Chapter 4 - Customer-driven marketing strategy: creating value for target customers Flashcards
What is geographic segmentation?
Diving market into different geographical units
Nations, states, regions, counties, cities, neighbourhoods
What is demographic segmentation?
Segmentation based on variables such as:
- gender
- family size
- family life cycle
- income
- occupation
- education
- religion
- race
- generation
- nationality
Other types of segmentation?
Gender Income User status Usage rate Loyalty status
What is psychographic segmentation?
Segmentation based on social class, lifestyle or personality characteristics
What is behavioural segmentation?
Segmentation based on:
- consumer knowledge
- attitudes
- uses/responses to a product
What is occasion segmentation?
Segmentation according to occasions when buyers get the idea to buy, actually make their purchase or used the purchased item
What is benefit segmentation?
Segmentation according to different benefits that consumers seek from product
What is undifferentiated marketing? (Mass)
Market-coverage strategy
Firm decides to ignore market segment differences
Go after whole market with one offer
What is differentiated marketing? (Segmented)
Market coverage strategy
Firm decides to several secular market segments
Designs separate offers for each
What is concentrated marketing? (Niche)
Market coverage strategy
Firm goes after large share of one market or a few segments/niches
What are the advantages/benefits of undifferentiated marketing?
1) Generic markets
2) Little diversity of needs between defined market segments
3) Large global companies with strong offerings (Apple)
4) Small/emerging sub markets where development of multiple marketing mixes would not be viable
What are the advantages/benefits of differentiated marketing?
1) Ideal for companies wishing to grow
2) Large companies wishing to protect market share
3) Firms who have assets/capital that can be leveraged into other markets
4) Diversity of consumer needs across market segments
What are the advantages/benefits of concentrated marketing?
1) Small firms just starting out (limited resources and expertise)
2) Firms with limited set of capabilities and skills
3) When competitive advantage is their reputation and expertise within well-defined, small market segment
4) Organisation has had financial difficulties and needs to conserve resources
What is micro marketing?
Tailoring products and marketing programmes
to needs and wants of specific individuals and local customer segments
What is local marketing?
Tailoring brands and promotions to needs and wants of local customer segments
Cities, neighbourhoods, specific stores
(FatFace/White Stuff - Abersoch)
What is individual marketing?
Tailoring products and marketing programmes to needs and preferences of individual customers
One-to-one marketing/customised marketing/markets-of-one marketing
What is production position?
The way the product is defined by consumers on important attributes
- the place the product occupies in consumers’ minds relative to competing products
What criteria should be satisfied by a brand difference to be worthy of going ahead?
Important
- delivers highly valued benefit to target buyers
Distinctive
- competitors do not offer same difference
Superior
- superior to other ways customers might be able to obtain same benefit
Communicable
- visible to buyers
Preemptive
- cannot be easily copied by competitors
Affordable
Profitable
What is a positioning statement?
Statement that summarises company/brand positioning
What is geodemographic positioning?
Grouping together small areas (postcodes) with similar
demographic profiles
Who created the demographic categories?
NRS (National Readership Survey)
What social status and occupation is social class A?
upper middle class
higher managerial, administrative or professional
What social status and occupation is social class B?
middle class
intermediate managerial, administrative or professional
What social status and occupation is social class C1?
lower middle class
supervisory or clerical, junior managerial, administrative or professional
What social status and occupation is social class C2?
skilled working class
skilled manual workers
What social status and occupation is social class D?
working class
semi and unskilled manual workers
What social status and occupation is social class E?
those at lowest level of subsistence
state pensioners or widows (no other earner), casual or lowest grade workers
What 6 factors should a marketing manager consider when selecting a target market segment?
1) Segment size and growth
2) Segment structural attractiveness
3) Company objectives and resources (actionability)
4) Risk
6) Accessibility
What 4 structural factors may affect the long-term segment attractiveness?
1) Strong and aggressive competitors
2) Many actual/potential substitutes
3) Buyers with strong bargaining power
4) Powerful suppliers
How might risk affect choosing a target market segment?
How badly will it go if things go badly?
Alternative to the NRS ABC1 classification system?
ACORN
What does ACORN stand for?
A Classification of Residential Neighbourhoods
What are some criticisms of the ABC1 classifications?
1) Skilled and unskilled workers relates back to industrial nation - no longer applies to now service nation
2) C2 plumbers may earn more than C1 bank clerks or B teachers
3) ABC1 accounts for 55% of population, but unrealistic to go after such large market
4) Reflects more rigid class system
5) Focussed too heavily upon income
What premise is ACORN based upon?
People who live near each other have similar consumer behaviour patterns
