Chapter 7 Flashcards
2 steps to create value for targeted customers
1) select customers to serve (segmentation and targeting)
2) decide on value proposition (differentiation and positioning)
segmentation
divide market into smaller segments
targeting
select segment(s) to enter
differentiation
differentiate market offering to create superior customer value
positioning
position market offering in minds of target customers.
market segmentation
divide market into smaller segments with distinct needs, characteristics, or behaviors that may require separate marketing strats/mixes. (geographic, demographic, psychographis, behavioral)
multiple segmentation used to identify smaller, better-defined target groups
geographic segmentation
nations regions states counties cities neighborhoods etc.
demographic segmentation
age lifecycle stage gender income occupation education religion ethinicity generation
psychographic segmentation
social class lifestyle personality characteristics
behavioral segmentation
consumer knowledge attitudes use of product response to product (occasions, benefits sought, user status, usage rate, loyalty status)
requirements for effective segmentations
measurable (size, purchasing power, profiles of segments are measurable)
accessible (segments effectively reached/served).
substantial (segments large or profitable enough to serve).
differentiable (segments conceptually distinguishable and respond differently to different marketing mix elements/programs.
actionable (effective programs can be designed for attracting/serving segments.
evaluating market segments
size and growth
structural attractiveness
firm objectives/resouces
target market
set of buyers sharing common needs/characteristics company decides to serve
market targeting strategies
undifferentiated/mass marketing, differentiated/segmented marketing, concetrated/niche marketing, micromarketing/local/individual marketing.
mass marketing
targets whole market with one offer focusing on common needs rather than whats different
segmented marketing
targets different segments designing separate offers for each, goal to achieve higher sales/strong position, more expensive than mass marketing.
niche marketing
targets large segment of smaller market, limited company resources, knowledge of market, more effective/efficient.
micromarketing
tailoring products/marketing programs to suit tastes of specific individuals/locations.
local marketing
tailoring brands/promotions to needs and wants of local customer segments (cities, neighborhoods, stores).
individual marketing
tailoring products/marketing programs to needs/preferences of individual customers, AKA one-to-one marketing or mass customization.
selectine target market strategy
depends on:
company resources, product variability, product life-cycle stage, market variability, competitor’s marketing strategies.
product position
how product is defined by consumers on important attributes
positioning maps
shows consumer perceptions of marketers brands versus competing products on important buying dimensions
choosing differentiation and positioning strategy
identify set of possible competitive advantages ot build position (along lines of product, services, channels, people, image)
choose right competitive advanatges
select overall positioning strategy
communicate and deliver chosen position to market (often easier than implementing the position, usually takes long time, maintainign it requires consistent performance and communication).
