Segmentation Flashcards
_____. Deciding how to slice the pie, jack of all trades, master of none isnt successful. Orbits realized that mac users want higher quality and will pay more, so they started to ___.
Segmentation/ segment
_____ Marketing. Also known as undifferentiated or mass marketing. A single product is developed for all groups, rarely used (only in less competitive markets and ones where satisfaction doesn’t matter, trash cans) Economical, but inneffective/innefficent and low customer satisfaction
Aggregation
______ _____. Portion of the larger market that differs, consumers who share common needs/characteristics/behaviors. Helps to make an effective marketing strategy to target them. Tailor specific messages/goods to a segment to maximize effenciey and profits
Market Segmentation
Segmentation –> targeting —> positioning
Seg: group customers, profile each segment
targ: assess attractiveness of each segment, select segments to target
Pos: define value proposition for target segments, develop action plan
STP, Segmentation –> targeting —> positioning
____ &_____. Two main assumptions that underline segmentation: 1. consumer preferences vary, presence heterogeneity and 2. tailoring a product or service, firms can make the offer so appealing that segments pay a price that is high enough to offset the costs of targeting them
Divide & Conquer
Benefits to _____. w/o it, COs overlook opportunities when they try to create one solution for everyone. It also informs the co about potential new opportunities, **firms don’t create ___ they only uncover them* different COs may segment the same market differently, depending on hw they look at consumers and their needs
Benefits to Segmentation
___ ___ involves four steps. 1. Identifying product-related needs sets
- group customers with similar need sets
- describe each group
- chose an attractive segment/group to target
Four steps to Segmentation
Segmentation steps. 1/4. __ __: most products satisfy more than one need. Not restricted to product features, can include types and sources of info about the product, services associated w/ product, images of the product, how the product is produced. Involves consumer research (focus groups and in- depth interviews) both top-down and bottom-up strategies are used (image vs reliability)
Segmentation steps. Identifying product-related need set
Segmentation steps. 1/4. ___ ___ with similar need sets. Consumers can be grouped into different segments, like product features vs product image. This step involve consumer research (Focus group, surveys, current consumption patterns) *Concept testing: how people, without prompting, interpret a sketchy idea for a new product or service, identifies once
Segmentation steps. Group customers with similar need sets
Segmentation steps. 1/4. ___ of each ____. Describe these consumers int terms of demographics, lifestyle, and media usage. Need to understand the context that the product is bought and consumed, how consumers think about it, and language used.
Segmentation steps. Description of each group
Porsche. Key demographics (income and edu) but lifestyle and motivations and lifestyle were different. Top guns, elitists, proud patrons, bon vivant, fantaissts
Description of each segmentation group
Segmentation steps. 1/4. ___ ___ to serve. 3 qualities in a useful segment. Identifiable, substantial, accessible, stable, differentiable, actionable
Segmentation steps. Attractive Segment to serve
_____: bigger isn’t always better. Segments that are sizable and growing appear attractive but are not always in line with profitability. Due to majority fallacy (sub groups above or below avg may have less competition)
sales/cost trade off (costs increase as segments get smaller, sales must offset these costs) - Specialization/segment size
Profitability
____: don’t steal from yourself. Cannibalization: similar products within the same company compete with one another - Gap, Old Navy, Banana Republic. This cuts more of the market share, but instead these companies target different groups.
Profitability.
Bases of segmentation, 1/5. ____, describe population in terms of its size, distribution and structure, influence consumption directly and indirectly by affecting attributes like value, decisions styles. Based on vital population statistics: age, gender, ethnicity, income, education, occupation, marital status, family life cycle
Bases of segmentation: Demographics
Bases of segmentation: Key _____. Population size and distribution (our population is growing), use census data, Occupation (widely used to evaluate and define others, associated with edu and income, influences values) Age (critical for many productions, beahavior and attitude norms for lifestyles etc)
Demographics
Bases of segmentation, 1/5. ____, Based on the physical location of consumers, assumes proximal consumers will exhibit similar preferences for products/services. Link to census data. Can use zip code districts, towns, cities, states, countries, continents Based on total population, pop density, regional differences, and climate
Bases of segmentation: Geographic
Bases of segmentation, 1/5. ___ ____, combination of geography and demographics, known as zip code demographics. The logic that people with similar cultural backgrounds/money/perspectives gravitate toward one another. They chose to live amongst their peers in neighborhoods with similar lifestyles, and have shared patterns of consumer behavior. PRIZM is an example, “You are where you live”
Bases of segmentation: Geo-Demographic
____ groupings. An example of Geo-Demographic. Organizes 66 individual segments into social and lifestage groups, four social groupings are based on “urbaniticity”, lifestage groups are based on age ad the presence of children (younger years, family life, mature years), then further organizes each social and lifestage by level of affluence. (used to find the highly desirable but untapped segment.. remain true to their brand/core customers and target a new segment)
PRIZM
Bases of segmentation, 1/5. ___. VALS - provides a systematic classification of US adults based on enduring psychological characteristics. innovators vs survivors ($) then ideals (thinkers vs believers), achievement (achievers vs strivers), and self-expression (experiencers vs makers). Motive is broken down by how much $ you make.
Bases of segmentation: Psychographic
Bases of segmentation, 1/5. ___. Group customers based on their prerences. Product attribute or benefit, usage rate, usage occasion, user status, loyalty, usage occasion and product usage, user status, rate of product, loyalty status. Core benefit: emphasizing a single attribute like price (where on the graph do they fall), product use (consumption patterns/frequency of use), or user
Bases of segmentation: Behavioral
Which ____ ____ to use? Why do customers make the decisions that they do? (Needs/preferences/decision process) What have the customers done? (Usage, loyalty, and profitablity) Who are the customers? (demographics, media habits, lifestyle
Which segmentation variable to use?
____ ____. Specialized form of segmentation where the focus is ONLY one narrowly defined, small, underserved segment with one product and marketing mix. Pros: “in niches there are riches”, a concentrated strategy = high satisfaction and high loyalty. Can have less research/marketing costs, more attractive to small firms, opportunity to brand as ‘specialist’ Cons: all eggs in one basket, risky, growth is limited, can acquire focused image that may limit the ability to break into other markets
Niche Segmentation
____ _____ or ____ ___. Each customer has a tailor-made marketing program. Fitness trainers, financial advisors. Mass customization: mass production of goods with differing individual specifications, different configurations. co-creation (customers involved in the creation of the product
Ultimate Segmentation/ Individualized Marketing
____ ____. Mass customization targets a large segment but markets 1-1 with the customer. Tech products and services where the cost of a personalized version is zero (ad), industries where flexible manufacturing technoligies exist to make customized products in a cost-effecticien matter, products where cust are willing to pay a premium for items and services tailored to their needs
Personalized segmentation
segmentation example: ____. Engagement rings created an image that people couldn’t resist. DB controls how many are in the market and stuff. Intrinsic value….dioment coartel.. extensive surveys…a diamond is forever… great marketing
De Beers
