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SALES101: Marketing Fundamentals

Unit 2: Understanding Customers, Target Marketing, and Market Segmentation   When an organization thinks about marketing as a transaction—that is, as an exchange of goods or services between the organization and the customer—it is important for the organization to consider who its potential customers might be and how it can identify these people. This information helps a company decide what types of products and/or services it will offer, as well as how it will communicate to potential customers about the availability of its offerings (its products and/or services). How well a company understands its customers—its market—may also influence how the company develops its products and/or services. Without customers to purchase its offerings, a company doesn’t have a business.
 
A company may identify its customers by targeting demographic and psychographic characteristics. Demographics and psychographics refer to qualities that marketing professionals use to describe the potential customers for a product or service. These characteristics may include customers’ likes and dislikes as well as family income, gender, and/or education level. Following the research phase, a company may divide (or segment) its customers into target markets and begin to develop strategic sales leads for more successful sales transactions. In this unit of the course, you will learn more about understanding customers, identifying customers, and segmenting customer groups into specific markets.

Unit 2 Time Advisory
Completing this unit should take you approximately 8.5 hours.

☐    Subunit 2.1: 2.5 hours

☐    Subunit 2.2: 2 hours

☐    Subunit 2.3: 2 hours

☐    Subunit 2.4: 2 hours

Unit2 Learning Outcomes
Upon successful completion of this unit, you will be able to:
- identify the types of demographic and psychographic data that are used to develop a customer profile;
  - explain the importance of customer value and customer satisfaction;
  - explain the role of research in the marketing process;
  - define competition and explain competitive analysis; and
  - demonstrate the process of segmentation.

2.1 Understanding Customers   - Reading: Principles of Marketing: “Chapter 3: Consumer Behavior: How People Make Buying Decisions” Link: Principles of Marketing: “Chapter 3: Consumer Behavior: How People Make Buying Decisions” (PDF)

 Instructions: Read this chapter, which discusses a consumer’s
decision-making process and examines the situational, personal,
psychological, and social factors that have an impact on consumer
buying decisions. Understanding the behavior of potential customers
will help you understand how a company communicates with customers
and what offerings a company might develop in order to attract
specific types of customers. Be sure to take notes as you read and
respond to the discussion questions (but not the activities)
provided at the end of this chapter.  

 Reading this chapter, taking notes, and responding to the
discussion questions should take approximately 2 hours.  

 Terms of Use: This text was adapted by The Saylor Foundation under
a [Creative Commons Attribution-NonCommercial-Share-Alike 3.0
License](http://creativecommons.org/licenses/by-nc-sa/3.0/) without
attribution, as requested by the work’s original creator or
licensee.
  • Web Media: YouTube: Dr. Steven Van Hook’s “Publics & Demographics” Link: YouTube: Dr. Steven Van Hook’s “Publics & Demographics” (YouTube)

    Instructions: Watch this video, which discusses the concepts of publicsand demographics. To understand its potential customers, a company needs to be able to describe its customer groups (or publics) by common characteristics, also known as demographics. In this video, Dr. Steven Van Hook describes the key publics and demographics that affect a company’s segmentation process (a process that will be laid out in detail in Subunit 2.2, found below). Be sure to take notes as you watch this video.
     
    Watching this video and taking notes should take approximately 30 minutes.
     
    Terms of Use: Please respect the copyright and terms of use displayed on the webpage above.

2.2 Target Marketing and Segmentation   - Reading: Principles of Marketing: “Chapter 5: Market Segmenting, Targeting, and Positioning” Link: Principles of Marketing: “Chapter 5: Market Segmenting, Targeting, and Positioning” (PDF)

 Instructions: Read this chapter. You will learn more about *mass
marketing *and *targeted marketing*, two distinct types of marketing
strategies. Most companies today engage in targeted marketing
because it is a more cost-effective strategy. Segmenting a market,
targeting selected customer groups, and positioning specific
offerings are important steps for launching a successful
targeted-marketing campaign. Be sure to take notes as you read and
respond to the discussion questions (but not the activities)
provided at the end of this chapter.  

 Reading this chapter, taking notes, and responding to the
discussion questions should take approximately 2 hours.  

 Terms of Use: This text was adapted by The Saylor Foundation under
a [Creative Commons Attribution-NonCommercial-Share-Alike 3.0
License](http://creativecommons.org/licenses/by-nc-sa/3.0/) without
attribution, as requested by the work’s original creator or
licensee.

2.3 Marketing Research   - Reading: Principles of Marketing: “Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence” Link: Principles of Marketing: “Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence” (PDF)

 Instructions: Read this chapter, which explores marketing research
techniques, the concept of *market intelligence*, and the
information systems that organizations use to manage the data that
result from these processes. As you read, note that all
organizations and companies use many forms of information to learn
more about their potential customers and their potential
competition. Understanding potential customers is very important.
Without customers, a business will not be successful. And without a
means to gather information about its customers, a company will not
be able to increase its outreach to important populations and, by
extension, increase its sales potential. Understanding potential
customers also helps a company compete with other service providers,
since a company’s competitors are trying to reach the same customer
groups. Be sure to take notes as you read and respond to the
discussion questions (but not the activities) provided at the end of
this chapter.  

 Reading this chapter, taking notes, and responding to the
discussion questions should take approximately 2 hours.  

 Terms of Use: This text was adapted by The Saylor Foundation under
a [Creative Commons Attribution-NonCommercial-Share-Alike 3.0
License](http://creativecommons.org/licenses/by-nc-sa/3.0/) without
attribution, as requested by the work’s original creator or
licensee.

2.4 Marketing Discussion Forum Activity   - Activity: Unit 2 Discussion Forum Link: Unit 2 Discussion Forum (HTML)
 
Instructions: Click on the link above to access the online discussion forum for this course. Then, click on the discussion thread link for Unit 2 and post your responses to the questions provided. Feel free to start your own discussion thread, and/or respond to any threads started by other students.
 
Spend approximately 2 hours posting and participating in the discussion forum.