Segmentation Flashcards
According to lecture, what is market segmentation?
aggregation of prospective buyers into groups that have common needs and respond similarly to marketing programs
(homogenous, similar consumption behaviour, leads to differentiation)
3 reasons for market segmentation
- single product can’t satisfy everyone
- efficient to make targeted products
- clear consumer insights
What are the two main market segments?
Consumer Market - goods, services, and ideas for personal use
Business Market - products to run a business or be used as a component in another good or service
According to the lecture, what is the key to successful product differentiation and market segmentation?
satisfying needs and profits
What are the 4 segmentation variables ?
geographic, demographic, psychographic, behavioural
psychographic segmentation
customer attitudes, interests, opinions, and beliefs
What does the segmentation variable ‘behavioral’ refer to?
occasion based purchases
benefits sought, usage rate, loyalty rate
What are some traits that are looked at with geographic segmentation?
global regions, countries, region of country, provinces, cities, neighbourhoods
just where people live.
What are some traits looked at with demographic segmentation?
age/life cycle
gender
income
etho cultural group
Traits looked at in psychographics based segmentation
social class, lifestyle, personality, characteristics
What’s a common example of a psychographic segmentation seen in marketing?
persona - character descriptions of a brand’s typical customer - brings data to life
What are the 6 steps in market segmentation?
- identify consumer needs and common characteristics
- cluster common consumer / customer variables to create meaningful market segments
- estimate the size and feasibility of each segment
- identify segments to be targeted
- take actions with marketing programs to reach the segments
- monitor and evaluate the success of these programs compared with objectives
What is a target market?
A specific group of existing and potential consumers to which marketers direct their marketing efforts
What are the 4 forms of targeting?
mass marketing
segment marketing
niche marketing
individual marketing
What is undifferentiated (mass) marketing?
one single offer for the whole market, cost advantages at the expense of focused targeting
What is differentiated (segment) marketing?
Design separate marketing mixes for several different segments,
creates more sales than targeting everyone with a single product,
higher costs as a result of serving separate segments
What is concentrated (niche) marketing?
Targeting one or more small segments (niches),
effective: fine tunes the marketing mix according to specific consumer needs,
efficient: targets only those that can be served profitably
What is individual (micro) marketing?
Tailors offerings to suit consumer needs
eg) ethnic grocery stores, mass customization like sneakers
The 4 structural factors that affect target marketing are…
company resources,
substitute products,
power of buyers and suppliers,
power of competitors
What is product positioning?
the impression of the branded product you want to establish in the consumer’s minds relative to their needs and also in contrast to the competition
Position statements are short paragraphs that indicate these 4 things…
target market and need
branded product name
category in which it competes
point of differentiation: brand’s unique attributes and benefits
behaviouristics
how and why consumers buy and use product
how, where, desired benefits, whether loyal, etc.
business market
products that are purchased either to run or to be used as a component in another product or service
consumer market
goods, services, and ideas that a person can purchase, use or, support for personal use
geographics
where a target market lives
individualized marketing
one to one marketing that involves customizing offers and in some cases, products to fit individual needs
mass marketing
marketing a product with broad appeal to the entire market without any product or market differentiation
positioning maps
visual representations of how products in a category or positioned in consumer’s minds
position statement formula
for (Target market) who desire (target market need), (brand) is the (product category) that offers (product benefits).
