Page 171 - Foundations of Marketing

138 Part 2 | Marketing Research and Target Markets

Key Concepts

consumer market 116 differentiated targeting company sales expert forecasting
business market 117 strategy 120 potential 131 survey 134
undifferentiated targeting segmentation breakdown approach 131 Delphi technique 135
strategy 117 variables 121 buildup approach 132 time series analysis 135
homogeneous market 119 market density 126 sales forecast 133 trend analysis 135
heterogeneous market 119 geodemographic executive judgment 134 cycle analysis 135
market segmentation 120 segmentation 126 customer forecasting seasonal analysis 135
market segment 120 micromarketing 126 survey 134 random factor analysis 135
concentrated targeting benefit segmentation 129 sales force forecasting regression analysis 135
strategy 120 market potential 131 survey 134 market test 135

Issues for Discussion and Review

1. What is a market? What are the requirements for a 8. What dimensions are used to segment business markets?
market? 9. Define geodemographic segmentation. Identify several
2. In your local area, identify a group of people with types of firms that might employ this type of market
unsatisfied product needs who represent a market. segmentation, and explain why.
Could this market be reached by a business organization? 10. What is a market segment profile? Why is it an
Why or why not? important step in the target market selection
3. Outline the five major steps in the target market process?
selection process. 11. Describe the important factors that marketers should
4. What is an undifferentiated strategy? Under what analyze to evaluate market segments.
conditions is it most useful? Describe a present 12. Why is a marketer concerned about sales potential
market situation in which a company is using an when trying to select a target market?
undifferentiated strategy. Is the business successful? 13. Why is selecting appropriate target markets important
Why or why not? for an organization that wants to adopt the marketing
5. What is market segmentation? Describe the basic concept philosophy?
conditions required for effective segmentation. Identify 14. What is a sales forecast? Why is it important?
several firms that use market segmentation. 15. What are the two primary types of surveys a company
6. List the differences between concentrated and might use to forecast sales? Why would a company use
differentiated strategies, and describe the advantages an outside expert forecasting survey?
and disadvantages of each. 16. Under what conditions are market tests useful for sales
7. Identify and describe four major categories of variables forecasting? What are the advantages and disadvan-
that can be used to segment consumer markets. Give tages of market tests?
examples of product markets that are segmented by 17. Under what conditions might a firm use multiple
variables in each category. forecasting methods?

Marketing Applications

1. Despite customers using cell phones to tell the time, the Carrie is a 25 - to 40 -year-old woman. She might be
U.S. watch market is still worth about $ 10 billion. A single or married, with or without children, but she val-
new watch company that manufactures classic American ues her independence. She is a professional, living an
watches in the style of the Elgin and Hamilton brands urban lifestyle. She is brand conscious and makes well-
has identified five main segments in the U.S. watch informed purchasing decisions. She is often a fashion
market, using a combination of demographic, psycho- leader. Her annual household income exceeds $ 100,000 .
graphic, and behavioristic variables. She enjoys jazz, opera, ballet, and more “intellectual”

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