Marketing Chapter 6

Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments

True

Marketers believe that behavior variables are the best starting point for building market segments

True

People in the same demographic group can have very different psychographic characteristics

True

Studying less-loyal customers can help a company detect which brands are most competitive with its own

True

Target Market

a set of buyers sharing common needs or characteristics that the company decides to serve

Differentiation

actually differentiating the market offering to create superior customer value

competitive advantage

advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices

in what specific ways can a company differentiate itself or its market offer ?

along the lines of Product, Services, Channels, People or Image

Positioning

arranging for a market offering to occupy a clear, distinctive & desirable place relative to competing products in the minds of target consumers

markets that use income segmentation

automobiles, clothing, cosmetic, financial services & travel

All companies that use income segmentation target the affluent

False; many retailers successfully target low- to middle income families

What additional variables do business marketers use as compared with consumer marketers?

Operating characteristics, purchasing approaches, situational factors, & personal characteristics

Age is often a poor predictor of a person's life cycle, health, work or family status, needs, & buying power

TRUE

How does a firm achieve a strong market position through concentrated marketing?

b/c of its greater knowledge of consumer needs in the niches it serves & the special reputation it acquires

unique selling proposition (USP)

brand should pick one attribute & tout itself as #1 on that attribute only

product differentiation

brands can be differentiated on features, performance, or style & design

Affordable

buyers can afford to pay for the difference

What is required for developing separate marketing plans for separate segments ?

extra marketing research, forecasting, sales analysis, promotion planning, channel management

services differentiation

firm can differentiate the services that accompany the product; ex: speedy, convenient service

Individual marketing

form of micro marketing; tailoring products & marketing programs to the needs and preferences of individual customers

Intermarket (Cross-market) Segmentation

forming segments of consumers who have similar needs & buying behaviors even though they are located in different countries

channel differentiation

gain competitive advantage throughout the way they design their channel's coverage, expertise, & performance

International marketing variables

geographic location, economic factors, political & legal factors, cultural factors

people differentiation

hiring and training better people than the competing brands do; company must carefully select their customer contact people & train them well

product position

how a product is defined by consumers on important attributes - the place a product occupies in consumer's minds relative to competing products

Concentrated marketing can be highly profitable but....

it involves higher-than-normal risks

2 most common variables used in psychographic segmentation

lifestyle and personality

Concentrated Marketing (Niche Marketing)

market coverage strategy in which a firm goes after a large share of one or a few segments or niches

Substantial

market segments are large or profitable enough to serve. should be the largest possible homogenous group worth pursuing w/ a tailored marketing program

Accessible

market segments can be effectively reached & served

Undifferentiated (Mass) Marketing

market-coverage strategy in which a firm decides to ignore market segment differences & go after the whole market with one offer

Differentiated marketing (segmented marketing)

market-coverage strategy in which a firm decides to target several market segments & designs separate offers for each

Usage Rate

markets can also be segmented into light, medium & heavy product users

User status

markets can be segmented into nonusers, ex-users, potential users, 1st time users, & regular users

What kind of segmentation helps firms build up product usage?

occasion segmentation

Same-for-less

offer many of the same brands but at deep discounts based on superior purchasing power & lower cost operations (walmart)

More-for-less

offering best product selection, best service and lowest prices compared to competitors; difficult to sustain this position bc its cost more to offer more

Other names for individual marketing

one-to-one marketing, mass customization, markets-of-one marketing

Less-for-much less

positioning that involves meeting consumers' lower performance or quality requirements at a much lower price (costco)

More-for-more

positioning that involves providing the most upscale product or service & charging a higher price to cover the higher costs (starbucks)

More-for-Same

positioning the brand as offering more for the same price (target)

Mass customization

process by which firms interact one to one with masses of customers to design products, services, & marketing programs tailor-made to individual needs

differentiated or concentrated marketing is most suited for...?

products that can vary in design; i.e cameras, cars, etc.

what does socially responsible marketing call for ?

segmentation & targeting that serve to just the interests of the company but also the interests of those targeted

Loyalty Status

segmented by consumer loyalty; consumers can be loyal to brands, stores & companies

what are the 4 important topics of segmentation?

segmenting consumer markets, segmenting business markets, segmenting international markets, & requirements for effective segmentation

Differentiable

segments are conceptually distinguishable & respond differently to different marketing mix elements & programs

perceptual positioning map

show consumer perceptions of their brands versus those of competing products on important buying dimensions

Measurable

size, purchasing power, & profiles of the segments can be measured

SoLoMo Marketing

social + local + mobile marketing; using geo location tech to track customer whereabouts and engage them on the go with localized deals and info

positioning statement

statement that summarizes company or brand positioning

Micromarketing

tailoring products & marketing programs to the needs and wants of specific individuals and local customer segments; includes local marketing & individual marketing

What is the goal of the final 2 steps? (Differentiation & Positioning)

the company decides on a value proposition; how it will create value for target customers

What is the goal of the 1st 2 steps of designing a customer value driven marketing strategy? (Segmentation & targeting)

the company selects the customers that it will serve & identifies different ways to segment the market & develop profiles of the resulting market segments

when choosing a targeting strategy, you should consider ?

the company's resources, degrees of product variability, product's life-cycle stage, market variability, and competitors' marketing strategy

value proposition

the full positioning of a brand - the full mix of benefits on which it is differentiated & positioned

Niching lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger companies

true

Local marketing

type of micro marketing; tailoring brands and promotions to the needs and wants of local customer segments - cities, neighborhoods, & even specific stores

undifferentiated marketing is most suited for.....?

uniform products

Multiple segmentation bases

use multiple segmentation bases in an effort to identify smaller, better-defined target groups

What does mass marketing focus on?

what is common in the needs of consumers rather than what is different

Communicable

difference is communicable & visible to buyers

What are 2 reasons that demographic segmenting is most popular for segmenting customer groups?

- consumer needs/wants/usage rates often vary closely with demographic variables - demographic variables are easier to measure than most other types

What is required for benefit segmentation?

-find the major benefits people look for in a product class -find the kinds of people that look for each benefit -find major brands that deliver each benefit

what are the 3 steps of the differentiation & positioning task ?

-identifying a set of differentiating competitive advantages on which to build a position -choosing the right competitive advantages -selecting an overall positioning strategy

what are the goals in regards to user status?

-reinforce & retain regular users -attract targeted non-users -reinvigorate relationships w/ ex-users

What 3 factors are needed to evaluate market segments?

-segment size & growth -segment structural attractiveness -company objectives & resources

Superior

difference is superior to other ways that customers might obtain the same benefit

What are the most popular bases for segmenting customer groups?

Demographic factors

Marketers rarely use more than one variable in their segmentation analysis

False

variables used to segment a consumer market

Geographic, Demographic, Psychographic, & Behavioral

A difference is worth establishing to the extent that it satisfies what criteria?

Important, Distinctive, Superior, Communicable, Preemptive, Affordable, Profitable

What are the 4 major steps in designing a customer-value driven marketing strategy ?

Market segmentation, market targeting, differentiation, & positioning

What are the requirements for effective segmentation?

Measurable, Accessible, Substantial, Differentiable, Actionable

what is the form that a positioning statement should use ?

To (target segment & need) our (brand) is (concept) that (point of difference)

What are drawbacks to local marketing ?

can drive up manufacturing & marketing costs by reducing the economies of scale; can create logistics problems as companies try to meet varied requirements of different local markets

how is responsible children advertising encouraged?

children's advertising review unit; published extensive children's advertising guidelines that recognizes the special needs of child audiences

What markets most often use gender segmentation?

clothing, cosmetics, toiletries, toys & magazines

Profitable

company can introduce the difference profitably

image differentiation

company or brand image should convey a product's distinctive benefits & positioning

Preemptive

competitors cannot easily copy the difference

Distinctive

competitors do not offer the difference, or the company can offer it in a more distinctive way

What factors affect segment attractiveness ?

competitors, new entrants, substitute products, power of buyers, powerful suppliers

which marketing strategy is best for when a firm's resources are limited ?

concentrated marketing

Important

difference delivers a highly valued benefit to target buyers

Geographic Segmentation

dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods

Income segmentation

dividing a market into different income segments

Market Segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors & who might require separate marketing strategies or mixes

Age and Life-cycle segmentation

dividing in different age or life-cycle groups

Gender segmentation

dividing market into different segments based on gender

Psychographic Segmentation

dividing market into different segments based on social class, lifestyle, or personality characteristics

Behavioral Segmentation

dividing market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

Occasion segmentation

dividing the market into segments according to occasions when buyers get the idea to buy, actually make the purchase or use purchases item

Benefit Segmentation

dividing the market into segments according to the different benefits that consumers seek from a product

Demographic Segmentation

dividing the market into segments based on variable such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, & generation

Actionable

effective programs can be designed for attracting & serving the segments

Market Targeting

evaluating each market segments attractiveness & selecting one or more segments to serve