MKT 300 Chapter 9

segment profitability

( segment size x segment adoption % x purchase behavior x profit margin % ) - fixed costs

occasion segmentation

based on when a product is purchased or consumed

differentiated targeting strategy

firm targets several market segments with a different offering for each

undifferentiated targeting strategy

for products providing some benefit for everyone

Step Two

helps firms understand customer profiles in each segment firms can distinguish customer similarities within a segment and differences across segments. methods: geographic, demographic, psychographic, benefits, behavioral

tapestry segmentation considerations

home value, age, education, family type, income, employment

three primary motivations of US consumers

ideals, achievement. and self expression

daniel joined an outdoors activity club. he has begun to purchase many books.

psychographic

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

value proposition key elements

target market offering name/brand product or concept unique part of benefits

Five steps in STP

1. Establish strategy/objectives 2. Use segmentation methods 3. Evaluate segment alternatives 4. Select Target Market 5. Identify and develop positioning strategy

six parts to perceptual mapping

1. determine consumer's perceptions and evaluations of product in relation to competitor 2. identify market's ideal points and size 3. identify competitors positions 4. determine consumer preferences 5. select position 6. monitor position strategy

Step Three

Evaluate segment attractiveness; identifiable, substantial, responsive, reachable, profitable

Step Four

Select target market. marketer's ability to pursue an opportunity/ segment Undifferentiated, differentiated, concentrated, and micromarketing

why might a start-up company benefit from selecting a concentrated targeting strategy?

a concentrated strategy is a more efficient use of limited resources

ideal point

a point where a market segment's desired product would be located on a perceptual map

If a firm positions its product too closely to the competition, they are risking:

a trademark infringement lawsuit

ease of developing channels and brand familiarity is known as market ____________

access

how do firms commonly position themselves in the marketplace when using a competition positioning method?

against a specific competitor, against an entire product classification, and against an entire service classification

changing a products positioning is

always a challenge to do so.

Step One

articulate vision of marketing strategy clearly- must be consistent with firms mission and SWOT

what customers need from a computer and how they expect it to improve their life is an example of __________ segementation

benefit

which of the following are the circles for a successful value proposition?

benefits offered by competitors, the company's offerings, and customer needs and wants

marketers ask consumers a series of questions about competitors products in order to determine the competing products ___________ on consumers perceptual maps

brand positions

example of undifferentiated strategy

companies that sell salt, sugar, or gasoline

"pork. the other white meat." is a positioning strategy that focuses on __________

competition

geographic segmentation

continent/within US. `

marketing positioning

defining the market mix variables so that target customers have a clear distinctive, understanding of what the product does

psychographics

delves into hoe customers describe themselves; allows describing oneself using those characteristics that help them choose how to occupy their time and what underlies

perceptual mapping

displays, in two or more dimensions, the position of products or brands in the consumer's mind

drawback to psychographic segmentation

expensive

foster designs sells diff types of clothes for men and women. to ensure the retail store locations contain the appropriate assortment of clothing for the area, the firm should use _______________ segmentation

geodemographic

behavioral segmentation

groups on basis of how they use product. occasion and loyalty

benefit segmentation

groups on the basis of benefits derived from products or services convenience, economy, prestige

Step Five

identify and develop position strategy. Value proposition elements: target market, offering name/brand, product or concept, and unique point of differences/benefits Positioning methods: value, salient attributes, symbols, and competition perceptual mapping

salient attributes highlights features that are most ______________ to the target market

important

self-values

life goals, component of psychographics referring to overriding desires that drive how a person lives their life. help determines benefits that target market may be looking for from a product!

which of the following is not a factor influencing the profitability of a segment over the lifetime of a typical customer relationship

market growth rate

which of the following are key factors to keep in mind when marketers focus their assessments on the potential profitability of marker segments, both currently and future.

market growth, market access, and market competitiveness

psychographic segmentation

method of segmenting customers based on how they spend their time and money, what activities they do, and their opinions and attitudes about the world we live in lifestyle, self concept, self values

Compared to most available targeting strategies, differentiated targeting is _____.

more expensive

psychographics study how people ______________ their time and the underlying psychological factors that determine their choices

occupy

example of occasion segmentation for a chocolate maker

offers some of its chocolate in heart shaped boxes for valentines day

when using a perceptual map, a company should select a ________ based on the wants of the target market segment

position

A well-known symbol can be used as a ____ tool, distinguishing the brand from its competition.

positioning

which aspect of the STP process involves adjusting the marketing mix to give consumers a clear picture of what a product does in comparison to competing products?

positioning

sometimes, firms find it difficult to use demographics in their segmentation strategies. This is because in some cases demographics _________________

predict consumer wants and needs poorly

Value and Lifestyle Survey (VALS)

psychographic tool that classifies consumers into 8 segments: innovators, thinkers, believers, achievers, strivers, experiencers, makers, or survivors

demographic segmentation

segmenting markets by age, gender, income, ethnic background, and family life cycle

concentrated target strategy

selecting a single, primary target market and focusing all energies on providing a product to fit that market's needs

McDonald's often targets families by showing families having a good time in its advertising. This appeals to a family's:

self-concept

John is a supporter of environmental issues, He is constantly examining the "green" credentials of the products he purchases. John's purchasing behavior is a reflection of his ______.

self-values

because consumers' tastes shift, markets are not _____________ and competitors must therefore _______ those shifts

stagnant; react to

loyalty segmentation

strategy of investing in loyalty initiatives to retain the firm's most profitable customers

Once the firm understands how its competitors' brands are viewed by the consumer, it should next _____.

study how the competitors have positioned themselves

once a firm is able to identify the market and is able to design products to meet its need, the next step is determine if the market size is

substantial

geodemographic segmentation

the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics

self-concept

the image a person has of himself or herself; a component of psychographics

ideal points

the position at which a particular market segment's ideal product would lie on a perceptual map

the best situation for a firm in the circle is

the product overlaps with customer needs but not with competitors offerings

a caribbean resort wishes to identify customers that can afford and have the most interest in taking tropical vacations. using the val framework, the resort can develop a successful advertising campaign based on the ____________ of its target customers

underlying motivations

value proposition

unique value a product provides. benefits both firms provide that customers do not appear to need

even if a firm has developed a product that addresses the needs of a specific, substantial market segement, its efforts will fail if the segment is ___________

unreachable

positioning methods

value salient attributes symbol competition

lifestyle

way person lives his/her life to achieve goals; component of psychographics