MKT 220 Lecture 6: Chatper 6

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7 Feb 2017
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Markets- a group of people who need and desire a particular product
- have the ability to purchase the product
- Willing to use their buying power
- have the authority to buy products (over 21 to buy alcohol)
Types of Markets
Consumer Market- households who purchase for personal consumption, not profit
Aka business-to-consumer (B2C) markets
We belong to numerous consumer markets
Business market- purchase products for: (aka business-to-business, industrial, and organizational)
Resale
Direct use to produce other products
Daily business operations
1. Producer markets- buy products in order to produce goods (factories, manufacturing,
farmers)
2. Reseller markets- resell the product (retailer or wholesaler)
3. Government markets- entity that gets fundraising from the government (WKU,
military)
4. Institutional markets- charities, have non-business and non-profit oriented goals
(private schools)
Target Market Selection Process
1. Identity the appropriate targeting strategy
Target market- group of people for which a business creates the marketing mix (Product,
Price, Promotion, Place) to specifically satisfy the needs of the group members
Undifferentiated strategy: defines an entire market for a particular product as the
target market- homogenous market designs a single marketing mix
Bread is bread- don’t have to design it for anyone in particular
One product take it or leave it
Market segmentation- divides the total market into groups of customers w similar needs
and designs products to meet those specific needs
So market segments in the toothpaste industry would be denture, whitening,
sensitive, enamel, and cavity
Concentrated strategy- focuses on a single market segment in the marketing mix
So Sensodyne only focuses on sensitive toothpaste segment
Only go after one target market even though there are many
Differentiated strategy- targets 2 or more segments by developing a marketing
mix for each one (competitive advantage- larger market overall)
Crest: whitening, kids, cavity, gingivitis have a different marketing mix
for each segment that they target
Change one of the P’s for each of the target market
Differentiated- target a different market and go after different segments- different beers
for all types of people
Concentrated- only pale beers or Rolex only focusing on rich people market
2. Determine which segmentation variables to use
Segmentation variables- characteristics of individuals, groups, or organizations used to
divide a market into segments
Demographic (age, gender, race, ethnicity, income, education, family life cycle)
Gender- Harley Davidson, Maximum Magazine etc.
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