Market segmentation
According to the American Marketing Association (AMA) marketing is
"The function that links the consumer, customer, and public to the marketer through information."
How is geographic segmentation used internationally?
By regions such as Africa, the Middle East, and Western Europe. Consider the infrastructure of the country such as roads, sewage treatment, and electricity
What makes a segment accessible?
Can you reach consumers in that segment at an affordable cost, given the strengths and abilities or your marketing department?
Concentrated marketing (niche marketing)
Channeling all marketing efforts towards that specific segment with the aim of "owning" it over its competitors and creating strong brand loyalty
Who are the innovators?
Characterized by high income and high resources
What is step 5 of the marketing research plan
Collect data
Survey or questionnaire
Combining a variety of questions on one instrument
Ethnographic
Conducted by observing peoples natural behavior
What is behavioral segmentation
Considers the behavior of customers towards a company's products or services
Who are the thinkers?
Consumers who have resources and are motivated by their knowledge
Who are the believers
Consumers who look to their peers for affirmation of their decision
What is Gertrude Hofstede's, Cultural Dimensions?
A study of IBM employees in over 50 countries and identified 5 dimensions that could be used to distinguish one culture from another
Syndicated data
A type of external secondary data that is available through subscription services and is utilized by many marketers
A Perceptual map
A visual diagram that shows how the average target market consumers perceives your products vs. those of your competitors
What is the acronym for the essential factors in effective and successful market segmentation?
ADAMS; Accessible, Differentiable, Actionable, measurable, Sustainable
What are the 3 lifestyle dimensions, commonly called AIO
Activities, interests, and opinions
One-on-one interviews
Allow the research to ask specific questions that match the responders unique perspectives and well as follow-up questions that piggyback on responses already completed
Personal observation
An individual watches and record the activities of the target population
Secondary data
Any research that was completed for another purpose but can be used to help inform the research process. Ex journal entries, complied company data, and previous collected surveys and focus group data
Differentiation positioning
Attempting to identify new markets and seeking out customers who may be interested in your offerings because of those unique qualities
What is technographic segmentation?
Based on the various hardware and software technologies used by B2B customers
Head-to-head positioning
It involves directly competing with competitors on similar product attributes in the same market
What are the advantages in segmenting international markets?
Marketers have a better understanding of international customers, which may lead them to combine segments across countries or even regions
What is power distance index(PDI)?
Refers to how much power inequality exists within a culture and the degree to which people are accepting of this inequality
What is uncertainty avoidance(UAI)?
Refers to the degree to which a society avoids risks.
What is masculinity/femininity (MAS)?
Refers to the degree to which gender-specific roles are valued in the society
What is individualism vs. collectivism(IDV?)
Refers to whether the culture emphasizes the needs and goals of the group as a whole or whether individual needs are paramount
Exploratory (quantitative) research
Research conducted that is more general to learn more about the industry or market. Ex focus groups, interviews
Who are the achievers
Tend to be high-resource consumers who want to excel, both at the workplace and within their families
Who are the strivers
Tend to be lower-resource consumers
What is behavior segmentation?
The "how" it focuses on which benefits or features of a product or service are most applicable to the customer
What is demographic segmentation?
The "who" marketer will divide the market into smaller groups based off factors such as gender, income, age, educational level, race, religion, ethnicity, occupation or job type, and even family structure
What is psychographic segmentation?
The "why'' which breaks down consumer groups into segments that influence buying behaviors, such as lifestyle, personality variables, and values
Observational research
The collecting of data based on actions taken by those observed
Competitive intelligence
The collection of that information from the marketplace that is related to any of the marketing elements: product, price, place, or promotion
What is needs-based segmentation?
The concept that a marketer should focus limited resources on those customers that need the product and have the ability to purchase it
Big data
The countless number of records that continues in an increasing capacity and at a faster rate
Target market
The group of customers that you want to focus your marketing efforts and resources on
Target audience
The group of customers you expect to actually purchase the product
How is economic segmentation used internationally?
The level of economic development/status and the income levels of the population
Product positioning
The process of deciding and communicating how an organization wants its market to think and feel about a product or service
Market Segmentation
The process of dividing a target market into smaller, more precisely defined groups of consumers or organizations who have common needs.
What makes a segment sustainable?
The product or service can't be too small, this is a waste of resources
What is the STP Model
The segmenting, targeting, and positioning model
Data collection
The systematic gathering of information that addresses the identified problem
How is political and legal segmentation used internationally?
The type and stability of the government, how receptive the government is to foreign firms, monetary regulations, and how complex the bureaucracy of the nation is
Mechanical observations
The use of technology to collect data
Marketing research
The work to gather information and data about customers and marketers
What is the importance of marketing information
This information helps determine a company's strengths and weaknesses while also evaluating the external environments opportunities and threats.
What are determinant attributes used on a perceptual map?
Those attributes that a customer uses in making their purchase decision
Marketing information systems
To collect, analyze, and report interesting findings from internal and external data of the company
What are the 4 generic target marketing strategies?
Undifferentiated marketing, micro marketing, concentrated marketing, differentiated marketing
Primary data
Unique information that is collected by the specific research with the current project in mind. Ex survey, observation, experiment, focus group data
Undifferentiated marketing (mass marketing)
Used when a brand has a product or service that has high market appeal in order to reach as many people as possible
How is cultural segmentation used internationally?
Uses cultural factors such as language, religion, values, and attitudes
What is multi-segment marketing
Using all of them segments or a mix of them
What is the VALS model?
Values, attitudes and lifestyles
What are the 3 v's that describe big data
Volume, velocity, and variety
What are the 5 methods of segmenting B2B markets
Behavioral segmentation, value-based segmentation, needs-based segmentation, firmographics, and technographics
Positioning statements
Briefly describes your brand, product, service, target markets, and tries to clarify why your brand is better than your competitors
What are the challenges of segmenting the B2B markets?
Dealing with highly complex B2B markets, dealing with more rational buyers, and the complexity of B2B products
What is step 1 of a successful marketing research project?
Define the problem- the realization that there is an issue that needs to be addressed
What is step 2 of a successful marketing project?
Develop the research plan- what type of research is necessary to meet the established objectives of the first step?
What are the challenges in segmenting international markets?
Differences in cultural, economic, and political environments. More diversity and significantly larger than the domestic market
What is occasion segmentation?
Divides consumers on the basis of the occasions when they make purchases or plan to buy
What is geographic segmentation?
Dividing the market based on "where" your customers or potential customers live including location, cultural preferences, climate, language, climate or season
What are the methods 4 methods of segmenting international markets?
Geographic, culture, political/legal, and economic segmentation
What are the 4 major types of marketing segments?
Geographic, demographic, behavioral, and psychological segmentation
What is firmographics segmentation
Grouping B2B customers based on shared company attributes such as industry, location, size, legal structure, and performance
What is value based segmentation
Groups customers according to the potential value they may bring to a business
Unobtrusive observation
Happens when those being observed aren't aware that they are being watched
Who are the experiencers
Have relatively high resources and want to experience''being different''
Who are the survivors?
Have the least number of resources and are the least likely to adopt innovative products
What is the STP Model used for?
Helpful in identifying your most valuable customers and developing products and marketing messages that are targeted specifically towards those customers
Differentiated marketing (segmented marketing)
A company identifies several target markets and designs separate, concentrated strategies for each
What makes a segment differentiable?
A market segment should be internally homogeneous(alike), but externally heterogeneous (diverse in character)
Buyer persona
A semi-fictional representation of an ideal customer that helps marketers understand and relate to the target market
Qualitative research
Can be shared through words, descriptions, and open-ended comments
External data
Data that originates from outside the organization; customer service survey, reviews of a competitors website, social media mentions, news articles, journals publications
Descriptive (quantitative) research
Data collected to describe the situation in the market and help define an opinion, attitude, or behavior. Ex surveys
Internal data
Data that already exists in the company's database; logistics, research and development
Qualitative data
Data that can be reduced to number or responses. Ex interviews, case studies, focus groups, diary. Accounts
What is business-to-business (B2B) market segmentation
Focuses on identifying unique market segments based on common characteristics
What is usage-based segmentation
Identifies various segments of users based on how much they use a product
What are the advantages of segmenting the B2B markets?
Improved campaign performance, improved customer loyalty/retention, assistance in product development, and improved profitability
The advantages of market segmentation to the organization
Improved focus on the important customers, improved product development, and improved brand loyalty
Marketing information aka business intelligence, competitive intelligence, or marketing intelligence
Information about the market that helps to identify opportunities in the market
What makes a segment actionable?
Is it practical (or profitable) to execute a marketing strategy aimed at that segment?
What's typically included in the buyer persona?
Name, age, interests, media usage, finances(income), brand affinities(do they like certain brands?)
Usage-based segmentation is divided into what 2 groups?
Non-, light, medium, and heavy product users
Target population
Part of step and similar to a target market. It is the group that comprises the population of interest for the study
What are the 4 dimensions that directly affect marketing?
Power distance index, individualism vs. collectivism, uncertainty avoidance, and masculinity/femininity
What is step 3 of a marketing research plan?
Select the data collection method
What is the Pareto principle in marketing
States that 80% of a company's revenue comes from the top 20% of repeat or loyal customers
Experimental or casual research
Studies that define a cause and effect relationship between two factors
Mailed Survey Pros and Cons
Surveys that are sent to potential responders through a mail service. Convenient and can reach large populations. Can be expensive and has a time delay
Focus groups
Taking the benefits of an interview and applying them to a small group of people
Micro marketing (customized marketing)
Targets a specific group of individuals within a niche market based on specific information that has been collected about them
Who are the makers
Want self-expression, but lack the resources to make that happen, so they tend to be more focused on building a better family than spending money
What makes a segment measurable?
You should be able to accurately estimate the size of the market segment.
