Marketing Chapter 3

Less for much less

a market almost always exists for products that offer less and therefor cost less. Ex) Dollar general, Family dollar

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. Ex) Toyota corporation produces several different brands of cars- from Scion to Toyota to Lexus- each targeting its own segments of car buyers.

Concentrated (niche) marketing

a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches. Ex) Whole Foods Market has about 300 stores and $9 billion in sales, compared with Walmarts 9000 stores and $419 billion in sales. Whole Foods thrives by catering to affluent customers who the Walmarts of the world can't serve well, offering them "organic, natural, and gourmet foods, all swaddled in Earth Day politics. Whole Foods customers are more likely to boycott Walmart than shop there.

Target market

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

Positioning Statement

a statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point at difference).

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. Ex) Staples' research revealed that it should differentiate itself on the basis of "an easier shopping experience," the office supply retailer held back its "Staples: That was easy" marketing campaign for more than a year. First, it remade its stores to actually deliver the promised positioning.

Positioning

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

More for the same

companies can attack a competitor's more-for-more positioning by introducing a brand offering comparable quality at a lower prices. Ex) Lexus

Differentiation

differentiating the market offering to create superior customer value

Age and life cycle segmentation

dividing a market into different age and life-cycle groups. Ex) Kraft promotes JELL-O to children as a fun snack, one that "taught the world to wiggle." For adults, it's a tasty, guilt-free indulgence-- "the most sweet-tooth satisfaction 10 calories can hold."

Income segmentation

dividing a market into different income segments. Ex) dollar general, family dollar, and dollar tree store chains-- successfully target low- and middle-income groups.

Gender segmentation

dividing a market into different segments based on gender. Ex) P&G created Secret, a brand specially formulated for a woman's chemistry, packaged and advertised to reinforce the female image.

Psychographic segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics. Ex) Although car-sharing nicher Zipcar rents cars by the hour or the day, it doesn't see itself as a car-rental company. Instead, it sees itself as enhancing its customers' urban lifestyles and targets accordingly.

Behavioral segmentation

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

Market segmentation

dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes

Occasion 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. Ex) most consumers drink orange juice in the morning but orange growers have promoted drinking orange juice as a cool, healthful refresher at other times of the day.

Benefit segmentation

dividing the market into segments according to the different benefits that consumers seek from the product. Ex) Gillette research revealed four distinct benefit segments of women shavers-- perfect shave seekers (close shave no missed hairs), EZ seekers (fast and convenient shaves), skin pampers (easy on the skin), and pragmatic functionalists (basic shaves at an affordable price)

Intermarket (or cross market) segmentation

forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries. Ex) Lexus targets the world's well-to-do-- the "global elite" segment-- regardless of their country.

More for more

involves providing the most upscale product or service and charging a higher price to cover the higher costs. Ex) four seasons, Mercedes

More for less

of course, the winning value proposition would be to offer this. Very difficult to sustain positioning. Ex) Home depot

Same for less

offering this can be a powerful value proposition—everyone likes good deals. Ex) Best buy, pet smart

Local marketing

tailoring brands and promotions to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores. Ex) New York City drugstore chain Duane Reade adapts its merchandise assortments to individual neighbor hoods. In Manhattan, around Penn Station and the Port Authority, it sells sandwiches and quick lunches to the area's many office workers and commuters. In the Wiliamsburg neighborhood of Brooklyn-- an area short on bars and beer-buying locations-- Duane Reade stores sell an abundance of growlers and six-pack micro-brew beers.

Individual marketing

tailoring products and marketing programs to the needs and preferences of individual customers. Ex) John Deere manufactures seeding equipment that can be configured in more than two million versions to individual customer specifications.

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

the full position of a brand - the full mix or benefits on which it is positioned

Market targeting (targeting)

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

Product position

the way a product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products. Ex) Escalade is positioned on urban luxury, and in its case, "performance" probably means power and safety performance. You'll find no mention of off-road adventuring in an Escalade.

Geographic Segmentation

Divide the market into different nations, regions, states, counties, cities, neighborhoods, population density (urban, suburban, rural), climate. Ex) In Hispanic neighborhoods, Walmart operates Supermercado de Walmart stores, which feature signage product assortments, bilingual staff that are more relevant to local Hispanic customer.

Demographic Segmentation

Divides the market up into segmants based on age, life-cycle stage, gender, income, occupation, education, religion, ethnicity generation.

Requirements for effective segmentation

Measurable(the size), accessible(reached and searched), substantial, differentiable, and actionable