PRODUCT + MARKET TARGETS

Company Products & Services

PRODUCT + MARKET TARGETS

CONTENTS

PRODUCT + MARKET TARGETS

The opportunities present a market increase when the industry recognize that the market is made up of customer groups with varying preferences, not all of whom are likely to be receiving complete satisfaction from the current offerings of sellers.

Markets can be segmented on geographic, demographic, and psychographic variables. To be ultimately useful, the segments should be measurable, accessible, and substantial.

Competitor firms have shown different targeting strategies towards the existence of market segments, some ignoring them (undifferentiated marketing), some developing a variety of products and some going after only a few segments (concentrated marketing). No particular strategy is superior to the others in all circumstances. Much depends on company resources, product homogeneity, product stage in the life cycle, market homogeneity, and competitive marketing strategies. The company must analyze the attractiveness of the different market segments as a prelude to selecting its target markets.

The analysis of market segments lies at the heart of marketing strategy. For marketing strategy involves two basic ideas. The first is the selection of target markets. The second is the development of effective marketing programmes to win these target markets.

 

MARKET SEGMENTATION

Every organization must make a determination not only of what needs to serve, but also whose needs. Most markets are too large for an organization to provide all the products and services needed by all the buyers in that market. Some delimitation of the market is necessary for the sake of efficiency and because of limited resources. This is the problem of selecting target markets.

Markets vary in their degree of heterogeneity. At one extreme, there are markets made up of buyers who are very similar in their wants, product requirements, and responses to marketing influences. For example, suppose all buyers of basic consumables wanted to buy the same amount per month and wanted the simplest packaging and the lowest price. Such a market would be homogeneous, and selling to it would be fairly straightforward. The market offers of competitors would probably be very similar.

At the other extreme there are markets made up of buyers seeking substantially different product qualities and/or quantities. For example, buyers of durable products are looking for different styles, sizes, colors, materials, and prices. Such a market is heterogeneous. It is made up of customer groups with different buying needs and interests. These groups are called market segments.

In a heterogeneous market, the company has three targeting options:

a)	They can introduce only one product, hoping to get as many people to buy it as possible. One calls this undifferentiated marketing.
b)	They can go after one particular market segment and develop the ideal product for them. One calls this concentrated marketing.
c)	They can introduce several product versions, each appealing to a different group. One calls this differentiated marketing.

Thus the determination of market segments and the determination of market targets are separate questions. Market segmentation is the process of identifying groups of buyers with different buying desires or requirements. Market targeting is the company's decision regarding which market segments to serve.

To illustrate, suppose a company wants to enter a particular market that seems attractive on the bases of demand measurement and forecasting. The company interviews a sample of customers and asks them to state the attributes (such as quality, price, style, service) they consider important in buying the product. Suppose they name two attributes, X and Y. Each consumer is also asked to state where he would like his ideal or preferred brand to be on the two attributes. The resulting preferences can be plotted as points in product space.


They will be distributed according to one of three basic patterns:

a) Homogeneous preferences

This shows a market where all the consumers have roughly the same preference. The market shows no natural segments, at least as far as the two attributes are concerned. We would predict that existing brands would be similar and located in the centre of the preferences.

 

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	MARKET ATTRIBUTES
	Concentrated Markets
	Un-concentrated Markets
	Market Preference : Homogeneous
	Market Preference : Diffused
	Market Preference : Clustered

H64      Grid Definition

b) Diffused preferences

At the other extreme, consumer preferences may be scattered fairly evenly throughout the space with no concentration. Consumers simply differ a great deal in what they want from the product. If one brand exists in the market, it is likely to be positioned in the centre because then it would appeal to the most people. A brand in the centre minimizes the sum of total consumer dissatisfaction. If a competitor came into the market, he could locate next to the first brand and engage in an all-out battle for market share. This is the typical situation in a political market where two candidates both go middle-of-the-road to gain the greatest following. The other choice is for the competitor to locate in some corner to gain the real loyalty of a customer group that is not satisfied with the centered brand. If there are several bands in the market, they are likely to eventually position themselves fairly evenly throughout the space and show real differences to match consumer preference differences.

 

c) Clustered preferences

An intermediate possibility is the appearance of distinct preference clusters. They may be called natural market segments.

The first firm to enter this market has three options:

1)	It might position itself in the centre hoping to appeal to all the groups (undifferentiated marketing)
2)	It might position itself in the largest market segment (concentrated marketing)
3)	It might develop many brands, each positioned in a different segment (differentiated marketing).

Clearly, if it developed only one brand, competition would come in and introduce brands in the other segments.


Thus when a company considers entering a market, it must carry out the following steps. First, it must determine those attributes along which to identify the possible existence of distinct market segments. Second, it must determine the size and value of the various market segments. Third, it must determine how the existing brands are positioned in the market. Fourth, it must look for opportunities consisting of market segments that are not being served or inadequately being served by existing brands. Fifth, it must determine correlated characteristics of attractive segments, such as their geographic, demographic and psychographic characteristics, because they suggest efficient methods of access to these segments.

 

1. REQUIREMENTS FOR EFFECTIVE SEGMENTATION


We still have to define attractive segments. The mere fact that a market segment is not being served, or is being served poorly, is not sufficient. Three additional conditions must be considered:

a) Measurability
The degree to which information exists or is obtainable on the particular buyer characteristic. Unfortunately, many suggestive characteristics are not susceptible to easy measurement. Thus it is hard to measure the respective number of buyers who are motivated primarily by considerations of price versus quality.

b) Accessibility
The degree to which the firm can effectively focus its marketing efforts on chosen segments. This is not possible with all segmentation variables. It would be nice if advertising could be directed mainly to opinion leaders, but their media habits are not always distinct from those of opinion followers.

c) Substantiality
The degree to which the segments are large and/or profitable enough to be worth considering for separate marketing cultivation. A segment should be the smallest unit for which it is practical to tailor a separate marketing programme. Segmental marketing is expensive and it would not pay, for example, for a supplier to develop special products for small markets.

2. BENEFITS OF SEGMENTATION

Segmentation is a relatively recent and revolutionary concept in marketing thinking. In earlier years many business firms saw the key to profits as being in the development of a single brand that was mass produced, mass distributed and mass communicated. This would lead to the lowest costs and prices and hence create the largest potential market. The firm would not recognize preference variations and would try to get everyone in the market to want what it produced.

As competition intensified, prices dropped and sellers' earnings declined. Sellers did not have much control over price because of the similarity of their product differentiation - that is, the introduction of differential features, quality, style, or image in their brands as a basis for asking a premium. This led to a proliferation of sizes, models, options and other characteristics. It is important to recognize however, that the product variations were not based on an analysis of natural market segments.

Market segmentation, the most recent idea for guiding marketing strategy, starts not with distinguishing product possibilities, but rather with distinguishing customer groups. Market segmentation is the subdividing of a market into distinct subsets of customers, where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix. The power of this concept is that in an age of intense competition for the mass market, individual sellers may prosper through developing brands for specific market segments whose needs are imperfectly satisfied by the mass-market offerings. The seller who is alert to the needs of different market segments may gain in three ways:

First, one is in a better position to spot and compare marketing opportunities. One can examine the needs of each segment against the current competitive offerings and determine the extent of current satisfaction. Segments with relatively low levels of satisfaction from current offerings may represent excellent marketing opportunities.

Second, the seller can make finer adjustments of his product and marketing appeals. Instead of one marketing programme aimed to draw in all potential buyers, the seller can create separate marketing programmes aimed to meet the needs of different buyers.

Third, the seller can develop marketing programmes and budgets based on a clearer idea of the response characteristics of specific market segments. One can allocate funds more efficiently to achieve the desired effects in different parts of the market.

	MARKET SEGMENTATION
	Market Potential Measurability
	Market Accessibility : Existing Products
	Market Accessibility : New Products
	Market Substantiality : Existing Products
	Market Substantiality : New Products

H65      Grid Definition

MARKET BASES

In the earlier illustration one used differences in buyer preferences or responses as the basis for market segmentation. This is a highly market-orientated basis for segmentation because it is addressed to differences in customer wants and there is still the question of access to any particular segment. Under the best circumstances, the buyer segment is distinguished not only by clear preferences but also by associated demographics and media habits. Thus if the people who want to buy expensive products are also those in the higher income and age brackets, their numbers, locations and media habits can be more readily identified.

Under many circumstances, however, the company can divide markets into segments based directly on geographic, demographic, or psychographic variables. One company may decide to produce products for one market segment and another company will concentrate on another. Product usage rate thus becomes the segmenting variable, although the company's success with the heavy-user market will depend on identifying some basic uniformities among consumers to which to appeal.

Good segmentation usually involves dividing the market by a succession of variables.

One can list most of the important variables used in segmenting consumer markets. Industrial markets are generally segmented according to such variables as end users, user needs, usage rate, marketing factor sensitivity and geographical location. One must always be open to the possibility of finding new segmentation variables and combinations that will reveal fresh marketing opportunities.


1. GEOGRAPHIC SEGMENTATION

In geographic segmentation, the market is divided into different locations, such as nations, states, counties, cities, or neighborhoods. The organization recognizes that market potentials and costs vary with market location. It determines those geographical markets that it could serve best.


2. DEMOGRAPHIC SEGMENTATION

In demographic segmentation, the market is subdivided into different parts on the basis of demographic variables, such as age, sex, family size, income, occupation, education, family life cycle, religion, nationality, or social class. Demographic variables have long been the most popular bases for distinguishing significant groupings in the market place. One reason is that consumer wants or usage rates are often highly associated with demographic variables; another is that demographic variables are easier to measure than most other types of variables.

A seller must be careful in his use of demographics because its influence on consumer product interest does not always operate in the expected direction.

Companies should realize that demographic segmentation is also a valid proposal for industrial markets as well as consumer markets. The industrial buyer also conforms to certain profiles and these affect his susceptibility to a sales proposition.

3. PSYCHOGRAPHIC SEGMENTATION

The third category of segmentation variables is the psychographic. Psychographic variables tend to refer to the individual and such aspects as his life-style, personality, buying motives, and product knowledge and use. People within the same demographic group can exhibit vastly different traits.

i. LIFE-STYLE
Life-style refers to the distinctive mode of orientation an individual or a group has toward consumption, work, and play. Companies are increasingly being drawn to life-style segmentation. They are targeting versions of their own life-style groups and studying new product opportunities arising out of life-style analysis.

ii. PERSONALITY
Companies have used personality variables to segment the market. They try to endow their products with brand personalities (brand image, brand concept) designed to appeal to corresponding consumer personalities (self images, self-concepts).

iii. BENEFITS SOUGHT
Buyers are drawn to products with different buying motives. An attempt is made to determine the demographic or psychographic characteristics associated with each benefit segment.

Further characteristics of each group may be found and the firm can choose the benefit it wants to emphasize, create a product that delivers it and direct a message to the group seeking that benefit.

Choosing a benefit group to market to has some difficulties. First, it is usually difficult to estimate the size of different benefit groups in the total population. It depends on the ease with which persons can cite one benefit as dominating their interest in the product. Second, the cited benefit might cover up something deeper. Finally, some buyers are interested in a particular benefit bundle rather than in a single benefit; this means the company may have to segment by benefit bundle groups.

iv. USER STATUS
Many markets can be segmented into non-users, ex-users, potential users, first-time users and regular users of a product. High market-share firms are particularly interested in going after potential users, whereas a small competitor will concentrate on trying to attract regular users to its brand. Potential users and regular users require different kinds of communication and selling efforts.

v. USAGE RATE
Many markets can be segmented into light-, medium-, and heavy-user groups of the product (called volume segmentation). Heavy-users may constitute only a small percentage of the numerical size of the market but a major percentage of the unit volume consumed. Naturally, companies will want to go after the "heavy half" of the market, because every heavy-user of their brand is worth several light-users. Unfortunately, when all the companies go after the same heavy-users, their campaigns look alike and cancel each other out.

The hope is that the heavy-users of a product have certain common demographics, personal characteristics, and media habits. User profiles are obviously helpful to the industry in developing pricing, message, and media strategies.

	MARKET BASES
	Geographic Segmentation
	Demographic Segmentation
	Psychographic Segmentation : Customer Factors
	Psychographic Segmentation : Product Usage Factors
	Psychographic Segmentation : Market Factors

H66       Grid Definition

vi. LOYALTY STATUS
Loyalty status describes the amount of loyalty that users have to a particular object. The amount of loyalty can range from zero to absolute. One can find buyers who are absolutely loyal to a brand, to a place, and so on.

Companies try to identify the characteristics of their hard-core loyal customers so that they can target their market effort to similar people in the population. One researcher found some brand-loyal customers in the consumer-staples category but concluded that they "were not identifiable by socioeconomic or personality characteristics, did not have different average demand levels from un-loyal customers, and did not differ in sensitivity to promotion". In this case, brand loyalty did not appear to be of a useful basis for market segmentation.

Furthermore, the concept of brand loyalty has some ambiguities. What may appear to be brand loyalty may be explainable in other ways. Suppose a buyer purchased brand B on the last seven shopping occasions. The purchase pattern BBBBBB would seem to reflect intrinsic preference for the product but may really reflect habit, indifference, a lower price, or the non-availability of substitutes. The pattern BBBBAAA for another buyer would seem to indicate a switch in loyalty but may only reflect the fact that the retailer dropped brand B, or that the buyer switched retailers, or that the buyer switched to brand A because of a price promotion. Marked brand continuity in brand-purchase sequences is not necessarily evidence that individual brand loyalty exists or is strong.

vii. STAGES OF READINESS
At any point of time, there is a distribution of people in various stages of readiness toward buying the product. Some members of the potential market are unaware of the product; some are aware; some are informed; some are interested; some are desirous; and some intend to buy. The particular order of people over stages of readiness makes a big difference in drafting the marketing programme.

Suppose a company wants to attract buyers to take a particular product. At the beginning, most of the potential market is unaware of the concept. The marketing effort should go into high-reach advertising and publicity using a simple message. If successful, more of the market will be aware of the product and the advertising should be changed to dramatizing the benefits of the products and the risks of not buying it, so as to move more people into a stage of desire. Distributions should also be readied for handling the large number of buyers who may be motivated to purchase the product. In general, the marketing programme must be adjusted to the changing distribution of readiness.

viii. MARKETING FACTORS
Markets can often be segmented into groups responsive to different marketing factors such as price and price deals, product quality and service. This information can help the company in allocating its marketing resources. The marketing variables are usually proxies for particular benefits sought by buyers. A company that specializes in a certain marketing factor will build up hard-core loyal customers seeking that factor or benefit.


The main conclusion from this discussion of market segmentation is that the industry may segment the market in many different ways. The goal is to determine the most decisive mode of segmentation - that is, the differences among buyers that may be the most consequential in choosing among them or marketing to them.

TARGET MARKETS

Mentioned earlier was the fact that the industry can choose one of three target market strategies in the face of market heterogeneity. Here one amplifies on the respective rationale of these strategies.


1. UNDIFFERENTIATED MARKETING

In undifferentiated marketing, the company chooses not to recognize the different market segments making up the market. It treats the market as an aggregate focusing on what is common in the needs of people rather than on what is different. It tries to design a product and a marketing programme that appeals to the broadest number of buyers. It relies on mass channels, mass advertising media and universal themes. It aims to endow the product with a superior image in people's minds, whether or not this is based on any real difference.

Undifferentiated marketing is primarily defended on the grounds of cost economies. It is thought to be "the marketing counterpart to standardization and mass production in manufacturing". The fact that the product line is kept narrow minimizes production, inventory and transportation costs. The undifferentiated advertising programme enables the firm to enjoy media discounts through large usage. The absence of segmental marketing research and planning lowers the costs of marketing research and product management. On the whole, undifferentiated marketing results in keeping down many costs of doing business.

Nevertheless, an increasing number of companies have expressed strong doubts about the optimal nature of this strategy.

For example, it is admitted that "some brands have very skillfully built up reputations of being suitable for a wide variety of people", but it is added, "In most areas audience groupings will differ, if only because there are deviants who refuse to consume the same way other people do . . . It is not easy for a brand to appeal to stable lower middle-class people and at the same time to be interesting to sophisticated, intellectual upper middle-class buyers . . . It is rarely possible for a product or brand to be all things to all people".

The firm practicing undifferentiated marketing typically develops a product and marketing programme aimed at the largest segment of the market. When several firms in the industry do this, the result is hyper-competition for the largest segment(s) and under-satisfaction of the smaller ones. The "majority fallacy," as this has been called, describes the fact that the larger segments may be less profitable because they attract disproportionately heavy competition. The recognition of this fallacy has led many firms to re-evaluate the opportunities latent in the smaller segments of the market.


2. DIFFERENTIATED MARKETING

Under differentiated marketing, a firm decides to operate in two or more segments of the market but designs separate products and/or marketing programmes for each. By offering product and marketing variations, one hopes to attain higher sales and a deeper position within each market segment and one hopes that a deep position in several segments will strengthen the customers' overall identification of the firm with the product field. Furthermore, one hopes for greater loyalty and repeat purchasing, because the firm's offerings have been bent to the customer's desire rather than the other way around.

In recent years an increasing number of firms have moved toward a strategy of differentiated marketing. This is reflected in trends toward multiple product offerings and multiple trade channels and media.

The net effect of differentiated marketing is to create more total sales than through undifferentiated marketing. It is ordinarily demonstrable that total sales may be increased with a more diversified product line sold through more diversified channels" However, it also tends to be true that differentiated marketing increases the costs of doing business.

The following costs are likely to be higher:

a) Product modification costs.  Modifying a product to meet different market segment requirements usually involves some R&D, technical, and/or special tooling costs.

b) Production costs.   Generally speaking, it is more expensive to produce m units each of n differentiated products than mn units of one product. This is especially true the longer the production setup time for each product and the smaller sales volume of each product. On the other hand, if each product is sold in sufficiently large volume, the higher costs of setup time may be quite small per unit.

c) Administrative costs.   Under differentiated marketing, the company has to develop separate marketing plans for the separate segments of the market. This requires extra marketing research, forecasting, sales analysis, promotion, planning and channel management.

d) Inventory costs.   It is generally more costly to manage inventories of differentiated products than an inventory of only one product. The extra costs arise because more records must be kept and more auditing done. Furthermore, each product must be carried at a level that reflects basic demand plus a safety factor to cover unexpected variations in demand. The sum of the safety stocks for several products will exceed the safety stock required for one product. Thus carrying differentiated products leads us to increased inventory costs.

e) Promotion costs.   Differentiated marketing involves trying to reach different segments of the market through advertising media most appropriate to each case. This leads to lower usage rates of individual media and the consequent forfeiture of quantity discounts. Furthermore, since each segment may require separate creative advertising planning, promotion costs are increased.

Since differentiated marketing leads to higher sales and higher costs, nothing can be said a priori regarding the perfectness of this strategy. Some firms are finding, in fact, that they have over-differentiated their market offers. They would like to manage fewer brands, with each appealing to a broader customer group. Called reverse line extension or broadening the base, they seek a larger volume for each brand.


3. CONCENTRATED MARKETING

Both differentiated marketing and undifferentiated marketing imply that the firm goes after the whole market. However, many firms see a third possibility, one that is especially appealing when the company's resources are limited. Instead of going after a small share of a large market, the firm goes after a large share of one or a few submarkets. Put another way, instead of spreading itself thin in many parts of the market, it concentrates its forces to gain a good market position in a few areas.

Through concentrated marketing the firm achieves a strong market position in the particular segments it serves, owing to its greater knowledge of the segments' needs and the special reputation it acquires. Furthermore, it enjoys many operating economies because of specialization in production, distribution, and promotion. If the segment of the market is well chosen, the firm can earn high rates of return on its investment.

At the same time, concentrated marketing involves higher than normal risks. The particular market segment can suddenly turn sour because of a change in buyer perceptions or attitudes, or a competitor may decide to enter the same segment. For these reasons, many companies prefer to diversify in several market segments.


4. SELECTING A MARKET TARGETING STRATEGY

Particular characteristics of the seller, the product, or the market serve to constrain and narrow the actual choice of a market targeting strategy.

a) The first factor is company resources.   Where the company's resources are too limited to permit complete coverage of the market, its only realistic choice is concentrated marketing.

b) The second factor is product homogeneity. Undifferentiated marketing is more suited for homogeneous products such as grapefruit or steel. Products that are capable of great variation are more naturally suited to differentiation or concentration.

c) The third factor is product stage in the life cycle.   When a firm introduces a new product into the market it usually finds it practical to introduce one or, at the most, a few product versions. One's interest is to develop primary demand, and undifferentiated marketing seems the suitable strategy; or it might concentrate on a particular segment. In the mature stage of the product life cycle, firms tend to pursue a strategy of differentiated marketing.

d) The fourth factor is market homogeneity.   If buyers have the same tastes, buy the same amounts for periods, and react in the same way to marketing stimuli, a strategy of undifferentiated marketing is appropriate.

e) The fifth factor is competitive market strategies.   When competitors are practicing active segmentation, it is hard for a firm to compete through undifferentiated marketing. Conversely, when competitors are practicing undifferentiated marketing, a firm can gain by practicing active segmentation if some of the other factors favor it.

MARKET SEGMENT DECISIONS

The problem facing the industry in seeking segmentation of their market is how to estimate the value of operating in each of the segments.

The firm that pursues differentiated marketing must know this in order to allocate its marketing effort over the various segments. The firm that pursues concentrated marketing must know this in order to decide which segments offer the best opportunities.

A useful analytical approach is illustrated by considering an example as a three stage exercise:

Stage 1 would show a segmentation of the market, using as two variables the customer-prospect mix and the product-service mix. The customer-prospect mix consists of various buyer groups. The product-service mix consists of products sold to these buyer groups. Cells result from this joint segmentation of the market. Each cell represents a distinct submarket, or product-market segment. A monetary figure is placed in each cell, representing the company's sales in that submarket.

Relative company sales in the submarkets provide no indication of their relative profit potential as segments. The latter depends upon market demand, company costs and competitive trends in each submarket.

Stages 2 and 3 would show how a particular product submarket can be analyzed in depth.

Stage 2 appraises present and future sales in the selected submarket. The vertical axis accommodates estimates of industry sales, company sales, and company market share. The horizontal axis is used to project future sales in the product groups and market shares.

Stage 3 probes deeper into the marketing thinking behind the sales forecasts of Stage 2. The horizontal axis shows the promotional mix that the company is using or plans to use to stimulate the sales of particular products to particular buyer group. The vertical axis shows the distribution mix that the company is using or plans to use for the particular product and the particular buyer group. The actual promotion-distribution mix could be detailed by placing budget figures (funds and men) in the relevant cells. The company will use all the types of distribution and rely mainly on specific selling approaches for stimulating sales to the particular buyer group.

By carrying out this analysis, the industry is led to think systematically about each segment as a distinct opportunity. This analysis of the profit potential of each segment, in conjunction with objectives, will help one to decide on a segmentation strategy.

	MARKET SEGMENT AVAILABILITY
	Customer-Prospect Mix Segment
	Product-Service Mix Segment
	Sub-market Segment: Present Sales Potential
	Sub-market Segment: Future Sales Potential
	Promotional-Distribution Mix Segment

H67      Grid Definition

HISTORIC FINANCIAL DATA

F_H - FIN_HIST.HTM   HISTORIC FINANCIAL DATA

 Financial Definitions

PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS

FINANCIAL DATA FORECAST

 

PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS BASED BALANCE SHEET FORECASTS

The PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS BALANCE SHEET FORECASTS section gives a series of Balance Sheet Forecasts for the industry using a number of assumptions relating to the Product and Market Targeting decisions available to the management of the industry.

The Balance sheet forecast given shows the effects of marketing improvements which Sales Management is likely to recommend:

PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS

- Base Forecast : Median Market Scenario

- Product Launch Marketing Expenditure Scenario

- Marketing Expenditure
- Market Segmentation
- Export Sales Improvement
- Distribution & Product Delivery Cost Objectives
- Research & Product Cost Objectives
- Target Markets Development
- Product Positioning
- Overseas Development

Managers in the industry will, in both the short-term and the long-term, have vital decisions to make regarding the marketing improvements, margins and profitability and these decisions will need to be evaluated in light of the customers, markets, competitors, products, industry and internal factors. The scenarios given isolate a number of the most important factors and provide balance sheet forecasts for each of the scenarios.

The data provides a short and medium term forecast covering the next 6 years for each of the Forecast Financial and Operational items. The Financial and Operational Data sections show each of the items listed below in terms of forecast data and covers a period of the next 6 years.

PRODUCT + MARKET TARGETS FINANCIAL ISSUES

Base Forecast : Median Market Scenario

F0M|     MEDIAN  FORECAST : Financials

G0M|     MEDIAN  FORECAST : Margins & Ratios

Product Launch Marketing Expenditure Scenario

FPL  PRODUCT LAUNCH MARKETING DATA 

IPL  PRODUCT LAUNCH MARKETING RATIOS  

Product Launch Marketing Expenditure Scenario

FPL|     PRODUCT LAUNCH MARKETING DATA : Financials

IPL|     PRODUCT LAUNCH MARKETING DATA : Margins & Ratios

Marketing Expenditure

F01|     MARKETING EXPENDITURE : Financials

G01|     MARKETING EXPENDITURE : Margins & Ratios

Market Segmentation

F03|     MARKET SEGMENTATION : Financials

G03|     MARKET SEGMENTATION : Margins & Ratios

Export Sales Improvement

F11|     EXPORT SALES IMPROVEMENT : Financials

G11|     EXPORT SALES IMPROVEMENT : Margins & Ratios

Distribution & Product Delivery Cost Objectives

F28|     DISTRIBUTION & PRODUCT DELIVERY COST OBJECTIVES : Financials

G28|     DISTRIBUTION & PRODUCT DELIVERY COST OBJECTIVES : Margins & Ratios

Research & Product Cost Objectives

F33|     RESEARCH & PRODUCT COST OBJECTIVES : Financials

G33|     RESEARCH & PRODUCT COST OBJECTIVES : Margins & Ratios

Target Markets Development

F41|     TARGET MARKETS DEVELOPMENT : Financials

G41|     TARGET MARKETS DEVELOPMENT : Margins & Ratios

Product Positioning

F43|     PRODUCT POSITIONING : Financials

G43|     PRODUCT POSITIONING : Margins & Ratios

Overseas Development

F47|     OVERSEAS DEVELOPMENT : Financials

G47|     OVERSEAS DEVELOPMENT : Margins & Ratios

FIN_DEFI.HTM Financial Definitions

INDEX

Accessibility, 8
Administrative costs, 21

ADVERTISING COSTS FORECAST, 38
AFTER-SALES COSTS FORECAST, 38

Balance Sheet Base Forecast : Median Market Scenario, 34
Balance Sheet Distribution & Product Delivery Cost, 52
Balance Sheet Export Sales Improvement, 48
Balance Sheet Historic, 28
Balance Sheet Market Segmentation, 44
Balance Sheet Marketing Expenditure, 40
Balance Sheet Overseas Development, 68
Balance Sheet Product Positioning, 64
Balance Sheet Research & Product Cost Objectives, 56
Balance Sheet Target Markets Development, 60
BENEFITS OF SEGMENTATION, 8
BENEFITS SOUGHT, 14
Broadening the base, 21

Clustered preferences, 7
Company resources, 21
Competitive marketing strategies, 21
Concentrated marketing, 2, 21
Concentrated Markets, 3
Costs & Margins Historic, 29
Customer-prospect mix, 22
Customer-Prospect Mix Segment, 23

Demographic Segmentation, 15
DEMOGRAPHIC SEGMENTATION, 13
Differentiated marketing, 2, 20
Diffused preferences, 7
Distribution mix, 22
DISTRIBUTION + HANDLING COSTS FORECAST, 38

Financial data definitions, 73
Financial forecast notes, 32
Financial Ratios Base Forecast : Median Market Scenario, 36
Financial Ratios Distribution & Product Delivery Costs, 54
Financial Ratios Export Sales Improvement, 50
Financial Ratios Market Segmentation, 46
Financial Ratios Marketing Expenditure, 42
Financial Ratios Overseas Development, 70
Financial Ratios Product Positioning, 66
Financial Ratios Research & Product Cost Objective, 58
Financial Ratios Target Markets Development, 62
Financial Ratios & Margins Historic, 30

GEOGRAPHIC SEGMENTATION, 13, 15

HISTORIC FINANCIAL DATA, 27
Homogeneous preferences, 2

Inventory costs, 21

LIFE-STYLE, 14
LOYALTY STATUS, 19

Market Accessibility : Existing Products, 9
Market Accessibility : New Products, 9
MARKET ATTRIBUTES, 3
MARKET BASES, 13, 15
Market homogeneity, 21
Market Potential Measurability, 9
Market Preference : Clustered, 3
Market Preference : Diffused, 3
Market Preference : Homogeneous, 3
MARKET SEGMENT AVAILABILITY, 23
MARKET SEGMENT DECISIONS, 22
MARKET SEGMENTATION, 1, 9
Market Substantiality : Existing Products, 9
Market Substantiality : New Products, 9
MARKETING COSTS FORECAST, 38
MARKETING FACTORS, 19
MARKETING FACTORS FORECAST, 39
MARKETING MARGINS + RATIOS FORECAST, 39
MARKETING OPERATIONAL RATIOS FORECAST, 39
MARKETING RATIOS FORECAST, 39
Measurability, 8

Operational Costs Base Forecast : Median Market, 35
Operational Costs Distribution & Product Delivery, 53
Operational Costs Export Sales Improvement, 49
Operational Costs Market Segmentation, 45
Operational Costs Marketing Expenditure, 41
Operational Costs Overseas Development, 69
Operational Costs Product Positioning, 65
Operational Costs Research & Product Cost Objectives, 57
Operational Costs Target Markets Development, 61
Operational Margins Base Forecast : Median Market, 37
Operational Margins Distribution & Product Delivery, 55
Operational Margins Export Sales Improvement, 51
Operational Margins Market Segmentation, 47
Operational Margins Marketing Expenditure, 43
Operational Margins Overseas Development, 71
Operational Margins Product Positioning, 67
Operational Margins Research & Product Cost Objectives, 59
Operational Margins Target Markets Development, 63
Operational Ratios & Margins Historic, 31

PERSONALITY, 14
Product homogeneity, 21
Product modification costs, 20
Product stage in the life cycle, 21
PRODUCT + MARKET TARGETS, 1
PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS FORECAST, 33
Production costs, 20
Product-service mix, 22
Product-Service Mix Segment, 23
PROFIT RATIOS FORECAST, 39
Promotion costs, 21
Promotional mix, 22
Promotional-Distribution Mix Segment, 23
Promotion-distribution mix, 22
PSYCHOGRAPHIC SEGMENTATION, 14
Psychographic Segmentation : Customer Factors, 15
Psychographic Segmentation : Market Factors, 15
Psychographic Segmentation : Product Usage Factors, 15

REQUIREMENTS FOR EFFECTIVE SEGMENTATION, 8
Reverse line extension, 21

SALES COSTS FORECAST, 38
Segmentation of the market, 22
Selected submarket, 22
SELECTING A MARKET TARGETING STRATEGY, 21
STAGES OF READINESS, 19
Substantiality, 8
Sub-market Segment: Future Sales Potential, 23
Sub-market Segment: Present Sales Potential, 23

TARGET MARKETS, 20
TOTAL MARKETING COSTS FORECAST, 38

Undifferentiated marketing, 2, 20
Un-concentrated Markets, 3
USAGE RATE, 14
USER STATUS, 14

CONTENTS

Accessibility
Administrative costs
Base Forecast : Median Market Scenario
BENEFITS OF SEGMENTATION
BENEFITS SOUGHT
broadening the base
Clustered preferences
Company resources
Competitive marketing strategies
CONCENTRATED MARKETING
concentrated marketing
Concentrated Markets
Customer-Prospect Mix Segment
customer-prospect mix
DEMOGRAPHIC SEGMENTATION
Demographic Segmentation
DIFFERENTIATED MARKETING
differentiated marketing
Diffused preferences
Distribution & Product Delivery Cost Objectives
distribution mix
Export Sales Improvement
GEOGRAPHIC SEGMENTATION
Geographic Segmentation
HISTORIC FINANCIAL DATA
Homogeneous preferences
Inventory costs
LIFE-STYLE
LOYALTY STATUS
Market Accessibility : Existing Products
Market Accessibility : New Products
MARKET ATTRIBUTES
MARKET BASES
MARKET BASES
Market homogeneity
Market Potential Measurability
Market Preference : Clustered
Market Preference : Diffused
Market Preference : Homogeneous
MARKET SEGMENT AVAILABILITY
MARKET SEGMENT DECISIONS
MARKET SEGMENTATION
MARKET SEGMENTATION
Market Segmentation
Market Substantiality : Existing Products
Market Substantiality : New Products
Marketing Expenditure
MARKETING FACTORS
Measurability
Overseas Development
PERSONALITY
PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS FORECASTS
PRODUCT + MARKET TARGETS
Product homogeneity
Product Launch Marketing Expenditure Scenario
Product modification costs
Product Positioning
Product stage in the life cycle
Product-Service Mix Segment
product-service mix
Production costs
Promotion costs
promotion-distribution mix USER STATUS
promotional mix
Promotional-Distribution Mix Segment
Psychographic Segmentation : Customer Factors
Psychographic Segmentation : Market Factors
Psychographic Segmentation : Product Usage Factors
PSYCHOGRAPHIC SEGMENTATION
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
Research & Product Cost Objectives
reverse line
segmentation of the market
selected submarket
SELECTING A MARKET TARGETING STRATEGY
STAGES OF READINESS
Sub-market Segment: Future Sales Potential
Sub-market Segment: Present Sales Potential
Substantiality
Target Markets Development
TARGET MARKETS
Un-concentrated Markets
UNDIFFERENTIATED MARKETING
undifferentiated marketing
USAGE RATE

PRODUCT + MARKET TARGETS
MARKET SEGMENTATION
Homogeneous preferences
Diffused preferences
Clustered preferences
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
Measurability
Accessibility
Substantiality
BENEFITS OF SEGMENTATION
MARKET BASES
GEOGRAPHIC SEGMENTATION
DEMOGRAPHIC SEGMENTATION
PSYCHOGRAPHIC SEGMENTATION
LIFE-STYLE
PERSONALITY
BENEFITS SOUGHT
USER STATUS
USAGE RATE
LOYALTY STATUS
STAGES OF READINESS
MARKETING FACTORS
TARGET MARKETS
UNDIFFERENTIATED MARKETING
DIFFERENTIATED MARKETING
Product modification costs
Production costs
Administrative costs
Inventory costs
Promotion costs
CONCENTRATED MARKETING
SELECTING A MARKET TARGETING STRATEGY
Company resources
Product homogeneity
Product stage in the life cycle
Market homogeneity
Competitive marketing strategies
MARKET SEGMENT DECISIONS
HISTORIC FINANCIAL DATA
PRODUCT + MARKET TARGETS FINANCIAL SCENARIOS FORECASTS
MARKET ATTRIBUTES
Concentrated Markets
Un-concentrated Markets
Market Preference : Homogeneous
Market Preference : Diffused
Market Preference : Clustered
MARKET SEGMENTATION
Market Potential Measurability
Market Accessibility : Existing Products
Market Accessibility : New Products
Market Substantiality : Existing Products
Market Substantiality : New Products
MARKET BASES
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation : Customer Factors
Psychographic Segmentation : Product Usage Factors
Psychographic Segmentation : Market Factors
MARKET SEGMENT AVAILABILITY
Customer-Prospect Mix Segment
Product-Service Mix Segment
Sub-market Segment: Present Sales Potential
Sub-market Segment: Future Sales Potential
Promotional-Distribution Mix Segment
Base Forecast : Median Market Scenario
Product Launch Marketing Expenditure Scenario
Marketing Expenditure
Market Segmentation
Export Sales Improvement
Distribution & Product Delivery Cost Objectives
Research & Product Cost Objectives
Target Markets Development
Product Positioning
Overseas Development