Page 149 - Foundations of Marketing

116 Part 2 | Marketing Research and Target Markets

Like Magnum, most organizations trying to compete effectively must identify specific cus-
tomer groups toward which they will direct marketing efforts. This includes developing and
maintaining marketing mixes that satisfy the needs of those customers. In this chapter, we
define and explore the concepts of markets and market segmentation. First we discuss the
major requirements of a market. Then we examine the steps in the target market selection
process, including identifying the appropriate targeting strategy, determining which variables
to use for segmenting consumer and business markets, developing market segment profiles,
evaluating relevant market segments, and selecting target markets. We conclude with a discus-
sion of the various methods for developing sales forecasts.

LO 1 . Understand what markets WHAT ARE MARKETS?
are and how they are generally
classified.
In Chapter 2 , we defined a market as a group of individuals and/or organizations that have a desire
or needs for products in a product class and have the ability, willingness, and authority to purchase
those products. You, as a student, for example, are part of the market for textbooks. You are part of
other markets as well, such as for computers, clothes, food, and music. To truly be a market, they
must possess all four characteristics. For example, teenagers are not part of the market for alcohol.
They may have the desire, willingness, and ability to buy liquor, but they do not have the authority
to do so because teenagers are prohibited by law from buying alcoholic beverages.
Markets fall into one of two categories: consumer markets and business markets. These
categories are based on the characteristics of the individuals and groups that make up a specific
market and the purposes for which they buy products. A consumer market consists of pur-
consumer market Purchasers
and household members who chasers and household members who intend to consume or benefit from the purchased prod-
intend to consume or benefit ucts and do not buy products to make a profit. Consumer markets are sometimes also referred
from the purchased products to as business-to-consumer (B2C) markets. Each of us belongs to numerous consumer markets
and do not buy products to for all the purchases we make in categories such as housing, food, clothing, vehicles, personal
make profits services, appliances, furniture, recreational equipment, and so on, as we shall see in Chapter 6 .

AP Photo/PR NEWSWIRE Advertising Archives

Types of Markets Dockers advertises to consumer markets, whereas Xerox advertises to business markets.

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