10. Market Segmentation, Persona, Targeting Flashcards
Create value for customers
- Select customers to serve
- Segmentation: Divide total market into smaller segments
- Targeting: Select the segment/ segments to enter - Decide on a value proposition
- Differentiation: Differentiate the market offering to create superior customer value
- Positioning: Position the market offering in the minds of target customers
Market segmentation
- distinct needs, characteristics, or behaviors that require separate marketing strategies/ mixes
- Geographic
- Demographic
- Psychographic
- Behavioral
Geographic segmentation
- different geographical units
- nations, regions, states, countries, cities, neighborhoods
Demographic segmentation
- based on age, life-cycle stage, gender, income, occupation, education, ethnicity, religion, generation, income
Psychographic segmentation
based on social class, lifestyle, personality characteristics
Behavioral segmentation
consumer knowledge + attitude, uses/ responses of/ to a product
- usage rate, loyalty status, user status
Requirements for effective segmentation
Measurable Accessible Substantial Differentiable Actionable
Measurable
the size, purchasing power, characteristics must be measurable
Accessible
segment must be effectively reached and served
Substantial
segment must be large enough and profitable enough to serve
Differentiable
conceptually different and respond differently to different marketing
Actionable
must be able to attract and be formulated
Persona
- fictional, generalized representations of business’ ideal customers
- help to understand customers better
- tailor content to specific needs, behaviors, concerns of different groups
- 1, 2 or 10, 20
Strongest buyers persona
based on market research and insights gathered from the actual customer base (survey, interview)
Target market
set of buyers who share common needs or characteristics that company decides to serve
- Undifferentiated
- Differentiated
- Concentrated
- Micromarketing
- Local
- Individual
Undifferentiated marketing
targets the whole market with one offer
- mass marketing
- focuses on common needs rather than what’s different
Differentiated marketing
targets several different market segments and designs separate offers for each
- goal is to achieve higher sales and stronger position
- more expensive than undifferentiated marketing
Concentrated marketing
target smaller section of a larger market segment = niche market
- limited company resources
- knowledge of the market
- more effective and efficient
Micromarketing
practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
- local marketing
- individual marketing
Local marketing
tailoring brand and promotion to the needs of local customer segments
- cities
- neighborhoods
- stores
Individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers
- one-to-one marketing
- mass customization
- online marketing - COOKIES
Market - Targeting Strategies
(Targeting broadly) Undifferentiated (mass) marketing -> Differentiated (segmented) marketing -> Concentrated ( niche) marketing -> Micromarketing (local or individual marketing) (targeting narrowly)
Choosing targeting strategy depends on
- Company resources: compete where you can win, and afford to
- Product variability: simple vs. complex
- Product life-cycle stage: new products to known buyers vs. existing products to new buyers
- Market variability: similarity of needs
- Competitors marketing strategies: differentiated vs. undifferentiated
