MKTG Chapter 6: Customer Value-Driven Marketing Strategy

What is SoLoMo marketing?

(social+local+mobile) marketing. Tracking consumers closely because of smartphones, etc. and engage them on the go with localized deals and information fast, wherever they may be. (under Local marketing)

What differences should you promote? (7)

-Important -Distinctive -Superior -Preemptive -Communicable -Affordable -Profitable

Definition of Differentiation

Actually differentiating the market offering to create superior customer value.

Firms that practice __________ differentiation gain competitive advantage through the way they design their channel's coverage expertise, and performance.

Channel

Competitors' marketing strategies should be considered when?

Choosing the targeting strategy

How does a company decide how to choose a targeting strategy?

Depends on the company's resources

Study Figure 6.1 - page 170

Designing a Customer Value-Driven Market Strategy

How can Business Markets be segmented? 6 regular, 4 additional in italics.

Geographically, demographically (industry, company size), or by benefits sought, user status, usage rate, and loyalty status. Additional variables (in italics): Operating Characteristics, Purchasing Approaches, Situational Factors, and Personal Characteristics.

How can markets be segmented as far as usage rate?

Into light, medium, and heavy product users.

A segment is less/more attractive if it already contains many strong and aggressive Competitors of if it is easy for New Entrants to come into the segment?

Less

Study Table 6.1 - page 171

Major Segmentation Variables for Consumer Markets

What are conceptual positioning maps

Maps that show consumer perceptions of their brands versus those of competing products on important buying dimensions (figure 6.3)

What is another factor that comes into play when choosing the targeting strategy?

Market Variability - ex/ If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate.

What comes after Market Segmentation?

Market targeting

Study Figure 6.2 page 179

Market-Targeting Strategies

How can markets be segmented as far as user status?

Segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product.

Definition of Local marketing

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

Definition of Individual Marketing

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

Definition of Micromarketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes Local Marketing and Individual Marketing (they have definitions too)

True or False? Undifferentiated marketing strategy is where they focus on what is Common in the needs of the consumers, rather than on what is Different.

True

True or false: marketers rarely limit their segmentation to only one or a few variables.

True. Trying to identify smaller, better-defined target groups.

What is a USP?

Unique Selling Proposition: Each company has one and they pick and attribute

Figure 6.2 shows that companies can target very broadly (______________ ______________), very narrowly (_________________), or somewhere in between (________________ or __________________ ________________)

broad - undifferentiated Marketing narrow - micromarketing in between - differentiated or concentrated marketing

In marketing, the issues is not really Who is targeted but rather _____ and for _________.

how; what

In Chapter 5, we discussed how the products people buy reflect their:

lifestyles

The relative ______________ of _____________ affects segment attractiveness

power of buyers

Some companies gain Services Differentiation though:

speedy, convenient service.

The existence of many actual or potential ____________ __________ may limit prices and the profits that can be earned in a segment

substitute products

Definition of 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.

Definition of Differentiated (segmented) marketing)

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each

Definition of Concentrated (Niche) Marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Definition of Target Market

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

Definition of Competitive Advantage

An advantage over competitors gained by offering greater customer value, either by having more befits that justify higher prices

Definition of Positioning

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Marketers sometimes refer to brand-focused psychographic segments as what?

Brand-Tribes: Communities of core customers with shared characteristics, brand experiences, and strong affinities for a particular brand.

Through Product Differentiation:

Brands can be differentiated on features, performance, or style and design

How can markets be segmented as far as consumer loyalty/loyalty status?

Consumers can be loyal to brands, stores, and companies. Buyers can also be divided into groups according to their degree of loyalty. Some consumers are completely loyal - they buy the brand exclusively and can't wait to talk about it.

Definition of Age and Life-Cycle Segmentation

Dividing a market into different age and life-cycle groups

Definition of Geographic Segmentation

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

Definition of Income Segmentation

Dividing a market into different income segments

Definition of Gender Segmentation

Dividing a market into different segments based on gender

Definition of Psychographic Segmentation

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

Definition of Market Segmentation

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

Definition of Behavioral Segmentation

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

Definition of Occasion Segmentation

Dividing the market into segments according to occasions when buyers get the idea to buys, actually make their purchase, or use the purchased item.

Definition of Benefit Segmentation

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

Definition of Demographic Segmentation

Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Definition of Marketing Targeting (targeting)

Evaluating each market segment's attractiveness and selecting one or more segments to serve.

Positioning statement?

Form = To (target segment and need) our (brand) is (concept) that (point of difference).

Definition of Intermarket (cross-market) Segmentation

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

How can World Markets (international markets) be segmented?

Geographic location, economic factors, political and legal factors, and cultural factors. Also, they note that new technologies, such as satellites can connect consumers around the world and marketers can define and reach segments of like-minded consumers no matter where in the world they are. (See Intermarket (cross-market) segmentation definition.

What are the major variables of segmenting consumer markets?

Geographic, demographic, psychographic, and behavioral variables. (Table 6.1)

Definition of Product Position

How a product is Defined by Consumers on important attributes - the place a product occupies in consumers' minds relative to competing products.

What is a value proposition?

How the company will create differentiated value for targeted segments and what positions it wants to occupy in those segments.

Even when competing offers look the same, buyers may perceive a difference based on company or brand:

Image Differentiation

What are the Requirements for Effective Segmentation? (5) Explain them.

Measurable - The size, purchasing power, and profiles of the segments can be measured. Accessible - the market segments can be effectively reached and served. Substantial - the market segments are large or profitable enough to serve .A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than seven feet. Differentiable - The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks, they do not constitutes separate segments. Actionable - Effective programs can be designed for attracting and serving the segments. For example. although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each of the segments.

A segment may e less attractive if it contains __________ ___________ that can control prices or reduce the quality or quantity of ordered goods and services

Powerful Suppliers

What is Mass Customization (under individual marketing)?

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