Segmentation, Targeting, and Positioning (Lecture #5)

Question 1

Describe the Ford vs. GM production models

Answer 1

• Ford: offered only black, a mass marketing and production strategy
• GM: offered different colours, styles, was customizable
• –a differentiated strategy

Question 2

What are the three C’s in the three C’s model?

Answer 2

Customer, company, competitors

Question 3

def. segmentation

Answer 3

identify variables that allow you to break up the market into different groups of people

Question 4

def. targeting

Answer 4

evaluating the attractiveness of the segments, and choose a segment to market to

Question 5

What is the STP framework?

Answer 5

Segementation, targeting, positioning

Question 6

def. positioning

Answer 6

oreint your marketing actions to meet the needs of that target segment

Question 7

def. market

Answer 7

people or orgs with needs or wants, and the ability and willingness to buy

Question 8

def. market segment

Answer 8

subgroup of people or orgs that (1) have similar product needs (2) will respond similarly to a marketing action

Question 9

def. market segmentation

Answer 9

the process of dividing a market into meaningful, relatively similar, identifiable segments or groups

Question 10

Describe undifferentiated/mass marketing

Answer 10

• marketing to the entire market the same way
• goal: reach the widest audience possible
• advantages: saves resources (only managing 1 product)
• disadvantages: not all products truly have mass appeal

Question 11

describe differentiated/segmented marketing

Answer 11

• separate offerings for separate target markets
• goal: increase sales in each target market
• advantages: create strong market presence
• disadvantages: can be expensive and challenging to succeed in multiple target markets (resources are spread)

Question 12

describe concentrated/ niche marketing

Answer 12

• focus on only a small target market
• goal: establish a competitive advantage amongst this “minimum viable audience”
• advantages: saves resources–especially a good strategy for smaller companies
• disadvantages: vulnerable to changes in demand amongst the niche market

Question 13

Why segment?

Answer 13

• understand who customers are and what they want/need
• clarify marketing objectives
• improve resource allocation

Question 14

what is the ‘challenge’ of segmentation?

Answer 14

we need to find a segment small enough to serve, and large enough to be profitable

Question 15

What are the two general priniciples when considering how to segment? (also describe what to do to achieve those)

Answer 15

1. know your market segment
   - –do research, they know what they want
   - –deliver what they need, not necessarily what you want to make
2. aim to be the best for the particular market segment you serve
   - -be the best at something, good enough at the rest
   - -deliver value to your customers better than your competitiors

Question 16

What are the 5 general steps to segment and target?

Answer 16

1. Group buyers into segments
2. Group products into categories
3. make a market-product grid
4. select your target markets
5. take marketing actions to reach targets

Question 17

describe grouping buyers into segments

Answer 17

• understand the benefits that the customers seek
• partition market, and develop prototypical customer profiles based on those benefits
• find observable variables (e.g. demographics, geography, psychographic, behavioural measures) that discriminate among the benefit segments

Question 18

What does making a market-product grid?

Answer 18

lets you estimate the size of your market

Question 19

What is the criteria for deciding target markets?

Answer 19

• size
• growth
• cost of reaching them
• compatibility/ease of entry
• competitive position

Question 20

describe the last step of the segmenting and targeting process (take marketing actions to reach targets) (in terms of 4 P’s)

Answer 20

• orient marketing actions towards reaching target markets
• Product: are you selling what they want/need?
• Price: is the price right for your target?
• promotion: do your advertisements ‘click’ with them?
• Place: is your product sold where they shop?

Question 21

What is positioning?

Answer 21

• orienting your marketing actions to meet the needs of the target segment
• all the marketer’s efforts to have a product occupy a unique and favourable “territory of the mind” in the target customer

Question 22

Describe positioning statements: what do they do? what questions do you consider?

Answer 22

• outlines the essence of their strategy
• who is our customer, what are their needs? (target segment)
• what other options are out there? Who are we comparing ourselves to? (frame of reference)
• what is unique about our offer? (point of difference)

Question 23

What is the structure of a positioning statement?

Answer 23

“Our [product/brand] is for [target segment defined or key benefits sought]. Unlike other products within [frame of reference], our brand offers [point of difference]”

Question 24

If your first positioning strategy is unsuccessful, what should you do?

Answer 24

re-position, ie target a new market

Question 25

def. positioning/perceptual map

Answer 25

tool for creating a visual representation of how people perceive different products in terms of key attributes

Question 26

What are the steps to create a positioning/perceptual map?

Answer 26

1. Identify important attributes for a product class
2. Discover how potential customers rate competing products on these attributes
3. plot these data on an X-Y graph