Marketing Ch 9: Segmentation, Targeting, and Positioning

Undifferentiated Targeting Strategy

"Mass Marketing" marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix Advantages: potential savings on production and marketing costs Disadvantages: unimaginative, product, offerings, company, more susceptible to competition Ex: Coca Cola, M and Ms

Demographic Segmentation

- Age (ESPN 2 for teens) - Gender (Pantene, Dad Gear) - Income (dollar general, high end cars) - Ethnicity (whiskey, Asian hair products) - Family Life Cycle

Effective Positioning

1.) assess the positions occupied by competing products. 2.) determine the dimensions underlying these positions. 3.) choose a market position, where marketing affects will have the greatest impact - value proposition

Perceptual Mapping

A means of displaying or graphing, and two or more dimensions, the location of products, brands, or groups of products in customers minds Ex: 2 variable on x and y axis, marked with circles

Concentrated Targeting Strategy

A strategy used to select one segment of a market (a niche) for targeting marketing efforts Advantages: concentration of resources, meets narrowly defined segment, small firms and compete, strong positioning Disadvantages: segments too small or changing, large competitors may market to niche segment (Oldsmobile) Ex: Starbucks, HK ARMY

Family Life Cycle

Age, Marital Status, Children Ex: AXE for teens, lending free for married with children, subdivision for single moms, retirement communities

Usage Rate Segmentation

Based on QUANTITY purchased or consumed Ex: babybels are small amounts of cheese, Heineken for moderate drinkers, Schafer for heavy drinkers

Occasion Segmentation

Based on WHEN a product is purchased or consumed Ex: groom's suits, prom dresses

Repositioning

Changing consumers perceptions of a brand in relation to competing brands Ex: Marlboro from women to macho men, Sprite started for adults then to teens

Product Differentiation

Creating the Value Proposition A positioning strategy that some firms used to distinguish their products from those of competitors Distinctions can be real or perceived Ex: Bayer for heart, excedrin for migraines

Market Positioning

Defining the marketing mix variables to influence potential customers overall perception of a product in comparison with competing products

Behavioral

Divide customers into groups based on how they use the product

Micromarketing/One-to-One Marketing

Extreme form of segmentation that tailors a product to suit an individual customers wants and needs Ex: computers with colors, storage, etc.

Methods for Segmentation

Geographic Demographic Psychographic Benefit Behavioral Geodemographic Companies usually use more than one

Self Values

Goals for life Ex: mom education, online school

Geodemographic

Group and consumers on a combination of geographic, demographic, and lifestyle characteristics Ex: claritas to look up zip codes

Geographic Segmentation

Grouping consumers on the basis of where they live - Region of the country/world: Campbell's gumbo in Louisiana, spicier nacho cheese in Texas - market size, density (combo washer and dryer) - climate (snowblowers)

Positioning Methods for Differntiated

How companies differentiate themselves, create their value proposition Salient attributes - heart health (bayer) Price and Quality- lululemon vs Walmart Use or Application - baking soda Product User - choosy moms choose Jif Symbols - Nike logo Competitor - T-Mobile coverage maps Emotion - Disney

Profitable

Market growth, competitiveness, access

Psychographic

Market segmentation on the basis of personality, lifestyles, motives, and attitudes Personality - Porsche buyers Motives - luxury car makers, status related motives Lifestyles - how time is spent? Beliefs, importance of things around them, socioeconomic characteristics Self Values, Concept

Reachable

Members of targeted segments must be reachable with marketing mix

Differentiated Targeting Strategy

Multisegment A strategy that chooses two or more well define market segments and develops a distinct marketing mix for each Advantages: greater financial success, economies of scale Ex: Marriot International

Costs of Differentiated Targeting

Product design, production, promotion, inventory, marketing, research, management, cannibalization

Substantial

Segment must be large enough to warrant a special marketing mix

Identifiable

Segments must be identifiable and their size measurable

Self Concept

Self Image Ex: Dove wrinkles and beauty spots

Cannibalization

Situation that occurs when sales of a new product cut into sales of a firm's existing products Ex: Pepsi throwback mountain dew

Loyalty Segmentation

Strategy to RETAIN the most profitable customers Ex: airlines

Position

The place a product, Brian, or group of products, occupies, and consumers minds relative to competing offerings

Benefit

The process of grouping customers into market segments, according to the benefits they seek from the product Ex: snack food market table (Tostitos = parties, snickers = good tasting, satisfies hunger)

Responsive

Unless segment responds to a marketing mix differently, no separate treatment is needed

Targets different segments

What does each brand do?

Segment Attractiveness Evaluation

identifiable, substantial, reachable, responsive, profitable