Segmentation Flashcards
What is market segmentation?
Dividing a diverse market into smaller, more homogeneous groups based on shared characteristics.
Why is market segmentation important?
It allows businesses to tailor their products and marketing strategies to specific customer needs.
Example: Pandora identified a mid-market segment for quality but affordable jewelry.
Name two benefits of market segmentation.
Enhanced profitability and better targeting of communications.
How can segmentation improve customer retention?
By creating tailored products that better meet customer needs.
Example: Coca-Cola creates products like Diet Coke and Coke Zero to appeal to health-conscious consumers.
What are the five criteria for successful segmentation?
Effective, measurable, accessible, actionable, and profitable.
Why must segments be measurable?
To understand their characteristics and design effective marketing strategies.
Example: Facebook used a mix of demographic and behavioral data to segment US voters into 14 groups.
What are three main bases for segmenting consumer markets?
Behavioral, psychographic, and demographic segmentation.
Give an example of behavioral segmentation.
Segmenting based on benefits sought, such as toothpaste offering whitening or cavity protection.
Example: Colgate developed specific products like Colgate Max Fresh (fresh breath) and Colgate Sparkling White (whitening).
What is psychographic segmentation?
Dividing the market based on personality, lifestyle, or values.
Why is psychographic segmentation valuable?
It aligns marketing strategies with consumer lifestyles or personalities.
Example: TAG Heuer markets luxury watches to status-conscious, trendsetting consumers.
What is geographic segmentation?
Dividing the market by regions, climates, or urban vs. rural areas.
Give an example of geographic segmentation in practice.
T-Mobile targeted small-to-medium businesses in the US using direct mail campaigns.
What are the four generic targeting strategies?
Undifferentiated, differentiated, focused, and customized marketing.
What is undifferentiated marketing?
A strategy that uses one product for the entire market.
Example: Coca-Cola’s original marketing strategy targeted a broad market with one product.
What is differentiated marketing?
Creating distinct products or marketing mixes for different segments.
Name a company that uses differentiated marketing.
Kellogg’s markets Special K to women and Bran Flakes to men.
What is focused marketing?
Targeting one specific segment with a tailored strategy.
Why might a company use focused marketing?
To dominate a niche market and reduce competition.
Example: Bose focuses on premium audio products for affluent customers.
What is positioning?
Designing a product to occupy a distinct place in the customer’s mind.
Why is positioning critical?
It ensures the product is associated with key benefits valued by the target market.
Example: Volvo is positioned as the safest car brand despite not always having superior safety ratings.
What are the four criteria for successful positioning?
Clarity, consistency, credibility, and competitiveness.
Why is consistency important in positioning?
It builds long-term brand recognition and trust.
Example: Apple’s consistent ‘Think Different’ campaign reinforces its innovative image.
What is a perceptual map?
A visual representation of consumer perceptions of brands across key attributes.
How are perceptual maps used?
To identify gaps in the market or reposition products.
Example: A perceptual map for breakfast cereals might show gaps for organic, high-protein options.
What is repositioning?
Changing a product’s target market or perceived benefits.
Name the four types of repositioning.
Image, product, intangible, and tangible repositioning.
Example: Lucozade repositioned from a drink for sick children to an energy drink for young adults.
