Marketing Chapter 6

Market-targeting Strategies

- Undifferentiated (mass) marketing - Differentiated (segmented) marketing - Concentrated (niche) marketing - Micromarketing (local or individual marketing)

the four major steps in designing a customer value-driven marketing strategy

1. Market segmentation 2. Market Targeting 3. Differentiation 4. Positioning

Requirement for Effective Segmentation

1. Measurable-The size, purchasing power, and profiles of the segments can be measured. 2. Accessible-The market segments can be effectively reached and served. 3.Substantial- The market segments are large or profitable enough to serve. 4. Differentiable- The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. 5.Actionable- Effective programs can be designed for attracting and serving the segments.

Evaluating Marketing Segments

1. Segment size and growth 2. Segment structural attractiveness- many strong and aggressive competitors, easy for new entrants, potential substitute products, buyers with strong bargaining power, and powerful suppliers that can control prices or products or services. 3. Company objectives and resources

Loyalty Status in Marketing Segmenting

1.Completely loyal- they buy one brand all the time and can't wait to tell others about it. 2.Somewhat loyal- they are loyal to two or three brands of a given product or favor one brand while sometimes buying others.

Undifferentiated (mass) Marketing

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. - Focuses on what is common in the needs of consumers rather than on what is different.

Differentiated (segmented) Marketing

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

Concentrated (niche) Marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches. - Markets more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. - Market more efficiently, targeting its products and services, channels, and communications programs toward only consumers that it can serve best and more profitably

Target Market

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

Geographic Segmentation

Calls for dividing the market into different geographical units, such as nations, regions, states, counties, cities, or even neighborhoods.

Positioning

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

Market Targeting

Consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.

Behavioral Segmentation

Divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.

Demographic Segmentation

Divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Income Segmentation

Dividing a market into different income segments.

Psychographic Segmentation

Dividing a market into different income segments.

Gender Segmentation

Dividing a market into different segments based on gender.

Occasion Segmentation

Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.

Benefit Segmentation

Dividing the market into segments according to the different benefits that consumers seek from the product.

Intermarket (Cross-market) Segmentation

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries due to new technologies.

Segmentation Variables

Geographic Demographic Psychographic Behavioral

Segmenting International Market

Geographical location Economic factors Political and legal factors Cultural factors

Differentiation

Involves actually differentiating the firm's market offering to create superior customer value.

Market Segmentation

Involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Mass Customization

Is the process by which firms interact one to one with masses of customers to design products and services tailor-made to individual needs.

Product Position

Is the way a product is defined by consumers on important attributes—the place a product occupies in consumers' minds relative to competing products.

Usage Rate in Market Segmenting

Light Medium Heavy

User Status in Market Segmenting

Markets can be segmented into: Nonusers Ex-users Potential users First-time users Regular user

Age and Life-cycle Segmentation

Offering different products or using different marketing approaches for different age and life-cycle groups.

Segmenting Business Market

Operating characteristics Purchasing approaches Situational factors Personal characteristics

Market Variability

Refers to shifts and changes in the market. (If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate)

Perceptual Positioning Maps

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

Individual Marketing

Tailoring products and marketing programs to the needs and preferences of individual customer. - Also known as one-to-one marketing, mass customization, and markets-of-one marketing.

Micromarketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing.

Multiple Segmentation Bases

Use multiple variables in an effort to identify smaller, better-defined target groups

Local Marketing

involves tailoring brands and promotions to the needs and wants of local customer groups- cities, neighborhoods, and even specific stores.

Competitor's Marketing Strategies

when competitors use differentiated or concentrated marketing, focusing on the needs of buyers in specific segments.