Chapter 7: customer value Flashcards
market segmentation
dividing the market into different groups of buyers who have different needs, characteristics or behaviors and who might require separate marketing strategies
market targeting
evaluating each segment’s attractiveness and selecting one or more segments to serve
Differentiation
Actually differentiating the market offering to create superior customer value
Positioning
arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of target customers
market segmentation
dividing markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs
demographic segmentation
dividing the market into segments based on variables such as age, life cycle stage, gender, income, occupation, education, religion, ethnicity and generation
geographic segmentation
dividing the market into different geographical units such as nations, states, regions, countries, cities or even neighbourhoods
psychographic segmentation
dividing the market into different segments based on lifestyle and personality characteristics
behavioral segmentation
divide the market in segments based on consumer knowledge, attitudes, uses of a product or responses to the product
occasion segmentation
divide the market into segments according to occasions when buyers get the idea to buy, make the purchase or use an item
Benefit segmentation
divide the market into segments according to the different benefits that consumers seek from the product
User status
Markets can be segmented into non users, ex-users, potential users and regular users of a product
usage rate
markets segmented into light, medium and heavy product users
loyalty status
market segmented by consumer loyalty by looking at customers who are shifting away
Using multiple segmentation bases
marketers usually use multiple segmentation bases in an effort to identify smaller, better defined target groups
Intermarket (cross market) segmentation
form segments of consumers who have similar needs and buying behaviors even though they are located in different countries
Requirements for effective segmentation
- measurable: size, purchasing power and profiles can me measured
- accessible: can be effectively reached and served
- substantial: large and profitable enough
- differentiable: distinguishable and respond differently to different marketing mix elements and programs
- actionable: effective programs can be designed for attracting and serving the segments
factors to evaluate market segments
- segment size and growth
- structural attractiveness
- company objectives and resources
target market
set of buyers who share common needs or characteristics that a company decides to serve
undifferentiated marketing
marketing-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with no offer
differentiated marketing
strategy in which firms target several market segments and designs separate offers for each
concentrated marketing
strategy in which a firm goes after a large share of one or a few market segments or niches
micromarketing
tailor products and marketing programs to the needs and wants of specific individuals and local customer segments
local marketing
tailor brands and marketing to the needs and wants of local customer segments
individual marketing
tailor products and marketing programs to the needs and preferences of individual customers
factors for choosing a targeting strategy
companies consider factors such as product variability, resources, product life cycle and market variability
market variability
if most buyers have the same tastes and behavior, undifferentiated marketing is appropriate
value proposition
How it will create differentiated value for targeted segments and what positions it wants to occupy in those segments
Product position
the way a product is defined by consumers on important attributes - the place it occupies in consumers minds relative to competing products
positioning maps
diagrams that show consumer perceptions of their brands versus those of competing products on important buying dimensions
competitive advantage
an advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices
more for more
providing the most upscale product and charging a higher price
more for the same
offering more for the same price
same for less
premium products at non premium prices
less for much less
offer less and cost less
more for less
best product selection and lowest prices
positioning statement
statement that summarises company or brand positioning using the following form:
to (target segment and need) our (brand) is (concept) that (point of difference)
