BMGT350 Chapter 6: Market segmentation
The website leftyslefthand.com markets products to left-handed consumers only. Which targeting strategy does this represent?
Concentrated marketing
________ involves dividing a market into smaller segments of buyers with distinct needs or behaviors that might require separate marketing strategies.
Market segmenting
Undifferentiated marketing (mass marketing)
a firm might decide to ignore market segment differences and target the whole market with one offer; focuses on what is common in needs of consumers rather than on what is different
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)
Heeltoe, a boutique that caters to the footwear needs of women, manufactures two different lines of footwear based on the purchasing power of its customers. One product line caters to the needs of affluent, middle-aged women, and the other line targets younger professionals and homemakers. Heeltoe most likely segments the consumer market based on ________ variables.
demographic
psychographic segmentation
divides buyers into different groups based on social class, lifestyle, or personality traits
Behavioral segmentation
divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product
Geographic segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
Benefits segmentation
dividing buyers according to the different benefits that they seek from a product
Demographic segmentation
dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation
Product differentiation
features, performance, or style and design
Concentrated marketing (niche marketing)
firm goes after a large share of one or a few segments or niches
Intermarket segmentation (cross-market segmentation)
form segments of consumers who have similar needs and buying behaviors even though they are located in different countries
Channel Differentiation
gain competitive advantage through the way they design their channel's coverage, expertise, and performance
Which type of market segmentation has long been used in clothing, cosmetics, toiletries, and magazines?
gender
Segmentation variables
geographic, demographic, psychographic, behavioral
Business buyers can be segmented
geographically, demographically (industry, company size), or by benefits sought, user status, usage rate, and loyalty status.
People differentiation
hiring and training better people than their competitors do
Local marketing
involves tailoring brands and promotions to the needs and wants of local customers
Business marketers also use addition variables such as
operating characteristics, purchasing approaches, situational factors, and personal characteristics
If competitors cannot easily copy the benefit a company chooses to promote, that benefit is said to be _________.
preemptive
Dividing buyers into groups based on social class, lifestyle, or personality characteristics is called ________ segmentation.
psychographic
Micromarketing
tailoring products and marketing programs to suit the tastes of specific individuals and locations; includes local and individual marketing
Individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers
Competitive advantage
the extent that a company can differentiate and position itself as providing superior customer value
Substantial
the market segments are large or profitable enough to serve
Accessible
the market segments can be effectively reached and served
mass customization
the process by which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs
Differentiable
the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs
Measurable
the size, purchasing power, and profiles of the segments can be measured
Product position
the way a product is defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products
A _______ defines how a company will create differentiated value for targeted segments and what positions it wants to occupy in those segments.
value proposition
Market segments must be
1. Measurable 2. Accessible 3. Substantial 4. Differentiable 5. Actionable
In which targeting strategy does a firm go after a large share of one or a few smaller segments?
Concentrated marketing
Income segmentation
Dividing a market into different income groups
What is 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
occasion segmentation
Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
________ segmentation calls for dividing the market into different nations, regions, states, counties, cities, or even neighborhoods.
Geographic
What are the four major variables used to segment consumer markets?
Geographic, demographic, psychographic, and behavioral
A company can differentiate itself from competitors using symbols such as McDonald's golden arches, Twitter's bird, and the Nike swoosh. Which type of differentiation is this?
Image differentiation
Which of the following are additional variables marketers use to segment business markets but not consumer markets?
Operating characteristics, purchasing approaches, situational factors, and personal characteristics
__________ show consumer perceptions of their brands versus those of competing products on important buying dimensions.
Perceptual positioning maps
Differentiation Types
Product, services, channels, people, or image
Your local pizzeria promises "Delivery in 30 minutes or less or the pizza is free." What point of differentiation is this?
Services differentiation
What is a product's position?
The way a product is defined by consumers on important attributes
Which structural factor would make a market segment attractive to enter?
Very few actual or potential substitute products
Image differentiation
a company or brand image should convey a product's distinctive benefits and positioning
Differentiated marketing (segmented marketing)
a firm decides to target several market segments and designs separate offers for each
Marketers must be careful to guard against stereotypes when using ________.
age and life cycle segmentation
target market
consists of a set of buyers who share common needs or characteristics that the company decides to serve
H2Coast, an automobile manufacturer, produces fuel-efficient hybrid vehicles that are targeted toward middle-income consumer groups. H2Coast most likely segments the consumer market based on ________ variables.
demographic
Actionable
effective programs can be designed for attracting and serving the segments
Grocers in neighborhoods with a large Hispanic population typically carry more brands that Hispanic consumers prefer than grocers in other neighborhoods. This is an example of ________.
local marketing
Evaluating each market segment's attractiveness and selecting one or more market segments to enter is called _____.
market targeting
Age and life-cycle segmentation
offering different products or using different marketing approaches for different age and life-cycle groups
The marketing manager at Arbor's Delicatessen targets customers who are working to lose weight but who still want to dine out. The restaurant chain offers a wide variety of low-fat, low-calorie meals that appeal to dieters. Arbors' approach is best referred to as ________ segmentation.
psychographic
Perceptual positioning maps
show consumer perceptions of their brands versus those of competing products on important buying dimensions
Services differentiation
speedy, convenient, or careful delivery
Value proposition
the full mix of benefits on which a brand is differentiated and positioned
Market-targeting strategies
undifferentiated (broad), differentiated, concentrated, micromarketing (narrow)
Gender segmentation
used in marketing clothing, toiletries, toys, and magazines
Differentiation and positioning task consists of three steps
1. Identifying a set of differentiating competitive advantages on which to build a position 2. Choosing the right competitive advantages and selecting an overall positioning strategy 3. Effectively communicate and deliver the chosen position to the market
A difference is worth establishing to the extent that it satisfies the following criteria:
1. important 2. distinctive 3. superior 4. communicable 5. preemptive - competitors cannot easily copy the difference 6. affordable 7. profitable