Ch. 6 Customer-Driven marketing strategy: Creating Value for Target Customers Flashcards
Market segmentation
Dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.
Market targeting (targeting)
Evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Differentiation
Differentiating the market offering to create superior customer value.
Positioning
arranging your product so that it has a clear distinctive and desirable place in the market place compared to rivaling products
Arranging for a market offering
to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
What 4 things create value for targeted customers?
Differentiation, Positioning, Segmentation, Targeting
geographic segmentation
Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
Demographic segmentation
Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.
All about things related to things you would find in a census
age and life-cycle segmentation
Dividing a market into different age and life-cycle groups.
For example, Kraft promotes JELL-O to children as a fun snack, one that “taught the world to wiggle.” For adults, it’s a tasty, guilt-free indulgence—“the most sweet-tooth satisfaction 10 calories can hold.”
gender segmentation
Dividing a market into different segments based on gender.
Income segmentation
Dividing a market into different income segments.
Psychographic segmentation
Dividing a market into different segments based on social class, lifestyle, or personality characteristics.
All about things you would not find in a census
Behavioral segmentation
believed to be the best way to start marketing
Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product.
Occasion segmentation
Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.
based on when a buyer would buy or use the product
EX: advertising hot chocolate more in the winter
Benefit segmentation
Dividing the market into segments according to the different benefits that consumers seek from the product.
EX: having different kind of bikes for different desired results
user status
Markets can be segmented into nonusers, ex-users, potential users, first- time users, and regular users of a product. Marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users.
EX: P&G makes sure all hospitals use their diapers so that moms continue to use them
Williams-Sonoma invites newly weds to come make their wish lists during closed hours
usage rate
Markets can also be segmented into light, medium, and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption.
EX: Diner trucks focus on construction workers
Loyalty status.
Consumers can be loyal to brands (Tide), stores (Target), and companies (Apple).
EX: Mac lovers and windows lovers
PRISM
 By The Nielsen Company. PRIZM classifies every American household based on a host of demographic factors—such as age, education, income, occupation, family composi- tion, ethnicity, and housing—and behavioral and lifestyle factors, such as purchases, free-time activities, and media preferences.PRIZM classifies U.S. households into 66 demographically and behaviorally distinct segments, organized into 14 different social groups.
How do businesses segment the international markets?
geographic location, economic factors, political and legal factors, Cultural factors
geographic location segmentation by businesses for International markets
geographic location, grouping countries by regions such as Western Europe, the Pacific Rim, South Asia, or Africa. Geographic segmentation assumes that nations close to one another will have many common traits and behaviors.
economic factors segmentation by businesses for International markets
economic factors. Countries might be grouped by population income levels or by their overall level of economic development.
Ex: targeting the BRICKS
political and legal factors segmentation by businesses for International markets
such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy.
Cultural factors segmentation by businesses for International markets
can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.
Intermarket (cross-market) segmentation
Forming segments of consumers
who have similar needs and buying behaviors even though they are located in different countries.
EX: lexus targets the global elite
requirements for Effective segmentation
Measurable: The size, purchasing power, and profiles of the segments can be measured.
● Accessible: The market segments can be effectively reached and served.
● Substantial: The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than seven feet.
● Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks, they do not constitute separate segments.
● Actionable: (have thse capability as a company to meet the requirements of the segments EX: a big enough staff) Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment.
Target market
A set of buyers sharing common needs or characteristics that the company decides to serve.
What are the 4 Market-targeting strategies
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing (local or individual marketing)
undifferentiated (mass) marketing
A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.
Differentiated (segmented) marketing
A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
EX: P&G markets at least six different laundry detergent brands
Concentrated (niche) marketing
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.
EX: Cafe Pronto, whole foods, trader joes,
Micromarketing
Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing.
EX: ZARA
Local marketing
Tailoring brands and marketing to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores.
Individual marketing
Tailoring products and marketing programs to the needs and preferences of individual customers.
EX: Taylors, NikeID, M&M’s customized,
market variability
the amount by which there are different tastes and preferences in the market
product position is…
the way a product is defined by consumers on important attributes—the place the product occupies in con- sumers’ minds relative to competing products
perceptual positioning maps
what marketers draw that show consumer perceptions of their brands versus those of competing products on important buying dimensions
Competitive advantage
An advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices.
people differentiation—
hiring and training better people than their competitors do.
what is USP?
unique selling proposition EX: walmart low prices, burger king have it your way,
Important:
The difference delivers a highly valued benefit to target buyers.
Distinctive:
Competitors do not offer the difference, or the company can offer it ina more distinctive way.
Superior:
The difference is superior to other ways that customers might obtain the same benefit.
Communicable:
The difference is communicable and visible to buyers.
Preemptive:
Competitors cannot easily copy the difference.
Affordable:
Buyers can afford to pay for the difference.
Profitable:
The company can introduce the difference profitably.
What are the six differences to promote?
Importance, Distinctive, superiority, Communicability, Preemptive, Affordable, Profitable
Value proposition
The full positioning of a brand—the full mix of benefits on which it is positioned.
EX: BMW’s “ultimate driving machine” value proposition
How do you set up the value proposition table of a product (3 by 3 matrix)
more for more, more for the same, more for less
The same for less
Less for much less
Benefits on the y and cost on the x
EX of: more for the same
choosing a lexus over a BMW or mercedes
EX of : more for less
Very hard to do and some may do it well at first but then struggle in the longrun. EX: home depot when low’s came into play
EX of: same for less
walmart, DSW
EX of: Less for less
Very few are good at this or have the ability (funds) to do this EX: dollar tree, costco, Ramada Limited, Holiday Inn Express, and Motel 6 suspend some of these amenities and charge less accordingly.
Positioning statement
A statement that summarizes company or brand positioning using this form:
To (target segment and need) our (brand) is (concept) that (point of difference).
