Marketing (Chapter 7) Market Segmentation
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
Loyalty status
Behavioral; Consumers can be loyal to brands, stores, and companies. + Heavy Half (20-80) Rule
Socially Responsible Targeting
Marketing can generate controversy and concern with potentially harmful products to those who are vulnerable and disadvantage.
Positioning
Decide on a value proposition; Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Segmentation process
1. Identify the bases for segmentation 2. Develop a profile for each segments (behavioral analysis) measurable & quantifiable + Demographics and lifestyle + Media behavior- Accessible & targetable + Purchase behavior 3. Evaluate the potential of each segment (Economic Analysis) - Sufficient + Estimate the size, growth, education, occupation, income, and purchasing power 4. Select a segment + Compatibility with the company's mission and philosophy- compatible + Socially responsible targeting 5. Develop a differentiation and positioning strategy + To project a distinctive image of a product in consumers' minds
Differentiation
Decide on a value proposition; Differentiating the market offering to create superior customer value
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
Differentiated (segmented marketing)
A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
Concentrated (niche marketing)
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
Lifestyle
A pattern of life in which people live and spend time and resources, which is expressed through hence measured by their AIO
Benefit sought
Behavioral; Based on the inherent product benefits and attributes that consumers seek Ex. Automobile segments; Toothpaste segments
Usage rate
Behavioral; Market can be segmented into light, medium, and heavy product users.
Usage status
Behavioral; Markets can be segmented into nonusers, ex-users, potential users, first time users, regular users of a product.
Occasions
Behavioral; Segmenting consumers' life space based on important life events and seasons
PRIZM
Classifies every American household based on host of demographic factors-- such as age, occupation, education level, income,family composition, ethnicity, and housing. Also based on behavioral and lifestyle factors-- such as purchases, free-time activities, and media preferences. + Helps marketers segment people
Actionable
Criteria for selecting a target segment; Effective programs can be designed for attracting and serving the segments.
Sufficient (substantial)
Criteria for selecting a target segment; The market segment are large or profitable enough to serve. A segment should be the largest homogenous group worth pursuing a tailored marketing program
Accessible
Criteria for selecting a target segment; The market segments can be effectively reached and served
Differentiable
Criteria for selecting a target segment; The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs
Measurable
Criteria for selecting a target segment; The size, purchasing power, and profiles of the segment can be measured
Geographic segment
Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
Psychographic (lifestyle) segmentation
Dividing a market into different segments based on social class, lifestyle, or personality characteristics + To reveal different needs, motives, perceptions, and values of similar demographics- a holistic description of consumers
Behavioral segmentation
Dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product; NOT on the consumer characteristics
Demographic segment
Dividing the market into segments based on variables such as age, life-cycle stages, gender, income, occupation, education, religion, ethnicity, and generation
Local marketing
Part of micromarketing; Tailoring brands and marketing to the need and wants of local customer segments-- cities, neighborhoods, and even specific stores
Individual marketing
Part of micromarketing; Tailoring products and marketing programs to the needs and preferences of individual customers
Unique Selling Proposition (USP)
Product's unique value for consumers in terms of its distinctive benefit/feature- (Product position)
Market segmentation
Select customers to serve; Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs; To identify different groups of consumers who respond to various marketing stimuli differently; Benefits include: + To enhance the effectiveness of marketing efforts + To be able to deliver maximum satisfaction + To gain better knowledge bout the competition in a segment + To expose a segment who needs are not served or poorly served
Targeting
Select customers to serve; Evaluating each market segment's attractiveness and selecting one or more segments to enter
Micromarketing
Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments.
VALS
Value and Lifestyle (Segmentation) Study; + 8 segments according to Mrimary Motivation & Resources + To better know and understand the consumers and their desires + To know what and how to communicate (e.g., developing messages, communication style, and selecting media) Framework: - High resources + Innovators - Ideals + Thinkers + Believers - Achievement + Achievers + Strivers - Self-expression + Experiencers + Makers - Low resources + Survivors