Exam 2 Flashcards
What is a market?
A group of people who have the same general need or want and have the ability and willingness to buy
What is a segment?
A group of consumers that respond similarly to a markets efforts
Why do companies bother with Segmentation?
- Markets have a variety of needs and preferences
- Markets can better define customer needs
What is a segmentation variable?
Characteristics of individuals, groups, and organizations used to divide the total markets into segments
(Segmenting the buyers, not the products)
Common segmentation variables:
Geography- Segmentation by location, where groups live
Demographics- Personality,lifestyle,hobbies,age,interest,and opinions
Psychographics- Self-concepts, or self values, how they see themselves
Benefits Sought- Segmenting by what result the consumers want(for example, a funny movie vs a scary movie)
Usage Rate- distance traveled, frequency
Occasion/situational use- for particular situations, different styles, portions, and amounts are used.
Family life cycle
young single
young married without kids - most influential one
young married with kids
middle aged married with kids
middle aged married without dependent kids
older married
older unmarried
What is geodemographic segmentation?
Combination of grouping consumers by 3 main variables(geography, demographics, and lifestyle)
Segmentation, Targeting, and Positioning process
- Establish strategy or objective
- use segmentation methods
- evaluate segmentation attractiveness
- Pick your target market
- Identify and develop positioning strategy
How can you tell if you done a good job segmenting?
Substantially Identifiable & measurable Profitable Responsiveness Accessible & reachable Compatible with mission/objective
What is the best variable to use for segmentation?
Depends on the market
Why do we bother with segmentation?
Do a better job of satisfying specific consumer needs or wants
After you segment, you….?
Pick your target market
Define market
segmentation
pick your target market
develop 4p’s
define market
segmentation
pick your target market
develop 4p’s
What is a target market?
a group of people or organizations for which a organization designs, implements, and maintains a marketing mix to meet needs of consumers
What are the different targeting strategies?
Undifferentiated Strategy- views the market as one whole market, with no individual segments, save money and satisfies a basic need, but can be easily beat out by competitors.
Concentrated Strategy- strategy that focuses its 4p’s on one segment in the market. Example: Pet Airlines
Differentiated Strategy- Develops two or more segments in the market and creates marketing mix for each one.
Micromarketing- Tail a marketing mix to meet a need or want of an individual customer. Small companies do it well
What is cannibalization?
The sales of one product will eat away of the sales of another
