Chapter 7. Customer Value-Driven Marketing Strategy Flashcards
What are the two halves of a Marketing Strategy?
- Selecting customers to serve
- Decide on the value proposition
What activities occur under the first half of the Marketing Strategy?
- Market Segmentation
- Market Targeting
Define Segmenting
Dividing the market into distinct groups of buyers that are more easily reached.
Define Targeting
Evaluating each market segment’s attractiveness and selecting one or more segments to enter.
What activities occur under the second half of the Marketing Strategy?
- Differentiation
- Positioning
Define Differentiation
Differentiate the market offering to create superior customer value
Define Positioning
Adjusting the marketing mix to meet the needs of the segment.
What are variables used in Segmentation?
- Geographic
- Demographic
- Psychographic
- Behavioral
Define Geographic segmentation
Dividing the market into different geographical units such as nations, cities, or neighborhoods.
Define Demographic segmentation
dividing the market into segments based on demographic variables (age & life-cycle, gender, income etc.)
Define Psychographic segmentation
Dividing the market into different segments based on lifestyle or personal characteristics (Ex. Panera)
What is the VALS model?
Stands for Values and Lifestyles. Identifies 8 segments based on a questionnaire. Relates segments based on high and low resources and primary motivation (Ideals, Achievement, Expression).
What are the 8 segments in the VALS model?
At the top are the Innovators and at the bottom are the Survivors.
Ideals: Thinkers, Believers
Achievement: Achievers, Strivers
Expression: Experiencers, Makers
What is the PRIZM model?
68 unique segments with descriptive names. Takes into account number of households and household income.
What are the Brand personalities (Aaker, 1998)?
- Sincerity
- Excitement
- Competence
- Sophistication
- Ruggedness
What are the types of Brand relationships (Fournier, 1998)?
- Arranged Marriages
- Best Friendships
- Kinships
- Flings
- Secret Affairs
Define Behavioral segmentation
Dividing the market into segments based on consumer knowledge, attitudes, uses of or responses to a product.
What are the ways Behavior can be segmented?
- Occasions behavior
- Benefits sought
- User status and usage rate
- Loyalty status
In what additional ways can Businesses be segmented?
- operating characteristics
- purchasing approaches
- situational factors
- personal characteristics
What are the requirements of an effective Segment?
- Measurable. The segments can be measured.
- Accessible. The segments can be reached and served.
- Substantial. Large and profitable enough to serve.
- Differentiable. Segments respond differently to different marketing strategies.
- Actionable. Segments are possible to target.
What three factors must first look at in evaluating different market segments?
- Segment size and growth
- Segment structural attractiveness
- Company objectives and resources
Define Undifferentiated Marketing
Also called “mass-marketing.” In this strategy, a firm ignores market segment differences and uses one offer for the whole market.
Focuses on the common needs of the consumer.
Define Differentiated Marketing
A firm targets several market segments and designs specific offers for each.
This strategy increases the costs of doing business.
Define Concentrated Marketing
Also called “niche marketing.” In this strategy, a firm goes after a large share of one or a few smaller segments.
Achieves a strong position for the firm but carries the risk of relying on small segments for all their business.
Define Micromarketing
Tailoring products and marketing programs to suit the specific tastes of individuals and local customer segments.
Includes local marketing and individual marketing.
Define Product Position
The way a product is defined by consumers. It’s the place the product occupies in consumers’ minds relative to competing products.
What are Positioning Maps?
Perceptual Positioning Maps show consumer perceptions of brands versus competitors on important buying dimensions (Ex. Price and Performance in SUVs)
What three steps are necessary in the Differentiation and Positioning task?
- Identify possible Value Differences and Competitive Advantages
- Choose the right Competitive Advantages
- Select an overall Positioning Strategy
What is the Value Proposition Table>
Plots “Benefits” (Less, the Same, More) against “Price” (Less, the Same, More). Evaluates winning and losing value propositions.
Define Value Proposition
The full positioning of a brand - the full mix of benefits on which it is positioned.
What must a firm do once a Position is built?
It must maintain the position through consistent performance and communication. The company must deliver the position.
