The division of a market into different homogeneous groups of consumers is known as market segmentation.
Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ.
A market segment should be:
* measurable
* accessible by communication and distribution channels
* different in its response to a marketing mix
* durable (not changing too quickly)
* substantial enough to be profitable
A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets, as described below.
Consumer Market Segmentation:
A basis for segmentation is a factor that varies among groups within a market, but that is consistent within groups. One can identify four primary bases on which to segment a consumer market:
* Geographic segmentation is based on regional variables such as region,
climate, population density, and population growth rate.
* Demographic segmentation is based on variables such as age, gender,ethnicity,
education, occupation, income, and family status.
* Psychographic segmentation is based on variables such as values, attitudes,
and lifestyle.
* Behavioral segmentation is based on variables such as usage rate and
patterns, price sensitivity, brand loyalty, and benefits sought.
The optimal bases on which to segment the market depend on the particular situation and are determined by marketing research, market trends, and managerial judgment.
Business Market Segmentation :
While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases:
* Geographic segmentation - based on regional variables such as customer
concentration, regional industrial growth rate, and international
macroeconomic factors.
* Customer type - based on factors such as the size of the organization, its
industry, position in the value chain, etc.
* Buyer behavior - based on factors such as loyalty to suppliers, usage
patterns, and order size.
Profiling the Segments :
The identified market segments are summarized by profiles, often given a descriptive name. From these profiles, the attractiveness of each segment can be evaluated and a target market segment selected.
Custom Search
Monday, September 20, 2010
Saturday, September 18, 2010
Marketing Research
Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customers value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data must be collected and analyzed. The goal of marketing research is to provide the facts and direction that managers need to make their more important marketing decisions.
To maximize the benefit of marketing research, those who use it need to understand the research process and its limitations.
Marketing Research vs Market Research
These terms often are used interchangeably, but technically there is a difference.
Market research deals specifically with the gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing problems.
The Value of Information
Information can be useful, but what determines its real value to the organization? In general, the value of information is determined by:
* The ability and willingness to act on the information.
* The accuracy of the information.
* The level of indecisiveness that would exist without the information.
* The amount of variation in the possible results.
* The level of risk aversion.
* The reaction of competitors to any decision improved by the information.
* The cost of the information in terms of time and money.
The Marketing Research Process
Once the need for marketing research has been established, most marketing research projects involve these steps:
1. Define the problem
2. Determine research design
3. Identify data types and sources
4. Design data collection forms and questionnaires
5. Determine sample plan and size
Problem Definition
The decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. Thus, the decision problem is translated into a research problem. For example, a decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product.
The objective of the research should be defined clearly. To ensure that the true decision problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences.
Research Design
Marketing research can classified in one of three categories:
* Exploratory research
* Descriptive research
* Causal research
These classifications are made according to the objective of the research. In some cases the research will fall into one of these categories, but in other cases different phases of the same research project will fall into different categories.
Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test them. Exploratory research is characterized by its flexibility.
Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words, the who, what, where, when, why, and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun.
To maximize the benefit of marketing research, those who use it need to understand the research process and its limitations.
Marketing Research vs Market Research
These terms often are used interchangeably, but technically there is a difference.
Market research deals specifically with the gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing problems.
The Value of Information
Information can be useful, but what determines its real value to the organization? In general, the value of information is determined by:
* The ability and willingness to act on the information.
* The accuracy of the information.
* The level of indecisiveness that would exist without the information.
* The amount of variation in the possible results.
* The level of risk aversion.
* The reaction of competitors to any decision improved by the information.
* The cost of the information in terms of time and money.
The Marketing Research Process
Once the need for marketing research has been established, most marketing research projects involve these steps:
1. Define the problem
2. Determine research design
3. Identify data types and sources
4. Design data collection forms and questionnaires
5. Determine sample plan and size
Problem Definition
The decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. Thus, the decision problem is translated into a research problem. For example, a decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product.
The objective of the research should be defined clearly. To ensure that the true decision problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences.
Research Design
Marketing research can classified in one of three categories:
* Exploratory research
* Descriptive research
* Causal research
These classifications are made according to the objective of the research. In some cases the research will fall into one of these categories, but in other cases different phases of the same research project will fall into different categories.
Exploratory research has the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test them. Exploratory research is characterized by its flexibility.
Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words, the who, what, where, when, why, and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun.
Tuesday, September 14, 2010
Successful Marketing With Promotional Products
Successful marketing with promotional products is fairly simple to do. It takes a little forethought and planning, and some advertising, to make promotions sparkle, but the results are well worth the extra effort and expense.
Most companies plan out their marketing budget in advance, and that is a wonderful strategy. It allows the company to plan events over the yearly calendar, and allocate enough of the budget per event. Planning ahead also prevents problems like having too many events and not enough advertising budget to properly work all the events. Once the plan for events is on paper, the marketing department can begin to work on themes and details of the event planning. Thinking ahead lets the planner strategize creatively. Events can be related to each other for maximum impact, and promotional products to be used at each event can also be planned out, and tied in with each other, to increase impact. By using a theme for events, and sequential promotional product give aways, the target audience can be increased. The accompanying advertising must feature the promotional product items, and using photos in addition to text is helpful.
All this work and pre-planning should result in increased traffic, which is the goal of any event. You want the most people to attend, and also to remember your company and the event you sponsored or supported. The imprinted promotional products will do this job for you. Imprinting is one of the greatest benefits found in promotional items. There are hundreds of thousands of products to choose from, and it is easy to select those that go together if you want to do sequential promotions.
Your product supplier is well able to advise you with product selection and imprint designs. Use company or product logos, text messages, images, or event information on the products. Use color, readable text fonts, and size to best advantage, without looking tacky. There is a complete range of prices, and with larger quantities, there are discounts. It never hurts to order some extras for around the office, for employees, suppliers, or to give to new clients. For special corporate gifts, consider some of the better gifts such as luggage, glassware, golf umbrellas, or laptop bags.
When selecting promotional items for use at large events, conventions, or meetings, look for usefulness and durability. Find items that are affordable, but popular, for best advertising reach and message longevity.
Most companies plan out their marketing budget in advance, and that is a wonderful strategy. It allows the company to plan events over the yearly calendar, and allocate enough of the budget per event. Planning ahead also prevents problems like having too many events and not enough advertising budget to properly work all the events. Once the plan for events is on paper, the marketing department can begin to work on themes and details of the event planning. Thinking ahead lets the planner strategize creatively. Events can be related to each other for maximum impact, and promotional products to be used at each event can also be planned out, and tied in with each other, to increase impact. By using a theme for events, and sequential promotional product give aways, the target audience can be increased. The accompanying advertising must feature the promotional product items, and using photos in addition to text is helpful.
All this work and pre-planning should result in increased traffic, which is the goal of any event. You want the most people to attend, and also to remember your company and the event you sponsored or supported. The imprinted promotional products will do this job for you. Imprinting is one of the greatest benefits found in promotional items. There are hundreds of thousands of products to choose from, and it is easy to select those that go together if you want to do sequential promotions.
Your product supplier is well able to advise you with product selection and imprint designs. Use company or product logos, text messages, images, or event information on the products. Use color, readable text fonts, and size to best advantage, without looking tacky. There is a complete range of prices, and with larger quantities, there are discounts. It never hurts to order some extras for around the office, for employees, suppliers, or to give to new clients. For special corporate gifts, consider some of the better gifts such as luggage, glassware, golf umbrellas, or laptop bags.
When selecting promotional items for use at large events, conventions, or meetings, look for usefulness and durability. Find items that are affordable, but popular, for best advertising reach and message longevity.
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