MKT 300 Chapter 9
segment profitability
( segment size x segment adoption % x purchase behavior x profit margin % ) - fixed costs
occasion segmentation
based on when a product is purchased or consumed
differentiated targeting strategy
firm targets several market segments with a different offering for each
undifferentiated targeting strategy
for products providing some benefit for everyone
Step Two
helps firms understand customer profiles in each segment firms can distinguish customer similarities within a segment and differences across segments. methods: geographic, demographic, psychographic, benefits, behavioral
tapestry segmentation considerations
home value, age, education, family type, income, employment
three primary motivations of US consumers
ideals, achievement. and self expression
daniel joined an outdoors activity club. he has begun to purchase many books.
psychographic
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
value proposition key elements
target market offering name/brand product or concept unique part of benefits
Five steps in STP
1. Establish strategy/objectives 2. Use segmentation methods 3. Evaluate segment alternatives 4. Select Target Market 5. Identify and develop positioning strategy
six parts to perceptual mapping
1. determine consumer's perceptions and evaluations of product in relation to competitor 2. identify market's ideal points and size 3. identify competitors positions 4. determine consumer preferences 5. select position 6. monitor position strategy
Step Three
Evaluate segment attractiveness; identifiable, substantial, responsive, reachable, profitable
Step Four
Select target market. marketer's ability to pursue an opportunity/ segment Undifferentiated, differentiated, concentrated, and micromarketing
why might a start-up company benefit from selecting a concentrated targeting strategy?
a concentrated strategy is a more efficient use of limited resources
ideal point
a point where a market segment's desired product would be located on a perceptual map
If a firm positions its product too closely to the competition, they are risking:
a trademark infringement lawsuit
ease of developing channels and brand familiarity is known as market ____________
access
how do firms commonly position themselves in the marketplace when using a competition positioning method?
against a specific competitor, against an entire product classification, and against an entire service classification
changing a products positioning is
always a challenge to do so.
Step One
articulate vision of marketing strategy clearly- must be consistent with firms mission and SWOT
what customers need from a computer and how they expect it to improve their life is an example of __________ segementation
benefit
which of the following are the circles for a successful value proposition?
benefits offered by competitors, the company's offerings, and customer needs and wants
marketers ask consumers a series of questions about competitors products in order to determine the competing products ___________ on consumers perceptual maps
brand positions
example of undifferentiated strategy
companies that sell salt, sugar, or gasoline
"pork. the other white meat." is a positioning strategy that focuses on __________
competition
geographic segmentation
continent/within US. `
marketing positioning
defining the market mix variables so that target customers have a clear distinctive, understanding of what the product does
psychographics
delves into hoe customers describe themselves; allows describing oneself using those characteristics that help them choose how to occupy their time and what underlies
perceptual mapping
displays, in two or more dimensions, the position of products or brands in the consumer's mind
drawback to psychographic segmentation
expensive
foster designs sells diff types of clothes for men and women. to ensure the retail store locations contain the appropriate assortment of clothing for the area, the firm should use _______________ segmentation
geodemographic
behavioral segmentation
groups on basis of how they use product. occasion and loyalty
benefit segmentation
groups on the basis of benefits derived from products or services convenience, economy, prestige
Step Five
identify and develop position strategy. Value proposition elements: target market, offering name/brand, product or concept, and unique point of differences/benefits Positioning methods: value, salient attributes, symbols, and competition perceptual mapping
salient attributes highlights features that are most ______________ to the target market
important
self-values
life goals, component of psychographics referring to overriding desires that drive how a person lives their life. help determines benefits that target market may be looking for from a product!
which of the following is not a factor influencing the profitability of a segment over the lifetime of a typical customer relationship
market growth rate
which of the following are key factors to keep in mind when marketers focus their assessments on the potential profitability of marker segments, both currently and future.
market growth, market access, and market competitiveness
psychographic segmentation
method of segmenting customers based on how they spend their time and money, what activities they do, and their opinions and attitudes about the world we live in lifestyle, self concept, self values
Compared to most available targeting strategies, differentiated targeting is _____.
more expensive
psychographics study how people ______________ their time and the underlying psychological factors that determine their choices
occupy
example of occasion segmentation for a chocolate maker
offers some of its chocolate in heart shaped boxes for valentines day
when using a perceptual map, a company should select a ________ based on the wants of the target market segment
position
A well-known symbol can be used as a ____ tool, distinguishing the brand from its competition.
positioning
which aspect of the STP process involves adjusting the marketing mix to give consumers a clear picture of what a product does in comparison to competing products?
positioning
sometimes, firms find it difficult to use demographics in their segmentation strategies. This is because in some cases demographics _________________
predict consumer wants and needs poorly
Value and Lifestyle Survey (VALS)
psychographic tool that classifies consumers into 8 segments: innovators, thinkers, believers, achievers, strivers, experiencers, makers, or survivors
demographic segmentation
segmenting markets by age, gender, income, ethnic background, and family life cycle
concentrated target strategy
selecting a single, primary target market and focusing all energies on providing a product to fit that market's needs
McDonald's often targets families by showing families having a good time in its advertising. This appeals to a family's:
self-concept
John is a supporter of environmental issues, He is constantly examining the "green" credentials of the products he purchases. John's purchasing behavior is a reflection of his ______.
self-values
because consumers' tastes shift, markets are not _____________ and competitors must therefore _______ those shifts
stagnant; react to
loyalty segmentation
strategy of investing in loyalty initiatives to retain the firm's most profitable customers
Once the firm understands how its competitors' brands are viewed by the consumer, it should next _____.
study how the competitors have positioned themselves
once a firm is able to identify the market and is able to design products to meet its need, the next step is determine if the market size is
substantial
geodemographic segmentation
the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics
self-concept
the image a person has of himself or herself; a component of psychographics
ideal points
the position at which a particular market segment's ideal product would lie on a perceptual map
the best situation for a firm in the circle is
the product overlaps with customer needs but not with competitors offerings
a caribbean resort wishes to identify customers that can afford and have the most interest in taking tropical vacations. using the val framework, the resort can develop a successful advertising campaign based on the ____________ of its target customers
underlying motivations
value proposition
unique value a product provides. benefits both firms provide that customers do not appear to need
even if a firm has developed a product that addresses the needs of a specific, substantial market segement, its efforts will fail if the segment is ___________
unreachable
positioning methods
value salient attributes symbol competition
lifestyle
way person lives his/her life to achieve goals; component of psychographics