases for Segmenting
            Consumer Markets
 Explain how each factor affects a company’s
              marketing strategy.

Geographic
Nations, states, regions,
counties, cities, neighborhoods


Demographic
Age, gender, family size, life cycle, race,
occupation, income
                       Continued on next slide!
         Bases for Segmenting
          Consumer Markets
Psychographic
Lifestyle or personality


Behavioral
Occasions, benefits, uses,
attitudes, loyalty, buyer-readiness
Multi-Attribute
Smaller and better defined
target groups, geoclustering
Bases for Segmenting Business
           Markets
•   Demographic
•   Operating variables
•   Purchasing approaches
•   Situational factors
•   Personal characteristics
      Selecting and Entering Market
     Single-segment
                    Segments  Selective
     concentration                             specialization
     M1   M2   M3                              M1    M2   M3
P1                                        P1

P2                                        P2
                           Product
                         specialization
P3                       M1 M2 M3         P3
                    P1
     P = Product
     M = Market     P2

                    P3
 Selecting and Entering Market
           Segments
         Market                      Full market
      specialization                  coverage
     M1 M2 M3                        M1 M2 M3
P1                              P1

P2                              P2

P3                              P3
                       P = Product
                       M = Market
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.       Measurable
     2.       Substantial
     3.       Accessible
     4.       Differential
     5.       Actionable
2.        Is segment(s) attractive?
     1.       Size, Growth, Profitability, Risk, In sync with Company Objectives
3.        Identify Type of segmentation strategy.
     1.       Single-segment
     2.       Selective Specialization
     3.       Product specialization
     4.       Market specialization
     5.       Full market coverage
How Do you segment Toothpaste market?
            Toothpaste Market Segmentation

Benefit          Demographics     Behavior      Psychographics   Brand
Segment


Economy          Men              Heavy Users   Value oriented



Medical          Large Families   Heavy Users   Hypochondriac,
                                                Conservative


Cosmetic         Teens,           Smokers       Sociable,
(Bright teeth)   Young Adults                   Active


Taste            Children         Spearmint     Self involved
                                  Lovers
How Do You Segment Las Vegas Hotel Market?




                                     $$$$$   $179.95 and up


                                     $$$$     from $129.95


                                     $$$        from $89.95


                                     $$         from $49.95

            Airport Inn Travelodge   $          from $29.95
         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 Diapers
                                 Rank 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          3                  10                 8   4     6          31
Tapes

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 factor
Source: Wilson & Dallas, Nonwovens Industry, January 1992
                                 Factors Influencing Choice of Diaper Type
                                    Rank 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                 4                  8                7    3       3   25
Requirements

Environmental           6                  3                2    5       3   19
Concerns

No washer or            2                  1                -    -       -   3
dryer

Other                   6                  3                2    -       -   11
*1 = most important factor
Source: Wilson & Dallas, Nonwovens Industry, January 1992

				
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