MODULE 2

Marketing Management

SESSION TOPIC 2: Market Segments and Selecting Target Markets

LEARNING OUTCOMES:
The following specific learning objectives are expected to be realized at the end of the session:
1. Identifying Market Segments
2. Choosing Target Markets

KEY POINTS:

Target Market Market Segmentation Holistic Marketing Concept

Positioning Marketing Channels Modern Marketing Management

CORE CONTENT:

Introduction
Marketing management is the function and process of managing an organization's marketing
budget, personnel, and activities. In general, the goal of marketing management is to effectively and
efficiently use resources to increase customer base, improve customer perceptions of the organization's
products and services, and help the organization meet its goals and objectives as related to the marketing
function.

IN-TEXT ACTIVITIES:

Core Marketing Concepts

Needs, wants, and demands

Target markets, positioning, segmentation

Offerings and brands

Value and satisfaction
Marketing channels
Supply chain
Competition
Marketing environment
Marketing planning

Target Markets, Positioning, and Segmentation

Marketers start by dividing the market into segments, they identify and profile distinct groups of
buyers who might prefer or require varying product and service mixes by examining:

 Demographic
 Psychographic
 Behavioral Differences among Buyers

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MARN09B Marketing Management (for instructional materials use only)
 After identifying market segments, the marketers decide which present the greatest opportunities
– which are its target markets. The firm develops a market offering that it positions in the minds of the
target buyers as delivering some central benefit(s).

Offerings and Brands

Companies address customer needs by putting a value proposition, a set of benefits that satisfy
those needs. The intangible value proposition is made physical by an offering, which can be a
combination of products, services, and information.

A brand is an offering from a known source. All companies strive to build a brand image with as
many as strong, favorable, and unique brand associations as possible.

Example:

Value and satisfaction

Value, a central marketing concept, is primarily a combination of quality, service, and price –
called customer value triad. Value propositions increase with quality and service but decrease with price.

We can think of marketing as the identification, creation, communication, delivery and monitoring
of customer value. Satisfaction reflects a person’s judgment of a product’s perceived performance in
relationship to expectations.

Marketing Channels

 Communication
 Distribution
 Service

To reach a target market, the marketer uses three (3) kinds of marketing channels:

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MARN09B Marketing Management (for instructional materials use only)
1. Communication Channels – deliver and receive messages from target buyers and include
newspapers, magazines, radio, television, mail telephone, billboards, posters, fliers, and the internet.
2. Distribution Channels – to display, sell, or deliver the physical product or service(s) to the buyer or
user. These channels may be direct via the internet, mail, or mobile phone, or indirect with distributors,
wholesalers, retailers, and agents as intermediaries.

3. Service Channels – to carry out transactions with potential buyers, that include warehouses,
transportation companies, banks, and insurance companies.

Marketing Environment

Marketing Environment – consists of the task environment and the broad environment.

Task Environment – includes the employees engaged in producing, distributing, and promoting
the offering.

The New Marketing Realities

1. Major Societal Forces (12 Key Ones)

2. Network Information Technology
3. Globalization
4. Deregulation
5. Privatization
6. Heightened Competition
7. Industry Convergence
8. Retail Transformation
9. Disintermediation
10. Consumer Buying Power
11. Consumer Information
12. Consumer Participation
13. Consumer Resistance

1. Network Information Technology – the digital revolution has created an information age that
promises to lead to more accurate levels of production, more targeted communications and more relevant
pricing

2. Globalization – technological advances in transportation, shipping, and communication have made it

easier for companies to market in.

3. Deregulation – many countries have deregulated industries to create greater competition and growth
opportunities.

4. Privatization – many countries have converted public companies to private ownership and
management to increase their efficiency.

5. Heightened Competition– Increase competition among domestic and foreign brands raises
marketing costs and shrinks profit margins.

6. Industry Convergence – industry boundaries are blocking as companies recognize new

opportunities at the intersection of two or more industries.

7. Retail Transformation – store-based retailers face competition from catalog houses; direct mail
firms; TV direct-to-consumer ads; home shopping TV; and e-commerce.

8. Disintermediation – intervening in the traditional flow of goods through distribution channels.

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MARN09B Marketing Management (for instructional materials use only)
9. Consumer Buying Power – From the home, office, or mobile phone, consumer can compare product
prices and features and order goods online from anywhere in the world

10. Consumer Information – consumer can collect information in as much breath and depth as they
want about practically anything.

11. Consumer Participation – consumers have found an amplified voice to influence peer and public
opinion.

12. Consumer Resistance – many customers today feel there are fewer real product differences, so they
show less brand loyalty and become more price and quality sensitive in their search for value.

Company Orientation toward the Marketplace

 Production Concept
 Product Concept
 Selling Concept
 Marketing Concept

Production Concept – is one of the oldest concepts in business. It holds that consumer prefer products
that are widely available and inexpensive. Manager of production-oriented business concentrate on
achieving high production efficiency, low costs, and mass distribution.

Product Concept – proposes that consumers favor products offering the most quality, performance, or
innovative features. A new or improved product will not necessarily be successful unless it’s priced,
distributed, advertised and sold properly.

Selling Concept – holds that consumers and businesses won’t buy enough of the organization’s
products. Marketing based on hard selling is risky.

Marketing Concept – emerged in the mid 1950’s as a customer-centered, sense-and-respond

philosophy. The job is to find not the right customers for your products, but the right products for your
customers.

Holistic Marketing Concept

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MARN09B Marketing Management (for instructional materials use only)
Holistic Marketing Concept – is based on the development, design, and implementation of the
marketing programs, processes, and activities that recognize their breadth and interdependencies.
Holistic marketing acknowledges that everything matters in marketing.

The four broad components characterizing holistic marketing:

1. Relationship Marketing
2. Integrated Marketing
3. Internal Marketing
4. Performance Marketing

Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in
order to earn and retain their business.

Integrated marketing occurs when the marketer devises marketing activities and assembles marketing
programs to create, communicate, and deliver value for consumer.

Internal marketing is the task of hiring, training, and motivating able employees who want to serve
customers well.

Performance marketing requires understanding the financial and nonfinancial returns to business and
society from marketing activities and programs.

Updating The Four P’s of Marketing

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MARN09B Marketing Management (for instructional materials use only)
Modern Marketing Management Four P’s

 People
 Process
 Programs
 Performance

1. People – reflects internal marketing and the fact that employees are critical to marketing success.

2. Processes – reflects all the creativity, discipline, and structure brought to marketing management.

3. Programs – reflects all the firm’s consumer-directed activities. It compasses the old four P’s as well as
a range of other marketing activities that might not fit as neatly into the old view of marketing.

4. Performance – to capture the range of possible outcome measures that have financial and
nonfinancial implications.

Marketing Management Tasks

 Developing Marketing Strategies and Plans

 Capturing Marketing Insights
 Connecting with Customers
 Building Strong Brands
 Shaping the Marketing Offerings
 Delivering Value
 Communicating Value
 Creating Successful Long-Term Growth

SESSION SUMMARY

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MARN09B Marketing Management (for instructional materials use only)
 A target market is a group of customers with similar needs that forms the focus of a company's
marketing efforts. Similarly, target marketing involves tailoring the company's marketing efforts to appeal
to a specific group of customers.

ASSESSMENT/EVALUATION:

Assignment.

Instruction: Conduct market segmentation, target marketing, and market positioning on a specific
chosen company.

Essay of Quiz.
Instruction: Based on assignment given, what Marketing Channels do this company used? Explain
briefly and completely.

REFERENCES

Refer to the references listed in the syllabus of the subject.

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MARN09B Marketing Management (for instructional materials use only)