Chp. 8

The positioning task consists of three steps:

1.Identifying a set of possible competitive advantages on which to build a position 2.Selecting the right competitive advantages 3.Effectively communicating and delivering the chosen position to a carefully selected target market

income segmentation

Dividing a market into different income groups

competitors' strategies

When competitors use segmentation, undifferentiated marketing can be suicidal. Conversely, when competitors use undifferentiated marketing, a firm can gain an advantage by using differentiated or concentrated marketing.

SoLoMo (Social Local Mobile)

marketing that targets on-the-go consumers as they come and go in key local market areas

local marketing

tailoring brands and promotions to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores

value proposition

the full mix of benefits upon which a brand is differentiated and positioned

micromarketing

the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations

degree of product homogeneity

Undifferentiated marketing is more suited for homogeneous products. Products that can vary in design, such as restaurants and hotels, are more suited to differentiation or concentration.

competititve advantage

an advantage over competitors gained by offering consumers greater value either through lower prices or by providing more benefits that justify higher prices.

market positioning

developing competitive positioning for the product and an appropriate marketing mix

geographic segmentation

dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods

psychographic segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics •People in the same demographic group can have very different psychographic characteristics

behavioral segmentation

dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

market segmentation

dividing a market into smaller segments of buyers who might require separate products and/or marketing mixes •Buyers in any market have unique needs and wants. •Buyers differ in their wants, resources, locations, buying attitudes, and buying practices.

demographic segmentation

dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality the most popular bases for segmenting customer groups

market targeting

evaluating each market segment's attractiveness and selecting one or more segments to enter Market segmentation reveals a company's market-segment opportunities. The firm has to evaluate the various segments and decide how many and which ones to target.

market homogeneity

if buyers have the same tastes, buy a product in the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate

Marketers often use __________ segmentation bases in an effort to identify smaller, better-defined target groups

multiple

behavioral segmentation variables

occasions, benefits, user status, attitude toward the product, user rates, loyalty status, readiness stage

specific product attributes

price and product features can be used to position a product

undifferentiated marketing

•A company ignores market segmentation differences and goes after the entire market with one market offer •Focuses on what is common in the needs of consumers rather than on differences •Provides cost economies •Most contemporary marketers have strong doubts about the strategy in today's competitive environment •It is difficult to develop a product and brand that will satisfy all or even most consumers

Differentiated Marketing

•A company targets several market segments and designs separate offers for each •Differentiated marketing typically produces more total sales than undifferentiated marketing

Differentiating competitive advantages

•A hospitality company or a visitor destination must differentiate its products/services from those of competitors •Companies can gain a strong competitive advantage through physical attributes, service, personnel, location, or image.

positioning errors

•As companies increase the number of claims for their brands, they risk disbelief and a loss of clear positioning 1. Underpositioning: Failing ever to position the company at all 2. Overpositioning: Giving buyers too narrow a picture of the company 3. Confused positioning: Leaving buyers with a confused image of a company

markets

•Companies realize that they cannot appeal to all customers in the marketplace or at least all customers the same way. •Most companies have moved away from mass marketing and toward target marketing •Identifying market segments, selecting one or more of them, and developing products and market programs tailored to each

Differentiation

•Each difference has the potential to create company costs as well as customer benefits. Therefore, a hospitality company or a destination must carefully select the ways in which it will distinguish itself from competitors. •A difference is worth establishing to the extent that it satisfies the following criteria: •Important •Distinctive •Superior •Communicable •Preemptive •Affordable •Profitable

Concentrated Marketing

•Especially appeals to companies with limited resources •Instead of going for a small share of a large market, the firm pursues a large share of one or a few small markets.

Requirements for Effective Segmentation

•Measurability:The degree to which the segment's size and purchasing power can be measured •Accessibility:The degree to which segments can be assessed and served •Substantiality:The degree to which segments are large or profitable enough to serve as markets •Actionability:The degree to which effective programs can be designed for attracting and serving segments

market positioning

•Once a company has chosen its target market segments, it must decide on a value proposition -how it will create differentiated value for targeted markets and what positions to occupy in those segments. •A product's position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers'minds relative to competing products •Marketers plan positions that will give their products the greatest advantage in selected target markets and then design marketing mixes to create the planned positions.

positioning strategies

•Position products based on specific product attributes •Products can be positioned against another product class.

Micromarketing

•Practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. •Local marketing: tailoring brands and promotions to the needs and wants of local customer groups. •SoLoMo(social + local + mobile)

Evaluating Market Segments

•Segment Size and Growth:A company must first collect and analyze data on current segment sales growth rates and expected profitability for various segments •Segment Structural Attractiveness: A segment might have desirable size and growth and still not offer attractive profits;The company must examine several major structural factors that affect long-run segment attractiveness •Company Objectives and Resources:All companies must consider their own objectives and resources in relation to available segments; Some attractive segments can be dismissed quickly because they do not match with the company's long-run objectives