Principles of Marketing Chapter 7

Niche or concentrated marketing has great advantages. What are the good and bad consequences of picking it as your product strategy.

1. Concentrated (niche) Marketing = A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches 2. Can market more effectively, efficiently to target 3. Allows smaller companies with more limited resources to succeed 4. If a larger firm targets that market though, it is not good for the smaller firm

Describe the different segmentation strategies in either the beverage market (Coke v Pepsi) or retail store business (WalMart, Target, Sears, JCPenney), or Autos (figure 7.3) and how they chose to compete? Why does segmenting establish a brand and image with consumers and customers, and what is the advantage or disadvantage?

1. Figure 7.3 2. Prices are similar, but vehicles are differentiated by their luxuries and performances

Four examples of Segmentation are Geographic, Demographic, Psychographic and Behavioral. Describe the different types and give examples of each.

1. Geographic Segmentation = Dividing a market into different geographical units, such as nations, states, regions, countries, cities, or even neighborhoods 2. Demographic Segmentation = Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation 3. Psychographic Segmentation = Dividing a market into different segments based on lifestyle or personality characteristics 4. Behavioral Segmentation = Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

Dunkin Donuts refreshed their Brand and Marketing Strategy recently. What does the Brand Essence and slogan "Noting too fancy - just meeting the everyday, all-day needs of the Dunkin tribe" say about the company.

1. Grit. 2. Wants to get basic needs (not too fancy like Starbucks)

Aldi's has a very precise Brand Differentiation for their stores as they try to reach their target market. What is it and how have they implemented it?

1. Less Benefits for Much Less Price 2. Everyday extra-low prices 3. When deciding between eating well and saving money, we chose both

What is "Market Segmentation" and why is it an important first step?

1. Market Segmentation = Dividing a market into distinct groups of buyers who have different needs. Characteristics, or behaviors and who might require separate marketing strategies or mixes 2. Marketing develops a profile of its target customer 3. Company uses this for first step so it is always concentrated on who it is trying to sell to 4. Positioning Maps help compare similar products but with price and an orientation difference (luxury/performance, style/comfort, etc.)

"Targeting" your audience helps a company in many ways. How is it necessary for a Marketing Strategy to have a statement and focus on a target?

1. Marketing Targeting = Evaluating each market segment's attractiveness and selecting one or more segments to serve 2. Buyers in different segments have different wants and needs, so if you do not focus on one maybe two segments, you will be all over the place and not really star in one segment

Measurable, Accessible, Substantial, Differentiable and Actionable are the five requirements for a segmentation exercise to be successful. Describe each characteristic features.

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. A segment should be the largest possible homogeneous group worth pursing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than seven feet 4. Differentiable = The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks, they do not constitute separate segments 5. Actionable = Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment

Because of change in technology and access, how has "micromarketing" and "local marketing" become possible and more common? Is "Individual" or "hypertargeting" possible and good.

1. 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 2. Local Marketing = Tailoring brands and marketing to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores 3. Companies can now track consumers' whereabouts closely and engage them on the go with localized deals and information fast, wherever they may be 1. SoLoMo (Social + Local + Mobile) Marketing 4. Individual Marketing = Tailoring products and marketing programs to the needs and preferences of individual customers 5. Can be risky with data usage (Target example) 6. Many people find it helpful though

McDonald's does Segment and Target Marketing by dividing their customers into what kind of groupings and segments. Would you do it their way?

1. Middle to lower income, less healthy options, fast food 2. Yes, no fast food restaurant is going to be super healthy

How does "Behavioral segmentation" help improve customer loyalty or "occasion" shopping on Christmas or "Benefits" segment?

1. 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 2. Benefit Segmentation = Dividing the market into segments according to the different benefits that consumers seek from the product 3. When the firm is able to get customers for a certain event (Christmas) it introduces them to the firm and its quality products 4. Next time the consumer goes to shop, they will check with that firm, if they buy again, that builds customer loyalty

What is a "Positioning Statement" and why is it important?

1. Positioning Statement = A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference) 2. The case for the brand's superiority is made on its points of difference 3. States the product's membership in a category and then shows its point of difference from other members of the category

What is a "Product Positioning" map and what does it tell you about how a company wants to work with their target market?

1. Product Position = The way a product is defined by consumers on important attributes - the place it occupies in consumers' minds relative to competing products 2. A product's position is the complex set of perceptions, impressions, and feelings that consumers have for the product compared with competing products 3. Different positions indicate different target markets 1. Example: Lexus LX570 and Toyota Land Cruiser are meant for different people

Harley Davidson has a very specific target market and segment that they have worked with for the past 60 years. What challenges are they having as their demographic and customers change and age?

1. SIMILAR TO EARLIER HARLEY QUESTION 2. They do not have many women/minority consumers 3. There challenge is finding a way for these people to buy their products 4. Very loyal consumer base

Companies and Brand Managers look for competitive advantage through a "differentiation" strategy and careful product positioning. Give an example of how they might implement this type of strategy and development of their product's image/ essence.

1. The differentiation and positioning process has three steps 1. Identifying a set of differentiating competitive advantages on which to build a position 1. Competitive Advantage = An advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices 2. Needs to not only offer but deliver on promises 3. Product Differentiation can separate products through features, performance, or style and design 4. Service Differentiation can be through speedy, polite, and convenient service 2. Choosing the right competitive advantages 1. Usually the fewer the better for competitive advantages to promote 2. Which Differences to Promote? 1. Important = The difference delivers a highly valued benefit to target buyers 2. Distinctive = Competitors do not offer the difference, or the company can offer it in a more distinctive way 3. Superior = The difference is superior to other ways that customer might obtain the same benefit 4. Communicable = The difference is communicable and visible to buyers 5. Preemptive = Competitors cannot easily copy the difference 6. Affordable = Buyers can afford to pay for the difference 7. Profitable = The company can introduce the difference profitably 3. Selecting an overall positioning strategy 1. Value Proposition = The full positioning of a brand - the full mix of benefits on which it is positioned 2. Winning Value Propositions: 1. More Benefits for More Price 2. More Benefits for the Same Price 3. More Benefits for Less Price 4. The Same Benefits for Less Price 5. Less Benefits for Much Less Price 3. Losing Value Propositions 1. The same Benefits for More Price 2. Less Benefits for More Price 3. Less Benefits for the Same Price

Mountain Dew has chosen to focus on a specific segment of the market with their ads and promotions. What segment have they chosen and how have they implemented it.

1. The type of people to get matching Mountain Dew tattoos 2. Sponsored action sport competitions which their target audience would watch 3. Video game market with energy drinks

What is an undifferentiated and differentiated marketing strategy?

1. 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 2. Differentiated (segmented) Marketing = A market-coverage strategy in which a firm targets several market segments and designs separate offers for each

A companies' "Value proposition" is written to communicate Brand image to the "intended" target market. What are the key elements of a value prop?

1. Value Proposition = The full positioning of a brand- the full mix of benefit son which it is positioned 2. Key elements are benefits and price

How does B2B Sales handle segmentation?

1. Very similar to B2C 2. Customer operating characteristics, Purchasing approaches, Situational factors, and personal characteristics 3. Segmenting International Markets: Geographic Location, Political and Legal Factors, Cultural Factors