Segmentation, Targeting and Positioning Flashcards
What is the goal of segmentation?
Simplify and better understand a specific segment
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Main Segmentation Criteria
Demographics: Age, Gender, Income, Family size, education
Behavioral: Past purchases, browsing behavior, occasion
Psychographics: Lifestyle, personal values
What is the better predictor of consumer behavior?
Behavioral is better at predicting customer behavior, but it’s difficult to have before acquiring the customer.
It is easier to predict what the customer is gonna do in the future if you know what they did in the past.
What are the desirable properties of Segments?
LIDS
Large: each segment is large enough to be useful
Identifiable: Can easily assign customers to their segments
Distincive: Segments don’t overlap
Stable: Minimize changes over time
Desirable Properties of Targeting
PFD
Potential: Sizable and growing
Fit: Must fit with core competencies
Defensibility: Advantage over competitors
What Positioning defines?
The Value proposition for the selected target. Defines how we want to be perceived by the customers
What is the Desired Brand Meaning?
What managers ideal want consumers to think about the brand. Positioning is the desired brand meaning.
What a Positioning Statement should include?
Target: for whom?
Competitive Set: relative to whom?
Unique Value Proposition: what value?
Reason to Belive: why? how?
For [target], [brand] is the [competitive set] that [unique value proposition], because [reason to believe].
What should be considered when building the unique value proposition?
Points of Parity
Points of Diference
What are the Points of Parity?
Essential or baseline features and attributes that a brand or product must have in order to be considered a legitimate competitor within a particular market.
Category PoPs: basic things we need to offer if we want to be inserted in a certain category.
E.g. if you’re considering smartphones, having basic features like the ability to make calls, send texts, and access the internet.
Competitive PoPs: associations designed to negate a competitors Pointof Difference.
E.g. if a leading brand in the smartphone market introduces a new security feature, other brands may need to adopt similar security measures to maintain competitiveness.
Points of Parity allow Vertical differentiation, distinction between products based on their perceived quality. Products are arranged in a vertical hierarchy, with some being considered superior or more desirable than others.
What are Points of Difference?
Unique attributes that set a product apart from its competitors in the eyes of consumers. These distinctive features are the reasons why consumers may choose one offering over another.
Funtional PoD: related to the performance, specifications, or functionalities of a product.
E.g. A smartphone with a longer battery life, faster processing speed, or a superior camera.
Abstract PoD: related to the brand’s image, personality, or the emotional connection it establishes with consumers.
E.g. Apple’s reputation for innovation and design aesthetics, which goes beyond specific product features.
Points of Difference allow Horizontal Differentiation, distinctions among products where consumers perceive them as having equal value, but the products possess different characteristics.
Three characteristics that the unique value proposition must have
Relevance:refers to consumers - it has to be somethin that consumers care about and that fulfils the need they have
Differenciation: refers to competitors - needs to be relevan and cover a costumer’s need in a way that is different comparing to competitors.
Credibility: refers to the company itself - it has to be aligned with the company know-how, resources, long-term plan and values.
What are the different steps of the claims laddering
The goal is to move from specific product attributes to broader, more emotionally resonant benefits.
From specific to abstract:
Features/attributes (more functional): tangible and functional aspects that describe the basic features of the product.
E.g. If the product is a smartphone, a high-resolution camera, fast processor, and long battery life.
Benefits: explain how the features fulfill specific needs or solve problems for the target audience.
E.g. High-resolution camera provides clearer and more detailed photos.
Values (More abstract): abstract interpretation of the benefits. Connect the emotional benefits to the overall brand personality and values.
E.g. Capture life’s extraordinary moments.
How can we predict future customer’s behaviors?
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Relate demographic and psychographic data to behavior from old customers:
Behavioral = f(Demo/Psychographic) -
Predict new consumers’ behavior using estimated model:
Behavioral = f^(Demo/Psychographic)
What are Correlated Spatial Preferences?
People usually move to different places due to certain reasons, which are not random.
As such, certain markets will have a lot of potential in certain areas, whereas in other areas they might not have so much success, depending on the characteristics and preferences of people living there.
