Target Marketing, Positioning and CRM (Chapter 7) Flashcards
What are the steps in the target marketing process? (Figure 7.1)
1) Segmentation - Identify and describe target markets.
2) Targeting - Evaluate segments and decide which to go after.
3) Positioning - Develop a marketing mix that will create a competitive advantage in the minds of the selected target market.
What is segmentation marketing?
Dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics (usually some need) and marketing to them based on this. In most cases, a company or product cannot be all things to all people; it should appeal to segments it has identified as having a need for its product. (Differentiating your product, price, place and promotion to meet the needs of specific target segments).
Why segment?
Markets are made up of smaller pieces based on shared characteristics (usually needs) and it is typically not meaningful to market to them altogether (only places like WalMart can really pull this off) so you have to appeal to individual segments.
What are segmentation variables and descriptors used for?
Variables are characteristics that tell us why segments differ and help us divide the market into smaller slices. Descriptors are characteristics that help us describe the identified segments in detail and find and reach different segments.
How do you determine which segments to target?
When doing market research, one comes up with descriptors that you use to write the target profile, which displays the target market in human terms.
What determines what a legitimate segment is?
Is significant (large enough and growing), is accessible (there is a way to communicate with group; marketing, you can count members and reactions; measurable), and it is sufficiently unique (needs are recognizable different than other groups).
What are Psychographics?
The use of psychological, sociological and anthropological factors to construct market segments. Groups consumers into segments by things like shared activities, interests, opinions and AIOs.
What is VALS?
(Values and Lifestyles). Psychographic system that divides entire US population into eight segments. Innovators (High resources/innovation) and survivors (low resources/innovation) at top and bottom, with three primary motivations as key aspects of system
Ideals (Thinkers and Believers)
Achievement (Achievers and Strivers)
Self-expression (Experiencers and Makers)
What is segmenting by behavior?
Segmentation based on how consumers act toward, feel about, or use a good or service. Can divide market into users or nonusers and reward users or try to win over nonusers and between heavy, moderate or light users. Usually use 80/20 rule, idea that 20% of purchasers account for 80% of product’s sales. Usage rate and usage occasions important.
What is a segment profile?
Description of the typical customer in that segment that marketers often give a real name to and talk about like a real person.
What is position? What is positioning?
Description of the typical customer in that market. How marketers use the 4 Ps (marketing mix) to create customers’ perceptions and position brand relative to competition.
