Principles of Marketing Chapter 7

Undifferentiated (mass) marketing

Virtually no targeting. A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. focuses on what is common in the needs of consumers rather than on what is different. Trouble competing with more-focused firms that do a better job of satisfying the needs of specific segments and niches.

Local marketing

Tailoring brands and promotions to the needs and wants of local customer segments-cities, neighborhoods, and even specific stores ex) Local marketing: The North Face uses "geo-fencing" to send localized text messages to consumers who get near one of its stores. cons) It can drive up manufacturing and marketing costs by reducing the economies of scale

Individual marketing

Tailoring products and marketing programs to the needs and preferences of individual customers-also called one-to-one marketing, customized marketing, and markets-of-one marketing ex) Video screens in malls and stores can now determine who's watching them and change the ads accordingly

Positioning

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

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

1) Market segmentation: What customers will we serve? 2) Market Targeting: Which customers will the company serve? 3) Differentiation and Positioning: How will we serve them?

1) Market segmentation reveals the firm's market segment opportunities. 2) The firm now has to evaluate the various segments and decide how many and which segments it can serve best. How companies evaluate and select target segments. 3)

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

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. ex) P&G markets six different laundry detergent brands in the United States, which compete with each other on supermarket shelves. ex) VF Corporation offers a closet full of over 30 premium lifestyle brands, each of which "taps into consumer aspirations to fashion, status, and well-being" in a well-defined segment.

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 thrives by catering to affluent customers who the Walmarts of the world can't serve well, offer- ing them "organic, natural, and gourmet foods, all swaddled in Earth Day politics."

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. It takes this form: To (target segment and need) our (brand) is (concept) that (point of difference) ex) To busy, mobile profession- als who need to always be in the loop, the BlackBerry is a wire- less connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go."

loyalty status

Consumers can be loyal to brands (Tide), stores (Target), and companies (Apple). Buyers can be divided into groups according to their degree of loyalty.

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. Marketers must be careful to guard against stereotypes when using age and life-cycle segmentation.

Geographic segmentation

Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods ex) Walmart has developed special formats tailored to specific types of geographic locations, from Hispanic-focused Supermercado de Walmart stores to smaller Marketside and Neighborhood Market supermarkets.

Income segmentation

Dividing a market into different income segments.

Gender segmentation

Dividing a market into different segments based on gender. Harley-Davidson has boosted its efforts to move women from the back of the bike onto the rider's seat.

Psychographic segmentation

Dividing a market into different segments based on social class, lifestyle, or personality characteristics. ex. Zipcar as enhancing its customers urban lifestyles and targets accordingly, ex) cruise lines target adventure seekers,

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 with distinct needs, characteristics, or behavior 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) M&Ms runs special ads and packaging for holidays and events such as Easter. ex) Coca-Cola's "Good Morning" campaign attempts to increase Diet Coke consumption by promoting the soft drink as an early morning pick-me-up

Benefit segmentation

Dividing the market into segments according to the different benefits that consumers seek from the product. ex) Champion must target the benefit segment or segments that it can serve best and most profitably, using appeals that match each segment's benefit preferences. 1) "Fit and Polish" consumers seek a balance between function and style—they exercise for results but want to look good doing it. 2) "Serious Sports Competitors" exercise heavily and live in and love their activewear—they seek performance and function. 3) "Value-Seeking Moms" have low sports interest and low activewear involvement—they buy for the family and seek durability and value.

Demographic segmentation

Dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Demographic factors are the most popular bases for segmenting customer groups because 1) consumer needs, wants, and usage rates often vary closely with demographic variables, and 2) demographic variables are easier to measure than most other types of variables.

Intermarket segmentation (cross-market segmentation)

Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries ex) Coca-Cola creates special programs to target teens, core consumers of its soft drinks the world over. ex) Swedish furniture giant IKEA targets the aspiring global middle class—it sells good-quality furniture that ordinary people worldwide can afford

usage rate

Markets can also be segmented into light, medium, and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption

user status

Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product. Marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users.

Value proposition (quality first price after)

The full positioning of a brand-the full mix of benefits on which it is positioned "More-for-more": Not only is the mar- ket offering high in quality, but it also gives prestige to the buyer. It symbolizes status and a loftier lifestyle ex. Four Seasons hotels, Rolex watches, Mercedes automobiles "More for the same": Lexus dealers were providing customers with better sales and service experiences than were Mercedes dealerships. "the same for less": offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations "less for much less": Hotel chains such as Ramada Limited, Holiday Inn Express, and Motel 6 suspend some of these amenities and charge less accordingly "more for less": Home Depot had arguably the best product selection, the best service, and the lowest prices compared to local hardware stores and other home improvement chains

Market targeting (targeting)

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

Product position

The way the product is defined by consumers on important attributes-the place the product occupies in consumers' minds relative to competing products ex) Tide is positioned as a powerful, all-purpose family detergent; ex) Ivory is positioned as the gentle detergent for fine washables and baby clothes.

differentiation (product, service, channel, people, image)

differentiating the market offering to create superior customer value product: brands can be differentiated on features, performance, or style and design service: through speedy, convenient, or careful delivery channel: gain competitive advantage through the way they design their channel's coverage, expertise, and performance. people: hiring and training better people than their competitors do. A company or brand image should convey a product's distinctive benefits and positioning ex) Subway differentiates itself as the healthy fast-food choice. ex) Singapore Airlines sets itself apart through extraordinary customer care and the grace of its flight attendants ex) Amazon.com and GEICO set themselves apart with their smooth-functioning direct channels ex) Disney World people are known to be friendly and up- beat ex) Symbols, such as the McDonald's golden arches