Chapter 9 BA370 - Segmenting, Targeting and Positioning

Behavioral - segmentation method

forms market segfments based on the way consumers use a product such as more frequently or with greater loyalty two common types are loyalty sergmentation and occassion

STP step 2: use segmentation methods

- Use particular method or combination of methods to segment market - Firms can distinguish customer similarities within a segment and dissimilarities across segments - Use geographic, demographic, psychographic, benefit, and behavioral segmentation geographic: place demographic: age gender income education psychographic: lifestyle/self concept how people self select/identify benefit: convenience, economy, prestige e.g. different movie genres marketed to different people who seek particular benefit behavioral: occasion, loyalty e.g. wedding v prom v work or dividing loyalty; marketing to loyal customers as a segment combination -market basket analysis analyzing types of shoppers : e.g. bargain, family, convenience etc. using data from what consumers buy -geodemographic combo of geography and demographics tapestry - divides into geographic segments and also into lifestyle/characteristics /data from demographics

Positioning Using Perceptual Mapping

A perceptual map displays, in 2 or more dimensions, the position of products or brands in the consumer's mind. -compares two attributes on both axis and the different levels of these attributes -The position of each brand is denoted by a small circle, and the numbered circles denote consumer's ideal points - where a particular market segment's ideal product would lie on the map. The larger the numbered circle, the larger the market size. To derive a perceptual map, marketers follow six steps. 1. determine customer perception and evaluations of the product or service in relation to competitors product service 2.identify the market's ideal points and size 3. identify competitors' positions 4. determine consumer preferences 5. select the position 6. monitor the positioning strategy A perceptual map is used in developing a positioning strategy in order to display the position of the products or brands in the consumer's mind. Size of numbered circle signifies size of target market On a perceptual map, marketers can represent the size of both current and potential markets by using different sized ovals that correspond to the market size. Ideal point - point where market segments desired product would be located on a perceptual map Want to position firm closest to the largest ideal point

Why are successful brands unable to realize enduring success in meeting consumer demands?

Competitors will encroach on the firm's value proposition by copying important product or service attributes.

Which of the following are key factors to keep in mind when marketers focus their assessments on the potential profitability of market segments, both current and future? (Choose every correct answer.) Market access Market competitiveness Market growth Market oriented era

Market access Market competitiveness Market growth

Maintaining a unique value proposition can be sustained long term only in ......

Monopoly or possibly monopolistic competition situations

All steps of the segmentation, targeting positioning process

Step 1: Establish the overall strategy/objectives step 2: use segmentation methods step 3: evaluate segment attractiveness step 4: select target market step 5: identify and develop positioning strategy **only do STP if u have excess demand Situations of low demand - still need to decide to go into the market -no demand -latent demand: we think it's gonna be popular but not yet. -negative demand

Occassion - subset of a segmentation method

a very specific form of behavioral segmentation by which segments are formed based on when a product or service is purchased or consumed. e.g. A clothing company that offers a special line of maternity clothing for women to wear specifically during pregnancy engages in occassion segmentation e.g. Ellie's Deli offers good sandwiches and fast service to its lunchtime customers from a nearby university. It also delivers the same sandwiches packaged with side dishes as part of its catering services. This is an example of occasion segmentation

STP Step 1: Establish the overall strategy/objectives

articulate vision/obj of company - want segmenting strategy to be consistent with this and SWOT analysis.

When marketers combine segmentation methods, which approaches do they typically use to design a product or service? (Choose every correct answer.) benefits lifestyles geogrpahy demographics

benefits lifestyles

Benefit - segmentation method

categorizes consumers on the basis of the outcomes they hope to derive from a product or service.

geodemographic segmentation

combo of geographical and demographic segmentation Foster Designs sells different types of clothing for men and women. To ensure the retail store locations contain the appropriate assortment of clothing for the typical customer living in the area, the firm should use geodemographic segmentation.

STP step 3: evaluate segment attractiveness

identifiable, substantial, reachable, profitable, responsive when marketers seek to evaluate market attractiveness, they must first determine whether the segment is worth pursuing. responsiveness: customers in the segment react similarly and positively to the offering Once a firm is able to identify the market and is able to design products or services to meet its needs, the next step is to determine if the market size is substantial. SWOT analysis is an analytical method firms use to assess the target market and it's own competencies

STP step 5: identify and develop positioning strategy

involves a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products value proposition communicates the customer benefits to be received from a product/reasons it should be purchased the best situation is if a company's product or service offering -overlaps with customer needs and wants but suffers no overlap with competitors offerings key value proposition elements 1. target market 2. offering name or brand 3. product/service category or concept 4. unique point of difference/benefits positioning methods (another card) value, salient, symbolos, compeition positioning involves adjusting the marketing mix to give consumers a clear picture of what a product does in comparison to competing products

Daniel joins a kayaking club. He purchases the necessary equipment, searches online for kayaking videos, and researches local rivers and lakes. He begins to see banner ads for companies that sell kayaking and other outdoor gear. This is an example of ______ segmentation based on his lifestyle.

psychographic

Psychographic - Segmentation method

study how people occupy their time and underlying psychological factors that determine their choices how ppl describe themselves self values: are overriding desires that drive how a person lives their life examples of self values -need for belonging -need for self respect -need for fulfilment -buying things because they are "green" enviroment safe A resort advertisement that contains images of groups of people having fun on the beach or lounging by the pool appeals to which component of psychographics? self concept^^ self concept" is the image people ideally have of themselves A luxury car company that markets its products to consumers who have a strong need to project an image of power and success uses which method of psychographic market segmentation self selecting groups, because ppl are grouped based on factors they choose rather than what they can control

Value proposition

the full positioning of a brand - the full mix of benefits on which it is positioned communicates the customer benefits to be received from a product or service—in other words, why a customer should purchase the product. The elements of developing and communicating a firms value proposition. The main components of this are 1. Target market 2. Offering name or brand 3. Product service category or concept 4. Unique point of difference/benefits

Firms position their products based on methods such as _________.

the value proposition, salient attributes, symbols, and competition

SWOT analysis is used

to asses the target market the firm's own competencies

STP step 4: select target market

undifferentiated strategy -when everyone is a potential user -looking for similarities between consumers -When a firm sells products that meet the needs of many kinds of customers, it will most likely use undifferentiated because there is little to no need to formulate different strategies for different groups differentiated strategy -multiple segments each given different offerings -diversifies business which lowers risk but increases resources used -more expensive e.g. one segment starts consuming less, still have other segments to rely on -helps obtain bigger share of market concentrated -single, primary target market -good for start ups because employs limited resources efficiently -focuses all energy onto single target market and on providing a product to fit that market's needs micromarketing -tailoring to individual -involves customizing a product and is considered an extreme form of segmentation -also known as one to one marketing -e.g. PG markets to those searching for pregnancy information

positioning methods

value proposition, salient attributes, symbols, and competition value: creating value for consumers. different markets/people have different values/types they prefer. all about perspective -best for when consumers are focused on price and quality salient attributes: focuses on the attributes most important to the target market, position accordingly e.g. subaru v audi. audi positions for performance and handling, subaru for safety and handling symbols: well known symbol to be used as a positioning tool. trademarked e.g. nike competition: choosing to position products against specifc competitor/entire product classification.