Marketing Chapter 6: Segmenting Consumer Markets/Business Markets, Market Targeting Strategy, The Positioning Process

choosing a targeting strategy

• Company resources e.g. when limited (concentrated) • Product's life-cycle stage e.g. new product in one version (undifferentiated) -Competitors' marketing strategies and expected response -market variability

using multiple segmentation bases

-marketers rarely limit their segmentation analysis to only one or a few variables. - rather, they often use multiple segmentation bases in an effort to identify smaller, better-defined target groups.

competitive advantage

An advantage over competitors gained by offering greater customer value. Many sources of CA. E.g. by having lower prices, unique desired product feature, or providing more benefits that justify higher prices

Market Targeting

evaluating each marketing segment's attractiveness and selecting one or more segments to serve.

Value proposition

The full positioning of a brand — the full mix of benefits on which it is positioned - gives customers a reason to buy.

winning value propositions

more for more, more for the same, the same for less, less for much less, more for less

differentiation

product feature, price, services, people, channel or image (Identifying a set of differentiating competitive advantages on which to build a position)

targeting

the process of evaluating segments attractiveness based on certain criteria

effective segmentation

to be useful, market segments must be: measurable, accessible, substantial, differentiable, actionable

• Market variability

- especially in services businesses; number and strength of competitors, ease of entry into segment, current Company position within segment.

positioning statement

-A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference) -All the company's marketing mix efforts must support the chosen positioning strategy

managing brands

-Communicate the brand's positioning • Manage all brand touch points • Train employees to live the brand • Audit the brands' strengths and weaknesses

major segmentation of consumer marketing

-geographic segmentation -demographic segmentation -psychographic segmentation -behavioral segmentation

Positioning

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

local marketing

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

in evaluating different market segments, a firm must look at:

-segment size and growth -segment structural attractiveness -company objectives and resources

concentrated (niche) marketing

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

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.

brand

a name, term, sign, symbol, design, or a combination of these that identifies the maker or seller of a product or service.

target market

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

positioning

a strategy to influence how your target consumer will perceive your product or service in comparison with competitors

Differentiation

actually differentiating the market offering to create superior customer value

segmenting business markets

consumer and business markets use many of the same variables to segment their markets: geographically, demographically, or by benefits: sought, user status, usage rate, and loyalty status

age and life-cycle segmentation (demographic segmentation)

dividing a market into different age and life-cycle groups

geographic segmentation

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

income segmentation (demographic segmentation)

dividing a market into different income segments

gender segmentation (demographic segmentation)

dividing a market into different segments based on gender

psychographic segmentation

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

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.

behavioral segmentation

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

occasion segmentation (behavioral segmentation)

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

benefit segmentation (behavioral segmentation)

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

demographic segmentation

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

intermarket (cross-market) segmentation

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

segmenting international markets

geographic location, economic factors (income), political and legal factors (type of govt.)

product position

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

loyalty status (behavioral segmentation)

market can also be segmented by consumer loyalty.

usage rate (behavioral segmentation)

markets can also be segmented in light, medium, and heavy product users.

user status (behavioral segmentation)

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

business marketers use:

operating characteristics size, sales, number of employees, number of locations, purchasing policies, situational factors, personal characteristics

additional variables

operating characteristics, purchasing approaches, situational factors, and personal characteristics

individual marketing

tailoring products and marketing programs to the needs and preferences of individual customers.

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

customer-value driven marketing strategy

to build the right relationships with the right customers