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MGMA01H3 (184)
Chapter 3

Chapter 3

9 Pages
116 Views

Department
Management (MGM)
Course Code
MGMA01H3
Professor
Ingrid L.Stefanovic

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INTRODUCTION
Developing marketing plan is one step of the strategic marketing planning process
oInvolves two factors: customer needs and environmental analysis
DEVELOPING A STRATEGIC MARKETING PLAN
Two fundamental tasks
oMarketers must identify, evaluate, and ultimately select a target market
oOnce the target market has been selected, marketers must develop and implement
a marketing program that is designed to satisfy the chosen target group
The choice of a target market is based on recognizing differences among consumers and
organizations within a heterogeneous market
What is a Market?
A market is people
People alone dont make a market
Market consists of people with the willingness, purchasing power, and authority to buy
First rule of a successful salesperson to determine who in the organization or household
has the authority to make purchasing decisions
Type of Markets
Consumer goods are those products and services purchased by the ultimate consumer for
personal use
Industrial goods are those products purchased to be used, either directly or indirectly, in
the production of other goods or for resale
Sometimes the same product is destined for different uses
The key to the proper classification of goods lies in the purchaser and in the reasons for
buying the good
MARKET SEGMENTATION
The population is too large for all products to be directed at everyone
All products are made for a specific target market
Although everyone is different, we can group people according to their similarity in one
or more dimensions related to a particular product category.
oThis aggregation process is called market segmentation
Market segmentation is used for both profit and non-profit organizations
Once a segmented market is chosen, the marketer can design the appropriate marketing
approach to match its needs
SEGMENTING CONSUMER MARKETS
Characteristics that are used to determine market segments
oAge
oGender
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oGeographic location
oIncome and expenditure patterns
oPopulation size
oMobility
Five commonly used bases for segmenting consumer markets
oDemographic segmentation
Dividing an overall market on the basis of characteristics such as age,
gender, income level
Easiest way of dividing markets
oGeographic segmentation
Dividing an overall market into homogeneous groups based on population
location
oPsychographic segmentation
Uses behavioural profiles developed from analyses of the activities,
opinions, interests, and lifestyles of consumers
oBenefit segmentation
Depends on a product
oUsage rate
Divides the market by the amount of product consumed, and/or degree of
brand loyalty
GEOGRAPHIC SEGMENTATION
Find out where the buyers are
Country and regional variations in consumer tastes often exist
Geographic Location of the Canadian Population
Large portions of Canada are uninhabited
oPopulation is not distributed evenly
People tend to move where work and opportunities exist
oOntario and British Columbia
Natural factors and immigration also influence population
Growth has occurred because of natural increase (births minus deaths) and net migration
(immigration minus emigration)
Remarkable influence has been the immigration-emigration flow in Canada
The tremendous immigration and emigration in proportion to the size of Canadas
population has resulted in a somewhat unstable set of common goals and ends for
Canadian society
People Are in the Cities
Predominately urban
In 2001
o80% urban dwellers, 20% rural dwellers
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o63% of Canadas population lives in the 25 largest metropolitan areas
oOne of the most mobile populations in the world
Using Geographic Segmentation
Country and regional variations in tastes often exist
oBreakfast in Germany includes bread, cheese and cold meat, breakfast in China is
rise and porridge
Residence location within a geographic area is another important geographic variable
oUrban dwellers eat more meals in restaurants than their suburban or rural
counterparts
oSuburban dwellers spend more time on lawn and garden care then urban and rural
Climate is another important factor
oSnow blowers, shovels and snowmobiles are popular products in Canada
oSome segments will spend more money on heating equipment then other
Canadians
oClimate affects patterns in clothing purchase
Geographic segmentation influences decisions about which sales region to enter, where
sales force offices are located , and where retail outlets are located
Geographic segmentation is only useful when true differences in preference and purchase
patterns for a product emerge along regional lines
DEMOGRAPHIC SEGMENTATION
It is the most common approach of market segmentation
Demographic variables are used in segmenting markets because
oThey are easy to identify and measure
oThey are associated with the sale of many products and services
oThey are typically referred to in describing the audiences of advertising media,
so that media buyers and others can easily pinpoint the desired target market
Many products are gender specific
Segmenting by Age
Older and Senior middle-aged adult segment (45-64)
oHousing costs are lower because mortgages are paid off
oThey find themselves with substantial disposal income
Often used on luxury goods, new furniture, and travel
Segmenting by Family Life Cycle
Family life cycle is the process of family formation, development, and dissolution.
oThe marketing planner combines the family characteristics of age, marital status,
presence or absence of children, and ages of children in developing the marketing
strategy
Six-Stage family life cycle
oYoung Single
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Description
INTRODUCTION Developing marketing plan is one step of the strategic marketing planning process o Involves two factors: customer needs and environmental analysis DEVELOPING A STRATEGIC MARKETING PLAN Two fundamental tasks o Marketers must identify, evaluate, and ultimately select a target market o Once the target market has been selected, marketers must develop and implement a marketing program that is designed to satisfy the chosen target group The choice of a target market is based on recognizing differences among consumers and organizations within a heterogeneous market What is a Market? A market is people People alone dont make a market Market consists of people with the willingness, purchasing power, and authority to buy First rule of a successful salesperson to determine who in the organization or household has the authority to make purchasing decisions Type of Markets Consumer goods are those products and services purchased by the ultimate consumer for personal use Industrial goods are those products purchased to be used, either directly or indirectly, in the production of other goods or for resale Sometimes the same product is destined for different uses The key to the proper classification of goods lies in the purchaser and in the reasons for buying the good MARKET SEGMENTATION The population is too large for all products to be directed at everyone All products are made for a specific target market Although everyone is different, we can group people according to their similarity in one or more dimensions related to a particular product category. o This aggregation process is called market segmentation Market segmentation is used for both profit and non-profit organizations Once a segmented market is chosen, the marketer can design the appropriate marketing approach to match its needs SEGMENTING CONSUMER MARKETS Characteristics that are used to determine market segments o Age o Gender www.notesolution.com
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