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Lecture 5

MARK 201 Lecture Notes - Lecture 5: Marketing Mix, Factor Analysis, Value Proposition


Department
Marketing
Course Code
MARK 201
Professor
Ralph Nobel
Lecture
5

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KEY TOPICS SESSION 5
I. Approaches to Potential Markets
-Mass mktg. versus segmentation
-Necessity of segmentation due to changing marketplace
II. Steps in Target Marketing (Fig 8-1) – Overview
III. Effective Segmentation
1. Is the segment homogeneous within itself, but yet heterogeneous compared to other segments?
The key is to select only as many variables as needed to obtain the best view of the market –
neither too broad nor too narrow (under versus over-segmentation)
2. Criteria
- Measurable - Size, purchasing power, profiles of segments can be measured.
- Substantial - Segments must be large or profitable enough to serve.
- Accessible - Segments can be effectively reached and served.
- Differentiable - Segments must respond differently to different marketing mix elements &
actions.
- Actionable - Must be able to attract and serve the segments
IV. Segmentation Bases/Variables, Combinations & Examples
-4 Broad categories: geographic, demographic, psychographic & behavioural
-See Table 8.1 for the variables in each category & examples of typical breakdowns for each
variable. Students must know the segmentation categories & which variables are in each category
for both the consumer and business markets.
-Addition to Table 8.1: add the AIOs to the lifestyle variable - Common lifestyle breakdowns include
(note: these are examples only, & not a comprehensive list)
------------------------------------------ AIOs-------------------------------------------------
Activities Interests Opinions
Work Family Themselves
Hobbies Home Social Issues
Social events Job Politics
Vacation Community Business
Entertainment Recreation Economics
Club membership Fashion Education
Community Food Products
Shopping Media Future
Sports Achievements Culture
-Using multiple variable for segmentation
-Geodemographics – PRIZM C2 & PRIZM QC
-Business markets can also be segmented & may use some additional variables (Customer
operating statistics, Purchasing approaches, Situational factors, Personal characteristics).
-Segmenting in the international market – intermarket segmentation
V. Market Targeting - Selecting target market(s)
1. Criteria – see effective segmentation section
- Size & expected growth, competitive position & structural attractiveness (can competition
enter easily, are there few but powerful buyers or suppliers that can affect our ability to
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