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Strategic Marketing > Class 4 | Chap 10 | Market Segmentation > Flashcards

Class 4 | Chap 10 | Market Segmentation Flashcards

1
Q

What is the least cost production paradigm?

A

Mass marketing that creates the largest potential market, which leads to the lowest cost, which in turn can lead to lower prices and or higher margins

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2
Q

Micromarketing =

A

Focus marketing on one of the four levels: segment, niches, local areas and individuals.

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3
Q

4 levels of micromarketing including description:

A

Market segment : A group of customers who share similar needs and wants.
Niche marketing: more narrowly defined customer group seeking a distinctive mix of benefits or values
Local marketing: focused on wants and needs of local groups
Individual marketing: one-to-one marketing

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4
Q

Flexible marketperceived value offering =

A

Flexible market offerings to all members of the segment, consists of two parts: naked solution (offering attributes and benefits that all segment members value) discretionary value options (some segments members require)

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5
Q

How can you characterise marketing segments?

A

To identify preferences:

  • Homogeneous preferences: all customers roughly the same preferences
  • Diffused preferences: vary greatly in their requirements
  • Clustered preferences: natural market segments emerge from groups of customers with shared preferences
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6
Q

Grassroots marketing =

A

A growing trend that concentrates marketing activities on getting as close and personally relevant to individual customers as possible

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7
Q

What are the risks of localised marketing?

A
  • Tendency to drive up manufacturing costs and so reduce economies scale
  • Tendency to create logistical problems
  • Possibility that the overall image of the brand may be put at risk
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8
Q

What is customerisation?

A

Combines operationally driven mass customisation with customised marketing in a way that empowers consumers to design the customer-perceived value offering their choice (design your own shoes).

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9
Q

At what descriptive characteristics are some researchers looking for segmentation?

A

Geographic: dividing the market in geographical units
demographic: dividing the market based on variables
and psychographic. Also look at behavioural considerations

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10
Q

what differences are important in global and local marketing

A

Regional, rural and urban characteristics are highly significant

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11
Q

Key Variables demographic segmentation (7)

A
  • Age and life cycle change
  • Life stage
  • Gender
  • Income
  • The new consumer
  • generation
  • Social class
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12
Q

Why is the demographic approach so popular?

A

Is that they are often associated with customer needs and wants

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13
Q

What are the key trends in social and cultural environment?

A
  • Grey market: constitutes an attractive target market for several perceived-value offerings
  • Youth market: generation Y. declining levels of purchasing power in EU and less growth
  • Ethnic market: ethnic migration and therefore pay attention to that different cultures have distinct value sets
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14
Q

Psychographic segmentation

A

using psychology and demographics to better understand consumer markets, based on 3 variables (AIO factors):

  • activities
  • interests
  • opinions
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15
Q

What is VALS

A

Segmentation system based on psychographic measurements -> values and lifestyles. With the main dimensions: customer motivation and customer resources.. Inspired by one of 3 primary motivations: ideals, achievements and self-expression.

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16
Q

What are the 8 groups in VALS?

A

Higher resources:

  • Innovators
  • Thinkers
  • Achievers
  • Experiencers

Lower resources:

  • Believers
  • Strivers
  • Makers
  • Survivors
17
Q

What is behavioural segmentation?

A

Place buyers into groups on the basis of their knowledge of, attitude towards use of response to a product/service or market offering package.

18
Q

What are behavioural variables?

A
  • Occasions
  • Benefits
  • User status
  • usage rate
  • buyers-readiness stage
  • loyalty status
  • attitude
19
Q

What type of loyalty status are there?

A
  • hardcore loyals: 1 brand all the time
  • split loyals: split between 2 or 3 brands
  • Shifting loyals: shift loyalty from one brand to another
  • switchers: show no loyalty to any brand
20
Q

What is the conversion model?

A

Measures the strength of customers psychological commitments to brands and their openness to change to determine how easily a customer can be converted to another choice.

21
Q

What 8 groups of users do the conversion model segment?

A

Users of the brand

  1. Convertible: most likely to defect
  2. Shallow: uncommitted, could switch
  3. Average: unlikely to switch brands on short term
  4. Entrenched: strongly committed to the brand they are using

non-users of the brand

  1. strongly unavailable: unlikely to switch
  2. Weakly unavailable: not available to the brand because their preferences lies with their current brand. Although not strongly
  3. Ambivalent: as attracted to the brand as they are to their current brands
  4. Available: most likely to be acquired in the short run
22
Q

VALS:

Which of these motivations look for physical activity, variety and risk

A

Self-Expression

23
Q

VALS:

are guided by knowledge and principles

A

Ideals

24
Q

VALS:

look for purchases that demonstrate success to their peers

A

Achievements

25
Q

5 roles in a buying decision:

A 
initiator
influencer
decider
buyer
user
26
Q

The main segmentation variables for Business-to-Business markets are

A 
Demographic
Operating variables
Purchasing approaches
Situational factors
Personal characteristics
27
Q

To be useful, marketing segments must be capable of assessment on 5 criteria

A

1 measureable: size, purchasing power and characteristics can be measured
2 substantial: large and profitable enough to serve
3 accessible: can be effectively reached and served
4 differentiable: conceptually distinguishable
5 Actionable: effective programmes can be formulated for servind segments

28
Q

What are the 5 patterns of target market selection?

A 
1 single-segment concentration
2 selective specialisation
3 product (market offer) specialisation
4 market specialisation
5 full market coverage
29
Q

What is undifferentiated marketing?

A

firm ignores segment differences and trades on the whole market with one offer

30
Q

What is differentiatied marketing?

A

the firm operates in several market segments and designs different product/service offers for each (Nestle: water, baby foods, chocolate, pet care etc).
Creates more sales, but also increases costs of doing business

31
Q

What is the crucial pillar of marketing strategy?

A

STP: segmentation, targeting, positioning

32
Q

What is SCA?

A

Sustained competitive advantages

33
Q

What is the result of good positioning?

A

customer-focused value proposition: a cognent reason why the target customer should buy from the provider

34
Q

What does deciding on positioning require?

A
  • Determining a frame of reference: identifying target market and competition
  • Identifying Points Of Parity (POP) and Points Of Difference (POD)
35
Q

Points of Parity =

A

are associations that are not necessarily unique to the brand and may be shared with other brands

36
Q

Points of Difference =

A

attributes or benefits that consumers associates strongly with a brand, evaluate positively and believe they could not find to the same extent with a competitive brand.

37
Q

3 ways of communicating brands category membership

A
  • Announcing category benefits
  • Comparing to exemplars
  • Relying on the product discriptor
38
Q

The author’s cite three ways in which a firm can develop and communicate a differentiation strategy:

A

Cost Leadership

Distinctive Superior Quality

Cost Leadership and Differentiation (combination of first two) - not cost leadership and focus (which was lifted from Porter’s strategic approaches)

39
Q

Other ways in which a firm can gain a competitive advantage by differentiating its offering include:

A
  • Personnel - by the people they employ
  • Channel - where their product is located
  • Image - how distinctive it is.

Strategic Marketing (6 decks)

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