24108 Lecture Notes - Lecture 5: Marketing Mix, Brand Loyalty, Pareto Principle
Market:
• Group of customers with heterogeneous needs and wants
• Consumers and businesses vary in needs, wants and demands
o Impossible to appeal to all consumers/businesses
Target Marketing:
• Buyers have common/unique wants, needs and demands
• Contains subgroups
• Market segments
o Subgroups within total market that are relatively similar in
certain characteristics
Mass Marketing:
• Common wants, needs and demands.
• Single product meets needs of most people in market with one
approach.
• Large volume at low cost per unit (economies of scale); easy to
sell because of low price.
One-to-one marketing:
• Unique, customised offering to meet individual customer needs.
• Higher unit costs; restricted market
• Focus or niche strategy
Differentiated targeting strategy:
• Different marketing mix for each target market segment
• Forms a basis of target marketing
• Requires high costs; higher retail prices; high market share and
strong customer loyalty.
Target marketing:
Product and market specialization:
• Product specialization
o Single product range for a number of market segments
• Market specialisation
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o Focused on meeting a range of needs within a particular
market segment
• Product-market specialisation
o Single product to a single market segment
Target marketing:
Market segmentation:
• Segmentation variables: characteristics that buyers have in
common and might be closely related to purchasing behaviour
o Demographic
o Geographic
o Psychographic
o Behavioural
• Effective segmentation involves choosing segmentation variables
that are easy to measure and readily available, and linked
closely to the purchase of the product in question.
Geographic segmentation:
• Based on geography
o Climate
o Local population
o Market density
o Region
o Topography
o Urban, suburban and rural footprint
• Geo-demographic segmentation
o Demographic + geographic variables in very small areas
Demographic segmentation:
• Based on demographic variables
o Age
o Education
o Income
• Vital and social characteristics of populations
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