MKT 3031: Principles of Marketing: Test 2- Chapter 6

segmentation bases help companies to:

-Identify smaller, better-defined target groups -Identify and understand key customer segments -Reach customers more efficiently by tailoring market offerings and messages to customers' specific needs

undifferentiated (mass)

-Is a single marketing mix directed at the entire market -Should be a homogeneous market (customers have similar product needs)

Evaluating the various segments based on:

-Segment size and growth -Segment structural attractiveness -Company objectives and resources

choosing the right competitive advantage:

-number of differences to promote -criteria of differences to promote

concentrated

-targeting a single market segment using one marketing mix -heterogeneous market (individuals or organizations with diverse needs for products in the same class)

differentiated

-targeting two or more segments with a marketing mix for each -heterogeneous market

Segmentation systems help marketers segment people and locations into ....:

...marketable groups of like-minded consumers

generation X:

49 mill (1965-1976)

baby boomers:

78 million (1946-1964) -account for 25% of US pop and yet 70% of the nations disposable income -oldest are entering retirement -youngest are entering their fifties

Generation Y:

83 million (1977-2000) -Also called Millennials or echo boomers -World filled with technology...it's a way of life!

marketing segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Four major steps in designing a customer-driven marketing strategy

In the first two steps, the company selects the customers that it will serve. Market segmentation involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes. Market targeting consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter. In the final two steps, the company decides on a value proposition. Differentiation involves actually differentiating the firm's market offering to create superior customer value. And Positioning consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

occasion segmentation

Segments divided according to occasions, when the buyers: Get the idea to buy Make their purchase Use the purchased item

positioning statement

Summarizes company or brand positioning Format: To (target segment and need) our (brand) is (concept) that (point of difference).

Choosing a Differentiation and Positioning Strategy

The differentiation and positioning task consists of three steps which are identifying a set of differentiating competitive advantages on which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy Beyond deciding which segments of the market it will target, the company must decide on a value proposition. A product position is the way a product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products. For example, Honest Tea is positioned as "Refreshingly Honest" with "Brewed organic tea leaves. Real ingredients."

market segment

a group of consumers who respond in a similar way to a given set of marketing efforts

target market

a set of buyers sharing common needs or characteristics that the company decides to serve

demographics

aggregate population characteristics examples: age, gender, race, ethnicity, income, education, occupation, family size, family lifecycle, social class

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

Generation Z

born after 2000 -Utter fluency and comfort with digital technologies. -"If they are awake, they are online!"

what is the place where opportunities, core competencies, and strategic windows meet?

competitive advantage

loyalty status

consumers can be loyal to brands, stores, and companies

perceptual map

created by questioning a sample of consumers about their perception of products, brands, and organizations with respect to two or more dimensions

______ provides the foundation, and _______ builds the segment

demographics, psychographics

Values, Attitudes & Lifestyles (VALS)

developed by SRI Consulting Business Intelligence; classifies consumers based on psychological characteristics that are correlated with purchase behavior and key demographics

requirements for effective segmentation: DIFFERENTIABLE

distinguishable

benefit segmentation

dividing the market into segments according to the different benefits that consumers seek from the product

requirements for effective segmentation: ACTIONABLE

effective programs designed to attract

Nielsen PRIZM segmentation tool

helps estimate market demand in specific geographic areas

product positioning

how a product is defined by consumers on important attributes - the place a product occupies in consumers' minds relative to competing products

usage rate

markets can be segmented into light, medium, and heavy product users

products position should be monitored and adapted over time to match changes in consumers _________ and competitors' _________

needs, strategies

firm must take care to maintain the position obtained through consistent _________ and ________.

performance, communication

All of the company's marketing mix efforts must support the ___.

positioning strategy

requirements for effective segmentation: SUBSTANTIAL

profitable enough

requirements for effective segmentation: ACCESSIBLE

reached and served

requirements for effective segmentation: MEASURABLE

size, purchasing power

psychographic segmentation

Marketers segment their markets using variables such as: -Social class -Consumer lifestyles -Consumer personality Products people buy reflect their lifestyles.

user status

Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users.

controversy and concern of target marketing:

Vulnerable or disadvantaged consumers are targeted with controversial or potentially harmful products