Download Chapter 6: Developing Product and Brand Strategy

Chapter 3: Understanding
Markets and Customers
The Marketing Plan Handbook
Fourth Edition
Marian Burk Wood
3-1
What is a Market?

Market: All the potential buyers for
a particular product or service.
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Consumer vs. Business Markets
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5 Basic Levels of Market Definition
Level
Definition
Potential Market
All customers who may be interested in a
particular offering.
Available Market
Customers who are interested, possess
sufficient income, and have access to the
offering.
Qualified Available
Market
Customers who are qualified to buy
based on age or other criteria.
Target Market
Customers that the company intends to
target.
Penetrated Market
Customers who are already buying the
product.
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Markets Must Be Analyzed


Markets are always changing
Market analysis is performed to better
understand:




Needs,
Requirements
Behaviors, and
Attitudes
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Market Share



Market share : The percentage of total sales (dollars
or units) held by a particular company, brand, or
product.
Directly affects segmentation and targeting.
Serves as a baseline for understanding historical
market dynamics.
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Analyzing Consumer Markets
Information needs include:

Who?

What?

Where?

When?

Why?

How?
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Considerations for the
Consumer Market

Cultural

Social

Personal
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Consumer Market: Cultural
Considerations



Different approaches to buying situations.
Subcultures: Groups within a larger culture
that preserve distinct cultural identity.
Class: Levels of socioeconomic status.
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Consumer Market:
Social Considerations

Family Members.

Friends.

Work Groups.

Civic Organizations.
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Consumer Market:
Personal Considerations
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Personal factors include:

Family Life Cycle

Lifestyle

Psychological Makeup
Psychographic characteristics include:

Motivations

Perceptions

Attitudes
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Considerations for the
Business Market
Special Considerations for Businesses
Include:

Organizational Connections



Internal Players
Suppliers
Organizational Considerations


Company Characteristics
Derived Demand
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Organizational Connections:
Internal Players
Decisions Involve:




Those
Those
Those
Those
who
who
who
who
initiate the decision.
use the products/services.
evaluate the alternatives.
approve the release of funds.
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Organizational Connections:
Suppliers
To be considered:

Long-term Contracts.

Evaluations.

Requirements.

Other Elements.
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Organizational Considerations:
Company Characteristics
Company Characteristics Include:

Company’s Size and Industry.

Current Market Share and Growth.

Competitive Situation.

Buying Policies and Procedures.

Financial Constraints.

Timing of the Purchases.
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Organizational Considerations:
Derived Demand
Derived demand: Demand for business
products is based upon (derived
from) demand for related consumer
products.
B2B marketers be aware of changes in
derived demand.
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3-16
Planning Marketing Research

Secondary Research:



Information already collected for another
purpose.
More readily available and less expensive
than primary research.
Primary Research:

Research conducted to address a specific
situation.
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Secondary Research:
Some Cautions

Before using, check dates and sources.

Consider each source’s credibility.


Look into the sources cited by your
secondary source.
Be careful about applying general learning
to your specific situation.
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Primary Research

Problem Definition



What information is needed?
How will it be used?
Data Collection

Methods include:



Observation
Surveys
Experiments
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Primary Research Techniques:
Ethnographic Research

Ethnographic Research:

Helps marketers to:
Observing how
customers behave in actual product purchase or
usage situations, and asking to clarify the reasons for
behavior.



Develop new product ideas.
Fine-tune personal selling approaches.
Plan for other marketing attention.
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Primary Research Techniques:
Online Research

Research conducted via the Internet

Advantages:




Can be fielded relatively quickly.
Cost is relatively low.
Results can be made available in relatively short
order.
Also includes behavioral tracking: tracking
customers’ online activities.
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Primary Research Techniques:
Neuro-marketing


Uses brain science to investigate and
understand consumer reactions to
marketing activities.
Provides valuable insights into how
marketing programs are perceived and
processed.
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Using Marketing Research




Include research as a budget item in your
marketing plan.
Plan for research to help measure results.
Weigh the pros and cons of making a
decision based on limited data, or waiting
for research.
Be respectful of consumer privacy
concerns.
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All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
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Publishing as Prentice Hall
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