Session 2 Flashcards
What is segmentation?
Segmentation in marketing is the process of dividing a broad target market into smaller, more defined groups based on shared characteristics, such as demographics, behavior, or needs.
Why is segmentation important?
not all customers are the same. Segmentation is essential because the market is not homogeneous, so the companies have incentives to try to divide it in segments that are relatively homogenous.
On which segment should a company focus on?
Competing companies may be better suited for certain segments, difficult or too costly to satisfy all customers, and the company has limited resources. Thus every company should focus on customers with the highest return on marketing investment.
What are the three criteria for segmentation?
Segments should be distinctive (respond differently to the marketing mix), operational (can be identified and reached) and substantial (enough to support profitable programs)
What bases could companies choose to segment a market? What are the three levels of classification?
- Personal characteristics
- Benefits sought (aspects of a product that customers are looking for, e.g. quality and price levels)
- behaviorual measures (purchasing pattern, brand loyalty or actual profitability)
What is targeting?
Targeting is about adressing the right people for your product
What should a company focus on (3Cs)
customer focused (what benefits are important for what segments), company focused (how good is the company at providing those benefits) and competitive focused (how good is the competition at providing those benefits).
What type of startegy should a company use to tap into an undifferentiated market?
mass marketing strategy like Coca-Cola does to go after entire market
What types of strategies should a company use to tap into a concentrated segment?
- Single target market approach:
- narrower version called “niche strategy”
What type of strategy should a company use to tap into a differnetiated segment?
multiple target market approach (most used strategy) –> choose ttwo or more segments and offer different marketing mixes for each segment (Toyota, department stores etc.)
What is the mere exposure effect?
people like things they get exposed to very often. It is important to have a clear positioning and get consumers exposed to it very often
What is positioning?
It is about occupying a position in consumers’ minds. It requires designing a company and prodzct image and developing a marketing mix to promote the image to the target segments.
What does a good positioning statement have?
A good Positioning Statement contains all the relevant info about a brand: target; frame of reference; point of difference (USP); and reason to believe (e.g., #2 in market)
example: for (target), (brand) is the (frame of reference) which provides (point of difference) because (reason to believe)
What are the two main tools for positioning?
perceptual maps (quantitative technique) and ZMET (qualitative technique)
What is a perceptual map?
Used to choose and track positioning:
Perceptual maps technique involves selecting two important attributes and plotting the competitors in a graph with those attributes. For perceptual maps, marketers should use factor analysis to reduce the number of attributes to plot and regression analysis to examine what factors are most important.
