MARK 3000 Chapter 9 Flashcards
what is segmentation?
identifying and serving homogenous groups of people
what are segments?
naturally existing groups of consumers with similar needs/wants and responses
what is the target market?
the segment the firm chooses to serve
what are the 5 Steps of STP?
- establish the strategy or objectives
- use segmentation method to understand the customer profiles
- evaluate the attractiveness of each segment
- select the target market
- develop a positioning strategy
what is geographic segmentation?
based on where people live (can be super broad like continents or more focused)
what is demographic segmentation?
based on easily measured characteristics like age, gender, income
what is psychographic segmentation?
based on how customers spend their time and money and how they feel about the world
what is derived from the mission statement and current state?
step 1: strategy and objectives
what are the segmentation methods?
geographic, demographic, psychographic, benefits and behavioral
what is the most common segmentation strategy?
demographic
what is benefit segmentation?
grouping based on the benefits they get from buying a product
what is behavioral segmentation?
grouping based on how customers use the product (occasion or loyalty)
what is occasional segmentation?
when/how often is a product purchased
what is loyalty segmentation?
strategy of investing in loyalty to retain the firm’s repeating customers
do firms just one method of segmentation?
NO! each method has pros and cons so using a mixture allows you to get the best segments
what is geo graphic segmentation?
method of segmentation based on geographic, demographic and lifestyle characteristics
what is tapestry segmentation?
common type of geo graphic segmentation that classify all US neighborhoods in 65 distinctive segments based on zip code
how do you evaluate segment attractiveness?
-identify
-substantial
-reachable
-responsive
-profitable
what questions do you ask to determine if the segment is identifiable?
who is the market?
are the segments unique?
does each segment require a unique marketing mix?
when is the segment reachable?
can you reach consumers so they:
know the product exists
understand what it can do
recognize how you buy it
when is the segment substantial?
too small and its buying power is insignificant, and therefore unlikely to be profitable
when are segments responsive?
when customers must:
moves towards the firms products/services
be willing to value the firms value proposition
what makes the segment profitable?
segment size, segment adoption, fixed costs
what are the methods to select a target market?
-undifferentiated/mass marketing
-differentiated
-concentrated
-one-on-one/micromarketing
what is undifferentiated/mass marketing?
the same strategy is used for everyone (salt and sugar)
what is differentiated method?
a firm will target SEVERAL markets with a DIFFERENT offering for EACH ONE
what is concentrated method?
a SINGLE target is picked
niche marketing
what is one-one-one marketing/micromarketing?
a product is tailored to suit INDIVIDUAL needs (anything customizable)
which method increases loyalty?
one-to-one/micromarketing
what is cannibalization?
when new products cut into sales of an old product (iPhone taking over the iPod market)
what is value proposition?
communicates the benefit customers receive from a product and why they’d want to buy it
what is the IDEAL positioning strategy?
your product overlaps with customers needs but does NOT overlap with what competitor is offering
what are the positioning methods?
-by showing why its worth buying
-show the important attributes this product has that appeals to the market
-brand recognition
-show how your product is better than anything else on the market
what is perceptual mapping ?
displays the relative positions of products on an axis that has two or more dimensions
what is the ideal point?
the point at which you want the product to lie on a perceptual map
