Chapter 6 Marketing

Differences to promote

1. Distinctive 2. Superior 3. Communicable 4. Preemptive 5. Affordable 6. Profitable

Choosing a differentiation and positioning strategy

1. Identify a set of differentiating competitive advantages on which to build a position 2. Choose the right competitive advantages 3. Select an overall positioning strategy -The company must then effectively communicate and deliver the chosen position to the market

Designing a customer value driven market strategy

4 major steps in designing a customer-driven marketing strategy

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

More-for-the-same positioning

High quality at lower prices -Companies can attack a competitor's more-for-more positioning by introducing a brand offering comparable quality at a lower price

Mass customization

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

________ segmentation factors divide buyers into different groups based on social class, lifestyle, or personality characteristics.

Psychographic

Undifferentiated marketing

Refers to a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer (same offer for mass market, regardless of differences in segments) -Designed for more uniform products

Differentiated marketing

Refers to a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each -Increases cost of doing business

Concentrated marketing

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

Benefit segmentation

Requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit

Which positioning strategy offers value for consumers by providing the same brands as competitors at a lower price?

Same-for-less

Demographic segmentation

Segmenting markets by age, gender, income, ethnic background, and family life cycle (most popular for segmenting customer groups)

User status segmentation

Segments markets into nonusers, ex-users, potential users, first-time users, and regular users of a product

Positioning maps

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

Market-targeting strategies

Shows that companies can target very broadly, very narrowly, or somewhere in between

Local marketing

Tailoring brands and marketing to the needs and wants of local customer segments like cities, neighborhoods, and even specific stores

Individual marketing

Tailoring products and marketing programs to the needs and preferences of individual customers

What can a company detect by looking at customers who are shifting away from its brand?

The company can learn about its marketing weaknesses and take actions to correct them

Substantial

The market segments are large or profitable enough to serve

Accessible

The market segments can be effectively reached and served

Micromarketing

The practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations (rather than seeing a customer in every individual, micromarketers see the individual in every customer)

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

Value proposition

The unique value that a product or service provides to its customers and how it is better than and different from those of competitors (how it will create differentiated value for targeted segments and what positions it wants to occupy in those segments)

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

More-for-less positioning

The winning value proposition; this is a difficult position to sustain (offering more usually costs more, making it difficult to deliver on the "for-less" promise)

Delta, an American video game manufacturer, targets teens between the ages of 13 and 18, providing free game trials and applications. The firm's marketing approach exemplifies ________ segmentation.

age and life-cycle

A market segment is less attractive when ________.

it contains powerful suppliers who can control prices

Benefits sought

A powerful form of segmentation is grouping buyers according to the different benefits that they seek from a product

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)

Best starting point for building market segments

Behavior variables

Loyalty status segmentation

Buyers can be divided into groups according to their degree of loyalty

Target market

Consists of a set of buyers who share common needs or characteristics that a company decides to serve

Market targeting

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

Usage rate segmentation

Dividing a market by the amount of product bought or consumed into light, medium, and heavy product users

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

Gender segmentation

Dividing a market into different segments based on gender

Psychographic segmentation

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

Behavioral segmentation

Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product (many believe these are the best starting points for building market segments)

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

Channel differentiation

Gain competitive advantage through the way they design their channel's coverage, expertise, and performance

Major segmentation variables for consumer markets

Geographic, demographic, psychographic, behavioral

Differentiation

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

Market segmentation

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

More-for-more positioning

Involves providing the most upscale product or service and charging a higher price to cover the higher costs

Actionable

It's possible to develop effective programs to attract and serve the segment

International segmentation

Marketers from segments of consumers who have similar needs and buying behaviors even though they are located in different countries

Less-for-much-less positioning

Meeting consumers' lower performance or quality requirements at a much lower price

Same-for-less positioning

Offer similar products at much reduced prices

What can a company detect by looking at brand's less-loyal buyers?

Which brands are most competitive with its own

Compared with undifferentiated marketing, differentiated marketing is more likely to lead to ________.

higher costs of doing business

A segment that is useful is:

measurable, attainable, substansial, differentiable, actionable.