Classwork #3

I. Read this case study and and answer the question below.

Kellogg’s Appetite for Segmentation

Who eats breakfast? Marketers for the Kellogg Company want to know all about the market for
morning food and how changes in consumer behavior, needs, and lifestyle are affecting consumer
purchases. Kellogg offers a pantry full of products, from Rice Krispies cereal and Eggo waffles to Pop-
Tarts toaster pastries and Nutri-Grain nutrition bars. The company rings up more than $14 billion in
annual sales and invests more than $1 billion every year to market its breakfast and snack products.

Kellogg’s marketers recognize that consumers are not buying as much packaged cereal as they did 20
years ago. By identifying specific groups of customers who eat breakfast, and understanding the
benefits they seek, the foods they prefer, and the way they fit breakfast into their schedules, Kellogg
hopes to take a bigger bite out of this $10 billion market.

Consider the market for Pop-Tarts, a 50-year-old product that remains popular because it can be
heated in a hurry and eaten with one hand. Kellogg’s research shows that on-the-go teens eat Pop-
Tarts more often than younger children. Targeting this group, Kellogg put up a branded Facebook
page (with 5 million likes) and sponsors free concerts during the summer months, complete with Pop-
Tart backdrops for selfies. It now spends one-quarter of its advertising budget in digital media
preferred by teens.

Increasingly, consumers are seeking to boost protein intake at breakfast time. For these consumers,
Kellogg is emphasizing the nutritional value of cereal combined with milk and developing products
like Kellogg’s To Go ready-to-drink protein shakes.
Like Kellogg, most organizations trying to compete effectively must identify specific
customer groups toward whom they will direct marketing efforts. This includes developing
and maintaining marketing mixes that satisfy the needs of those customers. In this chapter,
we define and explore the concepts of markets and market segmentation. First, we discuss
the major requirements of a market. Then we examine the steps in the target market
selection process, including identifying the appropriate targeting strategy, determining
which variables to use for segmenting consumer and business markets, developing market
segment profiles, evaluating relevant market segments, and selecting target markets. We
conclude with a discussion of the various methods for developing sales forecasts.

What did you understand about Target Markets:

Segmentation and Evaluation?
II. Search for the meanings bellow

1. consumer market: pertains to buyers who purchase goods and services for consumption rather than
resale.
2. business market: The business market is defined as the selling of products and services to
other businesses to be resold or used to make other items or services for sale.
3. undifferentiated targeting strategy: occurs when the marketer ignores the apparent segment
differences that exist within the market and uses a marketing strategy that is intended to appeal to
as many people as possible.
4. homogeneous market: is one in which the potential buyers have similar wants and needs, at least
when evaluated from the perspective of a potential product.
5. heterogeneous market: are typically modified for each consumer or situation.
6. market segmentation is a marketing term that refers to aggregating prospective buyers into groups
or segments with common needs and who respond similarly to a marketing action.
7. market segment: is a group of people who share one or more common characteristics, lumped
together for marketing purposes. 
8. concentrated targeting strategy: is targeted to one specific market segment or audience.
9. differentiated targeting strategy: is a process that occurs when an organization simultaneously
pursues several different market segments, usually with a different strategy for each.
10.segmentation variables: The factors which are be used to segment a market
11.market density: Number of potential customers of a product within a unit of land area such as a
square-mile or square-kilometer.
12.geodemographic segmentation: is a multivariate statistical classification technique for discovering
whether the individuals of a population fall into different groups by making quantitative comparisons of
multiple characteristics with the assumption that the differences within any group should be less than
the differences between groups.
13.micromarketing: Micromarketing is an approach to advertising that tends to target a specific group of
people in a niche market.
14.benefit segmentation: the division of a market into groups or segments on the basis of the
particular benefit sought by each group from a product.
15.market potential: is the entire size of the market for a product at a specific time.
16.company sales potential: the maximum level of sales a company can expect to achieve in the
forecast period with its present and planned levels of marketing effort and expenditure and the
given set of market conditions.
17.breakdown approach: the process of dividing depreciation into separate components, assigning a
weight to each one, and then arriving at a depreciated value of the property.
18.buildup approach: method of estimating the revenue potential of an industrial market by identifying
the number of potential buyers in the market and the purchase requirements of each.
19.sales forecast: is the process of estimating future revenue by predicting the amount of product or
services a sales unit will sell in the next week, month, quarter, or year.
20.executive judgment: A sales forecasting method based on the intuition of one or more executives.
21.customer forecasting survey: is one of the techniques of demand forecasting that involves direct
interview of the potential consumers.
22.sales force forecasting survey: a forecast is based on the gross rollup of a set of opportunities.
23.expert forecasting survey: a sales forecasting method in which outside specialists or
industry experts - economists, academics, management consultants, advertising executives, etc. 
24.Delphi technique: s a forecasting process framework based on the results of multiple rounds of
questionnaires sent to a panel of experts.
25.time series analysis: is a statistical technique to analyze the pattern of data points taken
over time to forecast the future. 
26.trend analysis: is the process of comparing business data over time to identify any consistent
results or trends.
27.cycle analysis: is part of fundamental analysis of a company involving the examination of the stage
an industry is in at a given point in time.
28.seasonal analysis: refers to periodic fluctuations in certain business areas and cycles that occur
regularly based on a particular season.
29.random factor analysis: refers to a statistical technique that is used to identify the origin of the
randomly collected data.
30.regression analysis: is a statistical method used to find the relations between two or more
independent and dependent variables. 
31.market test: is an experiment conducted before the commercialization (launch) of a new product to
find out the facts about the product such as Is the product the right one