session 5: segmentation, targeting, and positioning Flashcards
what is segmentation
dividing the total market into segments
based on needs, traits, or behaviours
might require separate marketing strategies or mixes
what is targeting
the process of evaluating each market segment’s attractiveness
selecting either a segment, or various segments to enter
what is differentiation
being different than what the rest of the market offers to generate greater customer value
what is product positioning
position your product in the mind of customers in a positive way
they Gotta think of you constantly
how do you create value for targeted customers
with the following:
segmentation
positioning
targeting
differentiation
is there a single way to do segmentation?
nah boy
what are the key bases for segmentation?
Geographic
Demographic
Psychographic
Behavioural
what is geographic segmentation (what does it involve)
Global regions
Countries
Region of country
Provinces
Cities
Neighbourhoods
what is the most popular base for segmenting customer groups?
why?
demographic segmentation
Easier to measure than most other types of variables
how so you do demographic segmentation
what are the aspects studied
Age and Life-Cycle
Gender
Household Income
Ethnic or Cultural Group
what is psychographics segmentation
Social class
Lifestyle
Personality characteristics
what is behavioral segmentation?
Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product
what are the types of segments in behavioral segmentation?
Occasion-based purchases like Halloween or Christmas
Benefits sought:
Different segments desire different benefits from products
e.g. dirt bike vs city bike
User status:
Non-users, ex-users, potential users, first-time users, regular users
Usage rate:
Light, medium, heavy
Loyalty status: Divide into groups by degree of loyalty. e.g. Apple fan boys
what is multiple segmentation
Start with a single base and then expand to other bases
why should you use combined segmentation bases?
to identify better-defined target groups
do consumer and business markets use many if the same variables for segmentation, or are they completely different?
Consumer and business markets use many of the same variables for segmentation
what are the additional bases of segmentation that businesses use?
Operating characteristics
Purchasing approaches
Situational factors
Personal characteristics
how do you segment international markets?
Geographic location
Economic factors
Political and legal factors
Cultural factors
Intermarket Segmentation (cross- market segmentation)
Intermarket Segmentation (cross-market segmentation)
Segmenting consumers who have similar needs and buying behaviour even though they are located in different countries
what are the requirements for effective segmentation?
Measurable
Accessible
Substantial
Differentiable
Actionable
what does it mean for a market segment to be measurable?
the size
purchasing power
profile of the segment
can all be measured
what does it mean for a market segment to be accessible?
the segment can be effectively reached and served
what does it mean for a market segment to be substantial?
the segment is large and profitable enough to serve
what does it mean for a market segment to be differentiable?
the segments are distinguishable
they respond differently to different marketing programs
what does it mean for a market segment to be actionable?
effective marketing programs can be designed for attracting and serving the segment
In evaluating different market segments, marketers must look at which three factors?
Segment size and growth
Segment must match company objectives and resources
Segment structural attractiveness
how do you evaluate a segment’s size and growth?
collect and analyze data on segment sales, growth rates, and expected profitability
which target market segment should you choose when you think about size and growth?
Choose target market segment by figuring out which ones have the “right” size and growth characteristics
which target market segment should you choose when you think about size and growth?
Choose target market segment by figuring out which ones have the “right” size and growth characteristics
Small company can’t handle large growth/competitive segment
what does it mean for a segment to match company objectives and resources
your company should not change its target market if the other markets do not match the same objectives
if economy is not doing well and cheaper cars are more popular, BMW will still not make a low-end car
what are the 5 forces that affect long-run segment attractiveness?
- Competitors
- New Entrants
- Substitute products
- Power of buyers
- Power of suppliers
what are the characteristics of undifferentiated marketing (mass marketing)
Firm ignores market segment differences/opportunities and targets the whole market with one offer
Focuses on what is common in the needs of consumers rather than on what is different
The company designs a product and a marketing program that will appeal to the largest number of buyers
what are the characteristics of segmented marketing (differentiated marketing)
Firm targets several market segments and designs separate offers for each
ex: Toyota produces different brands of cars, from Yaris to Lexus, each targeting a different group of car buyers
what are the characteristics of concentrated marketing (niche marketing)
Firm goes after a large share of one or a few segments or niches
what are the characteristics of micro marketing
Firm tailors products and marketing programs to the needs of specific segments
includes local and individual marketing
what is local marketing?
tailoring brands and promotions to the needs and wants of a small group of people
they live in the same city or neighbourhood or who shop at the same store
what is individual marketing?
tailoring products and marketing programs to the needs and preferences of individual customers
mass customization
convenience stores practice which type of marketing?
micro marketing
in this branch, they do local marketing
stock their shelves with the items they know the people in their neighbourhood are likely to want
what are the factors in choosing a targeting strategy
company resources
product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies
which type of marketing makes the most sense when company resources are limited?
concentrated marketing makes the most sense
which type of marketing is better suited for uniform products such as grapefruit or steel?
undifferentiated marketing
Products that can vary in design, such as cameras and cars, are more suited to which types of marketing?
differentiation or concentration marketing
In the mature stage of the product life cycle, which type of marketing makes more sense to stick out of the crowd?
differentiated marketing
If buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, which type of marketing is the most appropriate?
undifferentiated marketing
if competitors use differentiated or concentrated marketing,, which type of marketing should definitely not be used?
undifferentiated marketing
when competitors use undifferentiated marketing, which type of marketing can competitors use to gain an advantage?
differentiated or concentrated marketing
focusing on the needs of buyers in specific segments
what are the impacts of social responsible marketing?
why?
Socially responsible marketing serves the interests of the company and consumers
Social responsibility trumps profitability if marketing efforts are seen as exploitative or irresponsible
what is, the majority of the time, a product’s positioning based on?
on the product’s brand name
what do a differentiation and positioning strategy involve?
- Identifying differentiating competitive advantages
- Selecting competitive advantage(s) on which to create position
- Developing a value proposition and positioning strategy
- Identifying differentiating competitive advantages
Understand customer needs better than competitors, then deliver more value
Points of differentiation can occur anywhere in the entire customer experience
what defines the product in the customer experience?
Features
performance
style
design
what defines services in the customer experience?
Expedient
convenient
careful delivery
what defines channels in the customer experience?
Coverage
expertise
performance
what defines people in the customer experience?
Well trained employees
culture
morale
what defines image in the customer experience?
convey distinctive benefits and positioning
- Selecting competitive advantage(s) on which to create position
Can be one unique selling proposition (USP)
(e.g. head and shoulders, gets rid of dandruff)
can be multiple differences
which are the differences that should be promoted as competitive advantage
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
what does it mean for a competitive difference to be important?
the difference delivers a highly valued benefit to target buyers
what does it mean for a competitive difference to be distinctive?
Competitors do not offer the difference
what does it mean for a competitive difference to be superior?
The difference is superior to other ways that customers might obtain the same benefit
what does it mean for a competitive difference to be communicable?
The difference is communicable and visible to buyers
what does it mean for a competitive difference to be preemptive?
Competitors cannot easily copy the difference
what does it mean for a competitive difference to be affordable?
Buyers can afford to pay for the difference
what does it mean for a competitive difference to be profitable?
The company can introduce the difference profitably
- the value proposition
the Value proposition is the full mix of benefits on which the brand is differentiated and positioned
the square thingy which represents the possible value propositions
what are the possible value propositions
More for more
More for same
More for less
Same for less
Less for much less
which value proposition is harder to do in the long run?
more for less
what is an example of same for less proposition?
Walmart vs department store
what is the less for much less value proposition?
Fewer benefits for a much lower price
true or nah
Marketing-mix efforts (4 Ps) must support the positioning strategy
truuuue
sometimes, position must be monitored, and sometimes adapted, but to what?
consumer needs
values
attitudes
competitive fluctuations
