market management midterm

• Patterns of Market Segmentation

  Homogeneous Preferences

  Diffused Preferences

  Clustered Preferences
• Homogeneous Preferences 1


  A market where all the consumers have roughly the same

  preferences.
• The Homogeneous Preferences

  Market shows no natural segments.
• Homogeneous Preferences


  We would predict that existing brands would be similar

  and cluster in the center.
• Diffused Preferences


  At the other extreme consumer preferences may be

  scattered through out the space.
• Diffused Preferences


  The first brand to enter the market is likely to position in

  the center to appeal to most of the people.
• Clustered Preferences


  The market might reveal distinct preference clusters called

  Natural Market Segments.
• Natural Market Segments

  • Undfifferentiated Marketing
  • Concentrated Marketing
  • Differentiated Marketing
• Undifferentiated Marketing


  It might position itself in the

  center hoping to appeal to all the groups.
• Concentrated Marketing


  It might position itself in the

  largest market segment.
• Differentiated Marketing


  It might develop several

  brands, each positioned in a different segment.
• Basis of Segmentation

  • Consumer Characteristics Approach
  • Consumer Response Approach
• Consumer Characteristics Approach

  • Geographic
  • Demographic
  • Psychographic
• Geographic


  REGION: pacific, mountain; CITY or

  METRO SIZE: under 5000, above 4000; DENSITY:

  urban, suburban, rural; and CLIMATE: northern,

  southern.
• Demographic 


  Age, Gender, Family Size, Family Life

  Cycle, Income, Occupation, Education, Religion, Race,

  and Nationality.
• Psychographic


  SOCIAL CLASS: upper-upper, lower

  uppers, upper middles, middle class, working class, upper

  lowers, lower lowers; LIFE STYLE: freaky, trendy,

  ethnic; PERSONALITY: dominance, authoritarian,

  ambitious.
• Consumer Response Approach

  • Benefit Response
  • Usage Response
  • Loyalty Response
  • Occasion Response
  • Use-Status
• Conditions for Effective Marketing

  • Measurable
  • Accessibility
  • Optimum Size
  • Differentiable
  • Actionable
• Target market is one which the marketing efforts are

  directed towards.
• The factors that play significant role in the process of

  targeting are:

  • Segment’s attractiveness
  • Keeping competitors at distance
  • The company objectives and resources
• Undifferentiated Marketing:


  Entire market serve with one product.

  Example: American car Manufacturers
• Differentiated Marketing


  Local market with variety of products.
• Concentrated Marketing


  Focuses on only one or a few segments.
• Strategic planning


  is the formal consideration of an

  organization’s future.
• Dogs


  If a company’s product has a low market share and

  is at a low rate of growth, found in the lower right quadrant of the grid, don't generate much cash for the company since they have low market share and little to no growth.
• Cash Cows


  Products that are in low-growth areas but for

  which the company has a relatively large market share, seen in the lower left quadrant, are typically leading products in markets that are mature.
• Stars


  Products that are in high growth markets and that

  make up a sizable portion of that market, In the upper left quadrant, which generate high income but also consume large amounts of company cash.
• Question Marks

  are those in high growth rate markets but in which the company does not maintain a large market share, are in the upper right portion of the grid.

  They typically grow fast but consume large amounts of

  company resources. Products in this quadrant should be

  analyzed frequently and closely to see if they are worth

  maintaining
• Assessing growth opportunities


  involves planning new

  businesses, downsizing, or terminating older businesses.
• For higher sales and profits, a company's options for

  growth include:

  • intensive growth
  • integrative growth
  • diversification growth.
• Market Penetration Strategy: 


  Using this strategy, a company considers whether it could gain market share with its current products in current markets by encouraging current customers to buy more, attracting competitors' customers, or convincing non-users to start buying its products. This strategy has low risk because the company already knows the market and knows the product.
• Market-Development Strategy:

  A company considers

  whether it can find or develop new markets for its current

  products. This is higher risk than the market penetration

  strategy because the company will not know the market as

  well, but will still know the product well.
• Product-Development Strategy:


  A company considerscwhether it can develop a new product for its current markets. This is similar risk to that of the Market- Development Strategy as the company will know the market well, but not the product.
• Backward Integration:


  occurs when a

  company acquires a supplier.
• Forward Integration: \ occurs when a

  company acquires a distributor.
• Horizontal Integration:


  occurs when

  a company acquires a competitor.
• Diversification is when a company develops a new product

  for a new segment.

  It is the riskiest of the growth strategies, but can make

  good sense when opportunities exist outside the present

  business.
• Strategic planning is the formal consideration of an

  organization’s future.