L4: STP Flashcards
What is segmentation?
Segmentation is the process of dividing a market of potential customers into groups or segments, based on different characteristics.
- Choose variables for segmenting market
- Build a profile of segments
- Validate emerging segments
What are the different market-targeting strategies?
From broad targeting to narrow targeting;
- Undifferentiated marketing (mass)
- Differentiated marketing (segment)
- Concentrated marketing (niche)
- Micro marketing (local/individual)
What is undifferentiated marketing?
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. There is no account for customer; - needs/wants - income - preference
This is also called mass marketing, as it works for mass production to reduce costs and create a higher profit margin
What is differentiated marketing?
A market coverage strategy in which a firm targets several market segments and designs separate offers for each.
This is also called segmented marketing
What is meant with concentrated marketing?
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
Also called niche marketing
What is meant with micromarketing as a targeting strategie?
Tailoring products and marketing programs to the needs and wants of specific individuals, and local customer segments
(includes local and individual marketing)
What is differentiation?
Things that make you as a customer go for one product over the other product
What are the different types of segmentation?
Geographic - characteristics of where customers are located (climate, country, religion)
Demographic - Personal and family characteristics (age, gender, education, income, family structure)
Psychographic - Attitudes, opinions and beliefs held by consumers (Personal values, personality, interests)
Behavioural - Shopping, buying and product using behaviour (Recency, volume, buying channel)
Needs based - Product service or information needs (Feature usage, feature benefits, needs trigger, price sensitivity)
Business relationship - Stage of purchase or usage (customer journey stage, situation, tenure)
What are the different criteria for segmentation success?
- Homogenous - are customers in a segment similar in a way?
- Identifiable - can we assign a given customer to a segment
- Measurable - can we describe each segment by measurable characteristics?
- Sufficiently large - Enough customers in each segment
- Approachable - can the segments be approached by the marketing mix
- Stable over time - is segmentation somewhat stable
What is targeting?
Evaluating each segment’s attractiveness and selecting one or more to enter.
- Decide on targeting strategy
- Identify which and how many segments should be targeted
What are important factors when chosing segments?
- Segment size
- Segment potential
- Company resources
What is positioning?
Designing the company’s offer and image so taht it occupies a distinct and valued place in the target customers’ mind, relative to competing brands
- Understand consumer perceptions
- Position products in the mind of the consumer
- Design appropriate marketing mix to communicate positioning
What are the pros and cons of positioning maps?
Pros
- it is the customers’view
- Hightlight unserved positions
- Competition analysis
Cons
- 2 dimensions only
- Overgeneralized
- Same applies for competitors
What are points of parity (POP?
Overlapping segments of a brand; associations shared with other brands
- Category
- Competitive
What are points of difference (POD)?
The differences between brand perception; the strong favourable and unique associations for a brand
- Unique selling points
- Competitive advantage
