Chapter 3--Segmentation, Targeting, and Positioning Flashcards
What are the three actions in understanding a target market?
Segmentation, targeting, and positioning–STP
What is the total market?
Composed of customers and potential customers who meet thee criteria with respect to purchasing a given product: 1) ability, 2) willingness, and 3) authority. The is the potential market pool.
What is market segmentation?
The process by which companies follow the Marketing Concept by understanding and meeting specific customer needs. It assumes it is not possible to meet the needs of all the customers.
What is the segmentation process?
A series of planning steps that narrow the scope of the market so that companies can target their marketing efforts to appeal most effectively to those members of the overall market that are most likely to become customers.
What are the steps of the segmentation process?
1) Selection of industry/product category/overall market
2) Identification of segmentation bases
3) Profile and analysis of segments
4) Selection of target market(s)
5) Development of marketing mix for each identified target market
In segmentation, what is the purpose of selecting the industry/product category/overall market?
To understand the arena that is being entered: the set of competitors
In segmentation, what is the identification of segmentation bases?
Deciding which dimensions of customer needs are relevant to understanding buyer behavior in the selected market.
The marketer looks for 1) characteristics that are important in the buying decision and 2) characteristics that help distinguish different buying patterns
How are segmentation bases understood in consumer markets?
According to: Demographic characteristics Geographic characteristics Lifestyles (psychographic characteristics) Behaviors
How are segmentation bases understood in business markets?
According to: Customer type Geographic location Customer size Product use
In segmentation, how are identified segments profiled and analyzed?
Profile: outline the characteristics of the typical buyer in a market segment
Analyze: determining whether it is economically feasible to target a particular segment
What kind of questions are used in segmentation analysis?
1) Are there enough potential buyers in the segment?
2) Will customers in the segment be accessible, that is, can we reach them with our communications?
3) Will customers in the segment respond differently to different marketing efforts?
“No” answers imply poor potential for economic return for a unique marketing mix. In such a case, it may be best to place that segment into a larger, more general segment with a more general marketing mix.
In segmentation, what is target market selection?
Selection of an identified market segment on which a company will focus its marketing efforts. This is the outcome of the segmentation process.
What are the three different strategies for targeting?
1) Undifferentiated: segmentation is ignored, and a single marketing mix is used for the entire total market. This is almost never used today.
2) Differentiated: identifies multiple market segments to target, each with a unique marketing mix
3) Concentrated: identified one marketing segment (a niche market) to target all its marketing efforts upon. One segment; one marketing mix
What is one-to-one marketing an example of?
Extremely concentrated targeting, in which the target market is one customer.
In segmentation, when is a specific marketing mix developed?
When a target market is defined that will respond differently to a specific marketing mix than a more general one.
