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Chapter 4

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

Better use  Better


Pertinent
of  management
information
information of information
4.1. Developing marketing information
• Marketing Information System (MIS)*:
– Individuals, teams and procedures for collecting, 
organizing, analyzing, evaluating and distributing 
information, for marketing decision‐making.
1. Interacts with users of information to assess 
information needs
2. Develops the necessary information from :
• The internal database
• Marketing Intelligence Activities
• Market research
3. Distribute marketing information to managers to 
support their decisions
*In Spanish, MIS is SIM; wacht out
4.1. Developing marketing information
Marketing managers and other users of information
Obtaining customer and market information
Analysis Planning Implementation Organization Control

Marketing Information System (MIS)

Development of required information


Assessment
needs of  Internal Marketing  Market Analysis and 
information Data intelligence research use of 
information

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

1) The excess of information is just as bad as the scarcity of 


information.
2) Obtaining information is a cost: the company must decide if this
information can be profitable based on its cost.
4.1. Developing marketing information
Assessment
needs Development of required information
information

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

Advantages: fast / low cost


Disadvantages: data format / obsolescence of data. 
Requires investment in equipment and techniques.
4.1. Developing marketing information
Assessment
needs Development of required information
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

Definition of  Development  Execution of  Interpretation


the purpose  of research  research, data  of results and
and the  design to  collection and  preparation of
research  gather  analysis the final report
objectives information
4.2. Marketing research
Assessment
needs Development of required information
information

Market research

Definition of  Development  Execution of  Interpretation


the purpose  of research  research, data  of results and
and the  design to  collection and  preparation of
research  gather  analysis the final report
objectives information

 Define the problem


 Define the research objectives

 The manager must know / feel that something is wrong or that something


can be improved
 Once the problem is defined, the manager and the researcher must meet to 
define the objectives of the research
4.2. Marketing research
Assessment
needs Development of required information
information

Market research

Definition of  Development  Execution of  Interpretation


the purpose  of research  research, data  of results and
and the  design to  collection and  preparation of
research  gather  analysis the final report
objectives information

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

Definition of  Development  Execution of  Interpretation


the purpose  of research  research, data  of results and
and the  design to  collection and  preparation of
research  gather  analysis the final report
objectives information

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

Definition of  Development  Execution of  Interpretation


the purpose  of research  research, data  of results and
and the  design to  collection and  preparation of
research  gather  analysis the final report
objectives information

• 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 ...

MARKETING MIX 1 Segment 1

MARKETING MIX 2 Segment 2

MARKETING MIX 3 Segment 3

MARKETING MIX 4 Segment 4


4.4. Market targeting
• Marketing strategies:  Focused marketing (niche)
 It serves only a small part of the market (one or two segments). In this 
segment ‐ of smaller size ‐ it tries to have a significant share of the 
segment
 For companies with limited resources
 From the niche you can move to compete for the entire market

MARKETING MIX Segment 1


4.4. Market targeting
• Marketing strategies:  Micromarketing
 Particular marketing to individuals and local groups
a. Local Marketing :
» Customization of marketing products and programs at the 
level of cities, neighborhoods or even stores
» Raises costs and low economies of scale. Problems of 
logistics (supply ...)
b. Individual / Personal Marketing individual o personal:
» One‐to‐one marketing, mass customization or unit markets
» It specializes at the customer level
» It is favored by:
1) Informatics: management of BBDD
2) Customized production management
3) Cheap promotion tools: digital printing, Internet
‐ Very common in industrial marketing
‐ Tendency to auto‐marketing
4.4. Market targeting
• Selection of target markets. Strategies depend on:
– Companies’ resources
– Degree of product variability. Undifferentiated marketing is 
more suited for uniform products, such as grapefruit or steel. 
Products that can vary in design, such as cameras and cars, are 
more suited to differentiation or concentration
– Stage of the product life cycle = when reaching maturity, it 
tends to segment more
– Market variability = if buyers are similar and react similarly to 
market, concentrate. Otherwise, differentiate
– Competitors. When competitors use differentiated or 
concentrated marketing, undifferentiated marketing can be 
suicidal. Conversely, when competitors use undifferentiated 
marketing, a firm can gain an advantage by using 
differentiated or concentrated marketing, focusing on the 
needs of buyers in specific segments