Chapter 9 segmentation and positioning Flashcards
Market segmentation involves identifying (2)
prospective buyers into groups that:
- have common needs, and
- will respond similarly to a given marketing action.
Segmentation mean
finding homogenous groupings
Market segmentation is systematically market needs to organization’s marketing program in THREE STEPs_____
- identify market needs
- process of segmenting and targeting markets
- execute marketing program
def. differentiation in marketing strategy
a firm using a different marketing mix activity, such as different product features, (in addition to Your Suggestions) to respond to the needs/wants of a segment
Using _____ for relating market segments of potential buyers to specific products and potential marketing actions
Market Product Grids
what is a market-product grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm.
when to segment market
- the costs and efforts of segmentation can lead to higher satisfaction and consequent higher profits
how to make one product reach different market segments
Different promotional, pricing and even distribution mix to better reach the segment
give an example for one product or multiple segments
magazines
what does mean “multiple products and multiple market segments”
Each Product line aimed at a Market Segment
example of “multiple products and multiple market segments”
gap’s, old navy
Tiffany/Walmart strategy:
variations of basic products at different prices for different Segments
what does mean “segments of one”
Mass Customization: Each customer receiving tender loving care
example of mass customization
Dell’s “self-designing” for customer’s own computer
Market segmentation involves aggregating prospective buyers into groups that have two key characteristics. What are they?
(1) have common needs and (2) will respond similarly to a marketing action.
benefits of one product targeting on multiple segments
One products for multiple market segment can avoid extra cost of developing a totally new product
When should a firm segment its markets?
When the firm’s expectation is that it can serve the market better.
When a firm expects segmentation to increase its sales, profit, and return on investment, it is normally worthwhile to segment markets.
when identifying a market need, what factors we can consider?
the benefits in terms of product features expense quality saving in time and convenience
the five key steps in segmenting and targeting markets
- group potential buyers into segments
- group products to be sold into categories
- develop a market-product grid and estimate size of markets
- select target markets
- take marketing actions to reach the target market
step 1: the criteria to decide whether to form segments
Does segmentation increase Value to customers or raise Profits
what we should consider in each of the segment (5)
Potential for delivering higher or more effective VALUE (or marketing program) or help to increased profit.
Similarity of needs of potential buyers within a segment
Difference of needs of buyers among (or across) segments
Potential of a marketing action to reach a segment more effectively
Feasibility: Simplicity and cost of assigning potential buyers to segments
def. usage rate
it is whether a person is a nonuser or a light, medium, or heavy user is important in many segmentation problems
what is 80/20 rule
a large fraction of a firm’s sales are obtained from a small fraction of its customers.
four main dimentions we usually talked in segmentation
- geographic
- demographic
- psychological
- behavioral
what are geographic segmentation
where people live, using geographic variables – cities, countries
what are demographic segmentation
Using Population characteristics (Age, income, education, occupation, etc.)
what are psychological segmentation
uses personality and life style
what are behavioural segmentation
uses consumers’ behaviours (and variables) towards the product in the market as a basis of segmentation such as the benefits sought for phone plan
Organizational market segmentation may use variables similar to those used in segmenting consumer markets.
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how to Developing a market-product grid
i) labelling the markets or segments (rows),
ii) labelling products or product groups (columns) in a grid and then
iii) estimating the size of market in each cell, or market-product combination as we did in the Bed Pillow case.
supermarket products are organized into similar groups by aisles. what is the theory behind that?
the products a firm sells must be formed into meaningful groups so customers can relate to them. (market product grid)
the two focuses of selecting a target market
a firm should focus its marketing efforts in light of both (1) The criteria used in the selection process and (2) The criteria to choose the targets
the 5 criteria to select a target market
Market size
Expected growth
Competitive position
Cost of reaching the segment
Compatibility with objectives and resources
Choose the Segment(s) as Target Market(s)
Developing a market-product grid means______and products (or columns) in a grid and then estimating______ or ________
Developing a market-product grid means labelling the markets (or rows) and products (or columns) in a grid and then estimating the size of market in each cell, or market-product combination
In a market-product grid, what factor is estimated or measured for each of the cells?
The size of the market in each cell, along with the market-product combination, must be estimated.
def. Product positioning
the place that an offering occupies in consumers’ minds (and hearts) on important attributes relative to other competitive offerings.
def. Product re-positioning
to changing the place an offering previously occupied in consumers’ minds on important attributes relative to other competitive offerings.
Two Approaches to Product Positioning
. Head-to-head positioning
differentiation
def. . Head-to-head positioning
Competing Directly with the competition
def. differentiation
a less competitive, niche-like, isolated position based on unique aspects of the offering
benefits to write a positioning statement
help the firm internally and other external allies as well
what is a perceptual map
the means of displaying or graphing in two dimensions the location of products or brands in the hearts and minds of consumers.
it helps to understand consumer’s perception better
four steps to draw a perceptional map
- Identify important attributes for the product class and the brand
- Discover how target customers position your brand(s)
- Identify where the product is positioned in the hearts and minds of customers
- If necessary, reposition the products in the hearts and minds of customers
def. Market potential or industry potential
the maximum total sales of product
by all firms
to a segment
during a specified period of time
def. Sales or company forecast
the total sales of product that a firm expects
to sell during a specified period of time
Three Sales Forecast Methods are usually used
- judgment of the Decision Maker
- surveys
- statistical methods
2 types pf judgments
- direct forcast
2. lost-horse method of forecasting
direct forcast
Estimating value without intervening variables by people who are involved with the forecast. but their knowledge level is a concern
lost-horse method of forecasting
Estimating by using the last known value
and modifying it according to positive or negative impact of influential or intervening factors
A lost-horse forecast follow the following 5 steps
1) starts with the last known value of the item being forecasted,
2) listing of the factors that could affect the forecast,
3) assessing whether they have a positive or negative impact,
4) estimating the magnitude of impact, and
5) making the final forecast considering all potential impacts
what is surveys of knowledgeable groups
Ask knowledgeable people who are likely to know something about the future sales
two ways to do surveys of knowledgeable groups
- survey of buyer’s intentions forecast
2. sales force survey forecast
Survey of buyers’ intentions forecast
a survey asks potential customers and industrial buyers. Consumer products (Prospective Consumers) Industrial Products ((Prospective Organizations)
Sales force survey forecast
a survey asks the firm’s sales people for a forecast
def sales force
knowledgeable, has access to buyers, knows of past purchases and can also survey their own clients directly
Trend extrapolation
involves extending a pattern observed from past data into the future.
what is the premis of statistics methods
The main assumption is that the underlying trends have not changed for sometimes and are less likely to change!
linear trend extrapolation
when the trend is relatively stable with minor deviations
