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MARKETING INFORMATION AND
MARKET SEGMENTATION
Chapter 4:
MARKETING INFORMATION AND
MARKET SEGMENTATION
4.1 – Developing marketing information
4.2 – Marketing research
4.3 – Market segmentation
4.4 – Market targeting
Chapter 4:
MARKETING INFORMATION
AND MARKET SEGMENTATION
Objectives
• Understand the importance of information for the company and for the
knowledge of the market and the needs and desires of consumers
• Analyze the Marketing Information System and its link with the Marketing
department
• Describe the process of market research
• Understand the importance of market segmentation for the development of
marketing strategies
• Apply criteria of segmentation of consumer markets and corporate markets,
highlighting the requirements for effective segmentation
• Understand how companies identify the most attractive market segments
and develop a target audience definition strategy
• Analyze how companies position their products in the market to obtain the
greatest competitive advantage possible
• Apply in a practical way the theoretical concepts previously studied
4.1. Developing marketing information
MARKETING INFORMATION SYSTEM (SIM in Spanish) is composed
of individuals, teams and procedures to collect, organize, analyze,
evaluate and distribute necessary and accurate information, at the
right time, for marketing decision making
Marketing Environment
Targeting Marketing channels Competitors Groups Macro factors
4.1. Developing marketing information
Assessment
needs
information What
company
wants
MIS must
be a
balanced
What between What is
company viable to
needs obtain
Internal Data
Marketing MARKETING
INFORMATION:
Intelligence SOURCES
Market research
4.1. Developing marketing information
Assessment
needs Development of required information
information
Internal Data
‐ Internal Controller: sales, costs, cash flows ...
‐ Production: yields, shipments, inventories ...
‐ Marketing: lifestyles, consumer behavior...
‐ MARKETING
Customer Service: customer satisfaction, service issues ...
‐ Sales force: distribution, competitors ... INFORMATION
Marketing Intelligence
Compilation and systematic analysis of public information on
competitors and the environment
Objectives: MARKETING
‐ Improve strategic decision making. INFORMATION
‐ Follow and evaluate the actions of the competitors.
‐ Early warning of threats and opportunities.
Origin:
‐ Internal: executives, engineers, buyers…
‐ External: suppliers, distributors, customers,
competitors.
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
Systematic process of designing, collecting, analyzing
and presenting information related to a specific
marketing situation
Market research
Market research
EXPLORATORY RESEARCH
The objective of exploratory research is to gather preliminary information
that will help define the problem and suggest hypotheses.
DESCRIPTIVE RESEARCH
Marketing research to better describe marketing problems, situations, or
markets, such as the market potential for a product or the demographics
and attitudes of consumers.
CAUSAL RESEARCH
Marketing research to test hypotheses about cause‐and‐effect
relationships
4.2. Marketing research
Assessment
needs Internal
information Data
Market research
Secondary • Available
data • Accesible
Research Contact Sample plan Instruments
approaches
• Observational • Mail, phone, personal • Sample unit • Questionnaires
Primary • Survey • Focus group interview • Sample size • Mechanical
data • Experimental • Online: internet and mobile • Sample devices
surveys, online focus groups, procedure
consumer tracking,
experiments, and online panels
and brand communities.
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
RESEARCH APPROACHES:
Observational Research:
Gathering primary data by observing relevant people, actions, and situations.
Importance of ethnographic perspective., a form of observational research that involves sending trained observers
to watch and interact with consumers in their “natural environments.” The goal is to immerse the researcher into
consumers’ lives to uncover unarticulated desires that might not surface in any other form of research.
Best suited for exploratory research
Survey Research:
Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying
behavior.
Best suited for descriptive research
Experimental Research:
Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling
related factors, and checking for differences in group responses. If the experiment is well designed and executed,
research and marketing managers can have confidence in the conclusions.
Best suited for causal research
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
CONTACT: Advantages and disadvantages
Mail Phone Personal Online
Flexibility Low Good Excellent Good
Data Quantity Good Normal Excellent Good
Control of the Excellent Normal Low Normal
interviewer’s influence
Sample control Normal Excellent Good Excellent
Data collection speed Low Excellent Good Excellent
Response rate Normal Good Good Good
Cost Good Normal High Excellent
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
SAMPLE PLAN:
» Sample: segment of the population selected to represent the population
as a whole.
» Decisions in relation to the sample:
1.‐ Sampling unit: Whom should we survey?
2.‐ Sample size: How many people should we survey?
3.‐ Sampling procedure: How should we choose the respondents?
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
INSTRUMENTS: questionnaire
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
INSTRUMENTS: questionnaire
4.2. Marketing research
Assessment
needs Development of required information
information
Market research
INSTRUMENTS: mechanical instruments
• Audiometers (Tv)
• Scanners
• Mobile phone GPS technologies to track consumer´ movements in and near
their stores
• EEG and MRI (Electroencephalographi and Magnetic Resonance Image)
• Skin censors
• Eye tracking
4.2. Marketing research
Assessment
needs Internal
information Data
Market research
• The researcher puts the marketing research plan into action. This involves collecting, processing and
analyzing the information. Researchers should watch closely to make sure that the plan is implemented
correctly. They must guard against problems with data collection techniques and technologies, data
quality, and timeliness. Researchers must also process and analyze the collected data to isolate
important information and insights. They need to check data for accuracy and completeness and code
them for analysis. The researchers then tabulate the results and compute statistical measures
• The market researcher must now interpret the findings, draw conclusions, and report them to
management. Managers and researchers must work together closely when interpreting research
results, and both must share responsibility for the research process and resulting decisions
4.3. Market segmentation
• Dividing a market into smaller groups with specific needs,
characteristics or behaviors that may require products or an
independent marketing mix.
Stages in the segmentation: selection, differentiation and
positioning in the market
SEGMENTATION DIFFERENTIATION
VALUE
CREATION
TARGETING POSITIONING
4.3. Market segmentation
4.3. Market segmentation
• How do we segment?
– Segmentation criteria could be combined
– As result of this, we will have:
• Segments which are not companys’ goals
• Different segments for different plans:
– Marketing plan for segment 1.
– Marketing plan for segment 2 and so on.
• Segmentation in corporate markets:
– Additional criteria: company characteristics, buying approach, management
characteristics
• Segmentation in international markets:
– Initial criteria: geographical location, language, economical, cultural, political
or legal factors
– Occasionally, intermarket segmentation: similar clients from different
markets
4.3. Market segmentation
• Criteria for effective segmentation:
‐ Measurable
‐ Accessible: can be achieved and effectively
addressed
‐ Substantial
‐ Differentiable: they react differently to a
marketing variable
‐ Actionable: specific actions can be performed in
each of these selected segments
4.4. Market targeting
• Evaluation of target markets:
– Factors to evaluate:
• Size and growth of the segment (the largest or fastest
growing segment is not always the most interesting for
the company)
• Structural attractiveness: strong competitors, current
and potential substitute products, bargaining power of
buyers or suppliers in the sector
• Objectives and resources of the company.
4.4. Market targeting
• Selection of target markets: Strategies
Micromarketing –
Differentiated
Customised
Undifferentiated marketing Focused marketing
marketing (local
marketing (mass) (segments, (niche)
marketing or
targeted)
individual)
4.4. Market targeting
• Marketing strategies: Undifferentiated marketing
It ignores the differences between segments and presents a
unique offer to the market
The company focuses
on similarities, not on
MARKETING MIX differences and
presents a single offer
to the entire market.
4.4. Market targeting
• Marketing strategies: Differentiated marketing
Attends to various segments of the market by designing independent
offers for each one. It assumes a higher cost: more products, lower
production yields, more communication expense ...