Marketing Chapter 6
Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments
True
Marketers believe that behavior variables are the best starting point for building market segments
True
People in the same demographic group can have very different psychographic characteristics
True
Studying less-loyal customers can help a company detect which brands are most competitive with its own
True
Target Market
a set of buyers sharing common needs or characteristics that the company decides to serve
Differentiation
actually differentiating the market offering to create superior customer value
competitive advantage
advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices
in what specific ways can a company differentiate itself or its market offer ?
along the lines of Product, Services, Channels, People or Image
Positioning
arranging for a market offering to occupy a clear, distinctive & desirable place relative to competing products in the minds of target consumers
markets that use income segmentation
automobiles, clothing, cosmetic, financial services & travel
All companies that use income segmentation target the affluent
False; many retailers successfully target low- to middle income families
What additional variables do business marketers use as compared with consumer marketers?
Operating characteristics, purchasing approaches, situational factors, & personal characteristics
Age is often a poor predictor of a person's life cycle, health, work or family status, needs, & buying power
TRUE
How does a firm achieve a strong market position through concentrated marketing?
b/c of its greater knowledge of consumer needs in the niches it serves & the special reputation it acquires
unique selling proposition (USP)
brand should pick one attribute & tout itself as #1 on that attribute only
product differentiation
brands can be differentiated on features, performance, or style & design
Affordable
buyers can afford to pay for the difference
What is required for developing separate marketing plans for separate segments ?
extra marketing research, forecasting, sales analysis, promotion planning, channel management
services differentiation
firm can differentiate the services that accompany the product; ex: speedy, convenient service
Individual marketing
form of micro marketing; tailoring products & marketing programs to the needs and preferences of individual customers
Intermarket (Cross-market) Segmentation
forming segments of consumers who have similar needs & buying behaviors even though they are located in different countries
channel differentiation
gain competitive advantage throughout the way they design their channel's coverage, expertise, & performance
International marketing variables
geographic location, economic factors, political & legal factors, cultural factors
people differentiation
hiring and training better people than the competing brands do; company must carefully select their customer contact people & train them well
product position
how a product is defined by consumers on important attributes - the place a product occupies in consumer's minds relative to competing products
Concentrated marketing can be highly profitable but....
it involves higher-than-normal risks
2 most common variables used in psychographic segmentation
lifestyle and personality
Concentrated Marketing (Niche Marketing)
market coverage strategy in which a firm goes after a large share of one or a few segments or niches
Substantial
market segments are large or profitable enough to serve. should be the largest possible homogenous group worth pursuing w/ a tailored marketing program
Accessible
market segments can be effectively reached & served
Undifferentiated (Mass) Marketing
market-coverage strategy in which a firm decides to ignore market segment differences & go after the whole market with one offer
Differentiated marketing (segmented marketing)
market-coverage strategy in which a firm decides to target several market segments & designs separate offers for each
Usage Rate
markets can also be segmented into light, medium & heavy product users
User status
markets can be segmented into nonusers, ex-users, potential users, 1st time users, & regular users
What kind of segmentation helps firms build up product usage?
occasion segmentation
Same-for-less
offer many of the same brands but at deep discounts based on superior purchasing power & lower cost operations (walmart)
More-for-less
offering best product selection, best service and lowest prices compared to competitors; difficult to sustain this position bc its cost more to offer more
Other names for individual marketing
one-to-one marketing, mass customization, markets-of-one marketing
Less-for-much less
positioning that involves meeting consumers' lower performance or quality requirements at a much lower price (costco)
More-for-more
positioning that involves providing the most upscale product or service & charging a higher price to cover the higher costs (starbucks)
More-for-Same
positioning the brand as offering more for the same price (target)
Mass customization
process by which firms interact one to one with masses of customers to design products, services, & marketing programs tailor-made to individual needs
differentiated or concentrated marketing is most suited for...?
products that can vary in design; i.e cameras, cars, etc.
what does socially responsible marketing call for ?
segmentation & targeting that serve to just the interests of the company but also the interests of those targeted
Loyalty Status
segmented by consumer loyalty; consumers can be loyal to brands, stores & companies
what are the 4 important topics of segmentation?
segmenting consumer markets, segmenting business markets, segmenting international markets, & requirements for effective segmentation
Differentiable
segments are conceptually distinguishable & respond differently to different marketing mix elements & programs
perceptual positioning map
show consumer perceptions of their brands versus those of competing products on important buying dimensions
Measurable
size, purchasing power, & profiles of the segments can be measured
SoLoMo Marketing
social + local + mobile marketing; using geo location tech to track customer whereabouts and engage them on the go with localized deals and info
positioning statement
statement that summarizes company or brand positioning
Micromarketing
tailoring products & marketing programs to the needs and wants of specific individuals and local customer segments; includes local marketing & individual marketing
What is the goal of the final 2 steps? (Differentiation & Positioning)
the company decides on a value proposition; how it will create value for target customers
What is the goal of the 1st 2 steps of designing a customer value driven marketing strategy? (Segmentation & targeting)
the company selects the customers that it will serve & identifies different ways to segment the market & develop profiles of the resulting market segments
when choosing a targeting strategy, you should consider ?
the company's resources, degrees of product variability, product's life-cycle stage, market variability, and competitors' marketing strategy
value proposition
the full positioning of a brand - the full mix of benefits on which it is differentiated & positioned
Niching lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger companies
true
Local marketing
type of micro marketing; tailoring brands and promotions to the needs and wants of local customer segments - cities, neighborhoods, & even specific stores
undifferentiated marketing is most suited for.....?
uniform products
Multiple segmentation bases
use multiple segmentation bases in an effort to identify smaller, better-defined target groups
What does mass marketing focus on?
what is common in the needs of consumers rather than what is different
Communicable
difference is communicable & visible to buyers
What are 2 reasons that demographic segmenting is most popular for segmenting customer groups?
- consumer needs/wants/usage rates often vary closely with demographic variables - demographic variables are easier to measure than most other types
What is required for benefit segmentation?
-find the major benefits people look for in a product class -find the kinds of people that look for each benefit -find major brands that deliver each benefit
what are the 3 steps of the differentiation & positioning task ?
-identifying a set of differentiating competitive advantages on which to build a position -choosing the right competitive advantages -selecting an overall positioning strategy
what are the goals in regards to user status?
-reinforce & retain regular users -attract targeted non-users -reinvigorate relationships w/ ex-users
What 3 factors are needed to evaluate market segments?
-segment size & growth -segment structural attractiveness -company objectives & resources
Superior
difference is superior to other ways that customers might obtain the same benefit
What are the most popular bases for segmenting customer groups?
Demographic factors
Marketers rarely use more than one variable in their segmentation analysis
False
variables used to segment a consumer market
Geographic, Demographic, Psychographic, & Behavioral
A difference is worth establishing to the extent that it satisfies what criteria?
Important, Distinctive, Superior, Communicable, Preemptive, Affordable, Profitable
What are the 4 major steps in designing a customer-value driven marketing strategy ?
Market segmentation, market targeting, differentiation, & positioning
What are the requirements for effective segmentation?
Measurable, Accessible, Substantial, Differentiable, Actionable
what is the form that a positioning statement should use ?
To (target segment & need) our (brand) is (concept) that (point of difference)
What are drawbacks to local marketing ?
can drive up manufacturing & marketing costs by reducing the economies of scale; can create logistics problems as companies try to meet varied requirements of different local markets
how is responsible children advertising encouraged?
children's advertising review unit; published extensive children's advertising guidelines that recognizes the special needs of child audiences
What markets most often use gender segmentation?
clothing, cosmetics, toiletries, toys & magazines
Profitable
company can introduce the difference profitably
image differentiation
company or brand image should convey a product's distinctive benefits & positioning
Preemptive
competitors cannot easily copy the difference
Distinctive
competitors do not offer the difference, or the company can offer it in a more distinctive way
What factors affect segment attractiveness ?
competitors, new entrants, substitute products, power of buyers, powerful suppliers
which marketing strategy is best for when a firm's resources are limited ?
concentrated marketing
Important
difference delivers a highly valued benefit to target buyers
Geographic Segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
Income segmentation
dividing a market into different income segments
Market Segmentation
dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors & who might require separate marketing strategies or mixes
Age and Life-cycle segmentation
dividing in different age or life-cycle groups
Gender segmentation
dividing market into different segments based on gender
Psychographic Segmentation
dividing market into different segments based on social class, lifestyle, or personality characteristics
Behavioral Segmentation
dividing market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product
Occasion segmentation
dividing the market into segments according to occasions when buyers get the idea to buy, actually make the purchase or use purchases item
Benefit Segmentation
dividing the market into segments according to the different benefits that consumers seek from a product
Demographic Segmentation
dividing the market into segments based on variable such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, & generation
Actionable
effective programs can be designed for attracting & serving the segments
Market Targeting
evaluating each market segments attractiveness & selecting one or more segments to serve