Market Segmentation and Distribution Channel Concepts

Market Share and Socioeconomic Status

Market share: Market share, sales = + real market.

Socioeconomic Status (SES) Breakdown

High SES:

• A: High rents in the community, given all the luxuries and amenities.
• B: High income; possess almost all the luxuries and modern amenities.
• C-1: Perimeter income sufficient to cover needs without problems.

Medium SES:

• C-2: Cover basic needs and only some additional needs.
• C-3: Cover basic needs and few amenities.

Low SES:

• D: Fixed and stable but reduced income; live very narrowly.
• E: Do not have steady income and experience extreme human poverty.

Company Size Classification

Company size is classified based on Unidades de Fomento (UF):

• Micro: Less than UF 2,400.
• Small: UF 2,400 to UF 25,000.
• Medium: UF 25,001 to UF 50,000.
• Large: More than UF 50,000.

Strategy Versus Demarketing for Segmented Markets

Segmentation Strategies

• Undifferentiated Segmentation Strategy: Reach all segments with a single strategy.
• Demarketing (Separate Plans): Specific demarketing plan for each segment.
• Concentration: Concentrating all marketing efforts in only one segment.

Distribution and Sales Concepts

Point of Sale and Channels

Point of Sale: Physical place where a consumer can access a particular product.

Distribution Channel: A set of institutions through which the company offers its products or services to final consumers.

Types of Distribution

• Indirect Distribution: An institution employed by the firm is a separate legal entity from the production company (sells through intermediaries, not directly to final consumers).
• Direct Distribution: Used for services, without intermediaries.

Direct Marketing

Direct Marketing: Selling directly to end consumers without using intermediaries.

Promotion and Persuasive Communication

Promotion: A set of alternatives whose main function is persuasive communication.

Promotional Tools

• Advertising: Utilization of mass communication; its main purpose is to inform, persuade, or remind about a product, brand, or company.
• Propaganda: Diffusion of ideas, political or religious, not commercial in use.
• Personal Selling: Uses people (sellers) as a means of communication and aims to close a sale.
• Public Relations: Uses mass media and personal communication; the goal is to create a good image of the company through various publications.
• Merchandising: All communication actions at the point of sale, executed by manufacturers to retailers. This includes the use of posters, displays, etc.
• Sales Promotion: All forms of communication whose objective is to obtain an immediate response.