Ch. 6 Customer-Driven marketing strategy: Creating Value for Target Customers

Question 1

Market segmentation

Answer 1

Dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Question 2

Market targeting (targeting)

Answer 2

Evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Question 3

Differentiation

Answer 3

Differentiating the market offering to create superior customer value.

Question 4

Positioning

Answer 4

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.

Question 5

What 4 things create value for targeted customers?

Answer 5

Differentiation, Positioning, Segmentation, Targeting

Question 6

geographic segmentation

Answer 6

Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods

Question 7

Demographic segmentation

Answer 7

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

Question 8

age and life-cycle segmentation

Answer 8

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.”

Question 9

gender segmentation

Answer 9

Dividing a market into different segments based on gender.

Question 10

Income segmentation

Answer 10

Dividing a market into different income segments.

Question 11

Psychographic segmentation

Answer 11

Dividing a market into different segments based on social class, lifestyle, or personality characteristics.
All about things you would not find in a census

Question 12

Behavioral segmentation

Answer 12

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.

Question 13

Occasion segmentation

Answer 13

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

Question 14

Benefit segmentation

Answer 14

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

Question 15

user status

Answer 15

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

Question 16

usage rate

Answer 16

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

Question 17

Loyalty status.

Answer 17

Consumers can be loyal to brands (Tide), stores (Target), and companies (Apple).
EX: Mac lovers and windows lovers

Question 18

PRISM

Answer 18

 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.

Question 19

How do businesses segment the international markets?

Answer 19

geographic location, economic factors, political and legal factors, Cultural factors

Question 20

geographic location segmentation by businesses for International markets

Answer 20

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.

Question 21

economic factors segmentation by businesses for International markets

Answer 21

economic factors. Countries might be grouped by population income levels or by their overall level of economic development.
Ex: targeting the BRICKS

Question 22

political and legal factors segmentation by businesses for International markets

Answer 22

such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy.

Question 23

Cultural factors segmentation by businesses for International markets

Answer 23

can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.

Question 24

Intermarket (cross-market) segmentation

Answer 24

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

Question 25

requirements for Effective segmentation

Answer 25

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.

Question 26

Target market

Answer 26

A set of buyers sharing common needs or characteristics that the company decides to serve.

Question 27

What are the 4 Market-targeting strategies

Answer 27

Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing (local or individual marketing)

Question 28

undifferentiated (mass) marketing

Answer 28

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Question 29

Differentiated (segmented) marketing

Answer 29

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

Question 30

Concentrated (niche) marketing

Answer 30

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,

Question 31

Micromarketing

Answer 31

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

Question 32

Local marketing

Answer 32

Tailoring brands and marketing to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores.

Question 33

Individual marketing

Answer 33

Tailoring products and marketing programs to the needs and preferences of individual customers.
EX: Taylors, NikeID, M&M’s customized,

Question 34

market variability

Answer 34

the amount by which there are different tastes and preferences in the market

Question 35

product position is…

Answer 35

the way a product is defined by consumers on important attributes—the place the product occupies in con- sumers’ minds relative to competing products

Question 36

perceptual positioning maps

Answer 36

what marketers draw that show consumer perceptions of their brands versus those of competing products on important buying dimensions

Question 37

Competitive advantage

Answer 37

An advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices.

Question 38

people differentiation—

Answer 38

hiring and training better people than their competitors do.

Question 39

what is USP?

Answer 39

unique selling proposition EX: walmart low prices, burger king have it your way,

Question 40

Important:

Answer 40

The difference delivers a highly valued benefit to target buyers.

Question 41

Distinctive:

Answer 41

Competitors do not offer the difference, or the company can offer it ina more distinctive way.

Question 42

Superior:

Answer 42

The difference is superior to other ways that customers might obtain the same benefit.

Question 43

Communicable:

Answer 43

The difference is communicable and visible to buyers.

Question 44

Preemptive:

Answer 44

Competitors cannot easily copy the difference.

Question 45

Affordable:

Answer 45

Buyers can afford to pay for the difference.

Question 46

Profitable:

Answer 46

The company can introduce the difference profitably.

Question 47

What are the six differences to promote?

Answer 47

Importance, Distinctive, superiority,
Communicability,
Preemptive,
Affordable,
Profitable

Question 48

Value proposition

Answer 48

The full positioning of a brand—the full mix of benefits on which it is positioned.
EX: BMW’s “ultimate driving machine” value proposition

Question 49

How do you set up the value proposition table of a product (3 by 3 matrix)

Answer 49

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

Question 50

EX of: more for the same

Answer 50

choosing a lexus over a BMW or mercedes

Question 51

EX of : more for less

Answer 51

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

Question 52

EX of: same for less

Answer 52

walmart, DSW

Question 53

EX of: Less for less

Answer 53

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.

Question 54

Positioning statement

Answer 54

A statement that summarizes company or brand positioning using this form:

To (target segment and need) our (brand) is (concept) that (point of difference).