Chapter 6 Flashcards
Market segmentation
Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries that have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.
STP marketing approach
STP marketing is a three-step approach to building a targeted marketing plan. The “S” stands for segmenting, the “T” for targeting and the “P” for positioning. Basically, STP marketing involves breaking down large broader markets into more manageable submarkets or customer segments.
Lead/heavy users definition
committed users
Brand-freaks
Consumers who are so committed to the brand that their consumer behavior toward it borders on the pathological.
Switchers
Consumers who often buy what is on sale or choose brands that offer discount coupons or other price incentives.
Emergent consumers definition
Their brand preferences are still under development
Point-of-entry-marketing
Developing advertising campaigns to win with first-time users
Demographic segmentation
Selecting target segments by including basic descriptors such as age, gender, race marital status, income, occupation.
Application of demographic information
- Used to describe or profile segments that have been identified with some other variable, for example product usage.
- Used frequently as the starting point in market segmentation.
Geodemographic segmentation definition
identifies neighborhoods (by zip codes) that share common demographic characteristics.
Psychographics definition
Form of research that emphasizes the understanding of consumers activities, interests, and opinions (AIOs)
Benefit segmentation definition
Target segments are delineated by the various benefit packages that different consumers want from competing products and brands.
Business markets definition
Institutional buyers who purchase items to be used in other products and services or to be resold to other businesses or households.
PRIZM definition
Potential rating index by zip marketing.
How to prioritize segments? Selection criterions
- What the members of the segment want versus the organizations ability to provide it?
- Size and growth potential of the segment?
- Return on Investment
- What is the competitive field?
- Niche marketing - does the segment represents an untapped niche
- Can you effectively deliver to the segment (e.g., the logistics)
Competitive field definition
Companies that compete for the segments business
Niche marketing definition
Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micromarketing.
Brand’s best opportunity for success involves the overlapping of 4 important factors - Bahr InterBrand Positioning Opportunity Method
- Relevance: where is the strong consumer connection? What is the revealed need(s) of consumers?
- Differentiation: can the brand stand out as significantly different than others?
- Credibility: will consumers believe it?
- Stretch: Will the brands meaning have continued relevance in changing times? Will it foster brand extension?
Positioning strategy
- Deliver on promise
- Make it consistent
- Make it different simply
Value proposition definition
What value the brand will be to the customer - its a statement of the functional, emotional, and/or self-expressive benefits delivered by the brand. These benefits as a set justify the price of the product or service. It should be the guiding principle of all creative IBP activity. McDonalds example
Brand platform definition
a core idea that frames an ambition or aspiration for the brand that will be relevant to target audiences over time
Strategic planning triangle (E. Thorson and J. Moore)
- Identification and profile target segments
- Consolidate and value proposition for the brand
- Select a mix of persuasion tools
Segmenting definition
Break down diverse markets into manageable segments
Targeting definition
Choose specific segments as the focal points for IBP efforts
Positioning definition
Emphasize a theme(s) that aligns with the target segment(s)
STP strategies must evolve
the IBP field is dynamic so brands must constantly assess and update their STP strategies
The STP Cycle (constant maintenance is required)
- Re-assess segmentation strategy
2. Pursue product differentiation
Re-assess segmentation strategy (The STP Cycle)
- Are there new and better ways to meet the target market’s needs?
- Should you change the target and reposition the brand accordingly?
Pursue product differentiation (The STP Cycle)
- Emphasize / create differences that distinguish the brand from its competitors
- ADV and IBP become critical; they must help convince consumers that the difference is meaningful
Usage patterns and commitment levels (segmentation methods)
heavy users
nonusers - the lowest level of opportunity
brand loyal users
switchers/variety seekers - a costly target segment
emergent users
Emergent users definition
an important business opportunity (point-of-entry marketing)
How are demographics generally used?
- In combination with another criteria (usage patterns)
* As a starting point for segmentation
Summary of Segmentation Methods (5 primary criteria)
- Usage patterns & commitment levels
- demographics
- geography
- AOIs
- Benefit(s)
Effective Positioning
is one of the most important decisions faced by advertisers; must demonstrate value to the target
Developing the Positioning Theme (4 common themes)
♠ Benefit - emphasize the primary benefit consumers can expect (functional, emotional, self-expressive).
♠ User - focus on the target; who should reap the brand’s value
♠ Competitive - emphasize your brand’s value(s) via an explicit comparison to the competition
♠ Hybrid - combine themes
Self-expressive benefits
They heighten the connection between the brand and the customer by focusing on something linked to his or her personality. Self-expressive benefits focus on the act of using the product, as opposed to the emotional benefits associated with the result of using the product.
