Segmentation, Targeting, and Positioning (Lecture #5) Flashcards
Describe the Ford vs. GM production models
- Ford: offered only black, a mass marketing and production strategy
- GM: offered different colours, styles, was customizable
- –a differentiated strategy
What are the three C’s in the three C’s model?
Customer, company, competitors
def. segmentation
identify variables that allow you to break up the market into different groups of people
def. targeting
evaluating the attractiveness of the segments, and choose a segment to market to
What is the STP framework?
Segementation, targeting, positioning
def. positioning
oreint your marketing actions to meet the needs of that target segment
def. market
people or orgs with needs or wants, and the ability and willingness to buy
def. market segment
subgroup of people or orgs that (1) have similar product needs (2) will respond similarly to a marketing action
def. market segmentation
the process of dividing a market into meaningful, relatively similar, identifiable segments or groups
Describe undifferentiated/mass marketing
- 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
describe differentiated/segmented marketing
- 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)
describe concentrated/ niche marketing
- 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
Why segment?
- understand who customers are and what they want/need
- clarify marketing objectives
- improve resource allocation
what is the ‘challenge’ of segmentation?
we need to find a segment small enough to serve, and large enough to be profitable
What are the two general priniciples when considering how to segment? (also describe what to do to achieve those)
- know your market segment
- –do research, they know what they want
- –deliver what they need, not necessarily what you want to make - 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
What are the 5 general steps to segment and target?
- Group buyers into segments
- Group products into categories
- make a market-product grid
- select your target markets
- take marketing actions to reach targets
describe grouping buyers into segments
- 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
What does making a market-product grid?
lets you estimate the size of your market
What is the criteria for deciding target markets?
- size
- growth
- cost of reaching them
- compatibility/ease of entry
- competitive position
describe the last step of the segmenting and targeting process (take marketing actions to reach targets) (in terms of 4 P’s)
- 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?
What is positioning?
- 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
Describe positioning statements: what do they do? what questions do you consider?
- 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)
What is the structure of a positioning statement?
“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]”
If your first positioning strategy is unsuccessful, what should you do?
re-position, ie target a new market
def. positioning/perceptual map
tool for creating a visual representation of how people perceive different products in terms of key attributes
What are the steps to create a positioning/perceptual map?
- Identify important attributes for a product class
- Discover how potential customers rate competing products on these attributes
- plot these data on an X-Y graph
