Unit 4: Building Marketing Strategy Through Segmentation & Targeting Flashcards
________________________ is a process by which all potential buyers are divided into groups that have different wants, needs, behavior, cost sensitivities, and other factors that require variations in the marketing mix (4Ps)
market segmentation
Streaming services have been using technology to take the practice of segmentation even further by allowing each individual to create the mix of artists and genres they desire. This extreme form of segmentation is often, paradoxically, referred to as ________________ or, more intuitively, one-to-one marketing through the ability of the customer to personalize/customize the offering.
mass customization
The Ansoff Matrix is a strategic opportunity matrix that matches…
products (or offerings, including services, more generally) with markets
The Ansoff Matrix has four sections:
Market Penetration –>
Market Development
Product Development
Diversification
serving more customers within the current customer segments with more of the same offerings
The Ansoff Matrix has four sections:
Market Penetration
Market Development –>
Product Development
Diversification
serving new customer segments with the same offerings the organization already produces
The Ansoff Matrix has four sections:
Market Penetration
Market Development
Product Development –>
Diversification
serving the current customer segments with new offerings that the organization could potentially build and offer
The Ansoff Matrix has four sections:
Market Penetration
Market Development
Product Development
Diversification –>
serving new customer segments with new offerings
The ____________________ is often used by managers to predict future cash contributions for strategic business units (SBUs) by plotting the current performance of the organization’s offerings in the market place based on two primary metrics
Boston Consulting Group’s Matrix
______________, which represents the percentage of market share that the offering captures in a given market relative to the market share of other offerings in the organization’s portfolio.
Relative Market Share
The vertical axis separates the analysis grid into “High” and “Low” _______________, which represents current rate of growth for the market in which that offering is sold.
Market Growth Rate
_______ are offerings that are capturing a relatively high percentage of the market share in a high-growth (i.e., growing quickly) market. We want to invest resources to keep building our success with these offerings.
Stars
____________ are offerings that are capturing a relatively high percentage of the market in a low-growth (i.e., not growing quickly) market. We only want to invest in these offerings to maintain market share (no big investments, since the market is growing slowly or, at times, not at all) and then use the revenue (cash) generated from the sales of these offerings to invest in the offerings that are in high-growth markets
Cash Cows
_____________ are offerings that are capturing a relatively smaller percentage of the market share, but are in a high-growth market. We would like to invest very carefully into these offerings
Question Marks
_____________ are offerings that are capturing a relatively smaller percentage of the market share and are in low-growth markets. Typically, we want to abandon (close down or “divest”) these offerings so that we can use resources to invest in other high potential offerings
Dogs
According to Ansoff’s Strategic Opportunity Matrix, which of the following provides the highest potential reward for the organization for creating future revenue streams?
Diversification
According to Ansoff’s Strategic Opportunity Matrix, which of the following provides the lowest potential reward for the organization for creating future revenue streams?
Marketing Penetration
Coca-Cola vending machines are found all over the world. The newest machines have an interactive screen that runs advertisements and allows users to obtain free photos of themselves and ringtones after they have bought a drink. Critics of these new vending machines are concerned that entertaining technology is being used to market sugary products. In terms of a SWOT analysis, this concern from outside critics would be an example of a(n):
threat.
Walmart can achieve a _____ using its relationships with suppliers to create an advantage that, ultimately, allows it to give customers low prices and good customer service.
cost competitive advantage
Arizona Tea, marketed by Vultaggio & Sons, took a basic drink and put it into unusual bottles with elaborate designs. The wide-mouthed, long-necked bottles are now considered to be trendsetters in the new age beverage industry, and customers often buy the tea just for the bottle. The success of Arizona Tea is based on:
a product differentiation competitive advantage.
Mojang Studio, creator of the very successful Minecraft game, has developed many other games you may not have heard of. Computer gaming companies often develop hundreds of games before gaining one successful game. It’s not always easy to spot the future success and this can result in potentially wasted funds. Mojang Studio released Minecraft Dungeons in 2020 as their latest product. Given that Minecraft Dungeons is in the high growth market of “sandbox” electronic games, but has yet to capture much relative market share, within which quadrant of the BCG matrix does their latest release lie?
Question Mark
SWOT
also known as a situation analysis. It provides an internal look into the firm’s strengths and weaknesses, as well as an external look at their opportunities and threats.
Characteristics of a useful segmentation:
identifiable, substantial, accessible, stable, differentiable, and actionable
Pottery Barn example and corresponding concept of RFM, or __________, ____________, and __________.
recency, frequency, and money
____________ is a way to use data based on existing customer behavior to predict how a new customer is likely to act in the future.
RFM analysis
Why do marketers segment their markets and what are the basic criteria for doing so successfully?
Segments must be large enough to warrant developing and maintaining a special marketing mix.
Why is targeting a specific group of customers usually more successful than trying to appeal to everyone?
It will satisfy the segment’s specific needs
A nationwide restaurant chain that varies its menu based on its location is an example of what kind of segmentation:
Geographic
Ride1Up is a maker of electric bikes in the U.S. If bike riding is closely associated with someone’s lifestyle (do they prefer to ride a bike to work, for errands, for leisure, and/or for exercise), how do they most likely decide what kind of bike styles to build and where to promote them?
Psychographic
Major Segmentation Variables for Consumer Markets:
Geographic
Demographic
Psychographics
Behavioral
Benefits Sought
Major Segmentation Variables for Business Markets:
Geographic
“Firmographics:” industry, firm size, global/regional, ownership
Buying Approach: centralized or decentralized purchase, purchase policies, involvement of decision makers
Behavioral
Benefits Sought
Unilever markets 10 different brands of shampoo, each targeting a different market segment. This is an example of a _________ targeting strategy.
multi-segment
Small firms or firms with a unique product may choose to focus on a single segment and pursue a(n) _________ targeting strategy.
niche
Which of the following is NOT identified as one of the factors that should influence the selection of segments for target markets?
Characteristics of Collaborators
The intersection of usage context and consumers’ emotional and functional needs is often called ________________
demand space.
ex. “recognizing mothers’ need to offer something healthy to kids before dinner, Knorr positioned its soup as a healthy snack and sales grew”
__________ allows us to infer latent, or hidden, segments from limited individual-level data.
Latent class analysis
A product delivery approach utilizing flexible, computer-aided manufacturing systems. Each customer can select and customize the product’s final features to his or her individual preferences.
Mass customization
Two broad approaches in preference-based segmentation:
multi-attribute model and conjoint analysis
a survey would then ask consumers to divide 100 points across these attributes in the order of importance, and then group consumers with similar preferences.
multi-attribute model
Characteristics of a useful segmentation: ____________, ___________, ____________, __________, ___________, and ____________.
identifiable, substantial, accessible, stable, differentiable, and actionable
__________: an organization should be able to _______ customers in each segment and to measure their characteristics, such as demographics or usage behavior
Identifiable and Measurable, identify
___________: a segment needs to be _________—large enough for a firm to serve profitability
Substantial, substantial
ex. Coke beverage aimed at 20-40 y/o males failed
__________: a segment needs to be _________ through communication and distribution channels independent of other segments.
Accessible, reachable
ex. young consumers who increasingly use social media have become more accessible to firms that are eager to engage them via Facebook, Twitter, Instagram, etc.
__________: a segment should be ________ over a long enough period of time that any marketing effort would be successful and profitable.
Stable, stable
____________: consumers in a segment should have similar needs, and these needs should _______ from the needs of consumers in other segments.
Differentiable, differ
__________: an organization should be able to create products and marketing programs for attracting and serving customers in the segments identified.
Actionable
Major segmentation variables for consumer markets is similar to major segmentation variables for ____________
business (B2B) markets
Psychographics
lifestyle, personality, activities, interests, opinions
Behavioral
usage rate, loyalty, product knowledge, involvement, purchase occasion, buying stage
Some markets may be ______________, meaning that there are virtually no differences in the needs of customers. In these markets, companies may decide to adopt a ____________ approach by designing the same product for everyone.
undifferentiated, mass-marketing
ex. large global firms such as Coca-Cola
factors that should influence the selection of segments for target markets?
Characteristics of various segments: how large they are, how fast they are growing, and how profitable they are likely to be
Company fit: firm should consider its own competencies and resources that are available to address the needs of different segments.
Characteristics of the competition: competitors’ strengths, competitive intensity, and competitors’ resources.
Geodemographic Segmentation
segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation.
ex. a clothing retailer that presents online customers with different products based on the weather or season in the region they reside in.
Heterogeneous set of people or organizations with needs or wants and the ability and willingness to buy
Market
A more homogeneous subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
Market Segment
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
Market Segmentation
Bases for Segmentation
Who are the customers?
Demographics, media habits, lifestyle
What have the customers done?
Usage, loyalty, profitability
Why do customers make the decisions they do?
Needs, preferences, decision process
