Marketing Chapter 6

"Same for Less"

Same benefits vs. competitors, but with lower price; gives a good deal, used by discount stores that offer deep discounts based on superior purchasing power and lower-cost operations EX: Up & Up brand by Target; "comparable to tide, lysol, clorox, etc." same product, but cheaper; generic brands

Designing a Customer-Driven Marketing Strategy

Select customers to serve (Segmentation and Targeting), Decide on a value proposition (Differentiation and Positioning) to create value for targeted customers

Positioning statement

Summarizes a company or brand positioning Format: To (target segment and need) our (brand) is (concept) that (point of difference) EX: To (busy multitaskers who need help remembering things, (Evernote) is a (digital content management application) that (makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet and the web) EX: To cultured millennials, Starbucks is a premium coffee house that adds an intimate and valuable experience to a consumer's lifestyle by integrating caffeine with a comfortable environment

Retargeting

Targeting based on previous interactions with specific cookies; site-based, ad-based, email-based EX: you look at a pair of shoes on Zappos, and that ad follows you when you're on other sites; reaching right people who you know are interested in your product --> relevant to viewers; there is a code that links pages to viewers and ads to that page will consistently show up

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 - firms can differentiate in terms of product, services, channels, people or image

Differentiation

differentiate the market offering to create superior customer value

Market Segmentation

divides the total market into smaller segments

Choosing the right competitive advantage..

how many differences to promote? (one USP? more than one differentiator?) Which differences to promote? important (offer highly valued benefit to customer?) distinctive(w/ competitors, can you offer product in a distinctive way?) superior(difference superior to other ways customers can obtain the same "benefit"? communicable(can difference be easily communicated & visible to consumer?) preemptive(is it difficult for competitors to copy your difference?) affordable(consumers afford to pay for the difference?) profitable(able to introduce the difference profitably?)

Contextual Targeting

looks at the category or keywords of the current page a consumer is viewing and then serves them ads that are highly relevant to that content

"More for More" positioning

more benefits vs. competitors (provides the most upscale product or service); priced higher vs. competitors (charges a higher price to cover the higher costs); EX: Northface- people are willing to pay more because they believe the quality is better

"More for less"

more benefits vs. competitors, but lower price; **** best winning proposition****; very difficult for companies to sustain such best-of-both positioning; EX: Nate Berkus-- famous home designer sells his own furniture line

Positioning

position the market offering in the minds of target customers EX: Nike $325 cleats for Pro; $25 for kids

Targeting

select the segment(s) to enter

Markets

set of actual and potential buyers of a product or service-- share a particular want or need that can be satisfied through an exchange relationship

Target market

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

Keyword/Category Contextual Combination

target only pages which contain your selected keywords and have been classified into one of your selected categories. Combination targeting works great for targeting keywords with multiple meanings

Key word contextual targeting

target users viewing content with keywords that have been designated by the advertiser; create your own contextual category by uploading keywords that define the pages where you want your ad to appear

Category Contextual Targeting

target users viewing content within specific categories that have been defined as relevant to what the advertiser offers; target ads on pages that fall into one or more of 300 content categories defined by Internet Advertising Bureau

Interest-based targeting

targeting based on previous browsing activity; pages visited, content viewed, searches, clicks, purchases EX: look up recipe for burrito, go to sports website, ads appear for people who like to cook and sports; like taxidermy but never go to a taxidermy site, those ads won't show up

Perceptual Positioning Maps

visual technique designed to show how the average target market consumer understands the positioning of the competing products in the marketplace ( tool that attempts to map the consumer's perceptions and understandings in a diagram) EX: Cars (cost by luxury and performance); Soft drinks ( Caffeine & sweetness); Energy Drinks (Effective &Coolness & % of marketshare)

Social Responsibility Question..

who decides which target segments are "vulnerable" or "disadvantaged"? Who decides who market offerings are "controversial" or "potentially harmful" consider customer's privacy

Choosing a differentiation and positioning strategy

(Shaped like an arrow) 1. identifying a set of differentiating competitive advantages 2. choosing the right competitive advantages 3. selecting an overall positioning strategy

Behavioral Targeting in Digital Marketing

- Targeting based on content of a specific -Keyword -Keyword/ Category combo -Category Contextual Targeting: Ad targeted to page based on category of the page Keyword Contextual Targeting: Ad displayed on pages containing keywords designated by the advertiser

Communicating and Delivering the Chosen Position

- all the company's marketing mix efforts (4Ps--Product, Price, Promotion,Place) must support the positioning strategy -firm must take care to maintain the position obtained through consistent performance and communication - product's position should be monitored and adapted over time to match changes in consumer needs and competitors' strategies

Consumer and business markets use many of the same variable for segmentation; in addition, business marketer use..

- operating characteristics - purchasing approaches - situational factors - personal characteristics

Segmenting international markets variables includes

-Geographic location -Economic factors -Political and legal factors -cultural factors

Segmentation bases help companies to:

-identify smaller, better-defined target groups - identify and understand key customer segments - reach customers more efficiently by tailoring market offerings and messages to customers' specific needs

Choosing a Targeting Strategy factors to consider:

Company resources, product variability, product's life-cycle stage, market variability, competitors' marketing strategies

Geographic Segmentation

Dividing a market into different geographical units Nations, regions, states, counties, cities, neighborhoods, population density (urban, suburban, rural), climate Designated Marketing Areas (DMAs), Nielsen -> data that shows the number of homes with TV's in a specific area and what % of the US they are; DMAs are used by Nielsen Median Research to identify TV stations that best reach an area and attract the most viewer; DMA regions are the geographic areas in the US in which local television viewing is measured by The Nielsen Company. DMA data is essential for any marketer, researcher, or organization seeking to utilize standardized geographic areas within their business

Demographic Segmentation

Dividing a market into segments based on demographic variables Age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, generation Nielsen--> Geographic&Demographic Segmentation EX: Hispanic or Latino TV Homes in specific cities

Psychographic Segmentation

Dividing a market into segments based on interests, attitudes, and opinions (IAO) Social class, lifestyle, personality Products people buy reflect their lifestyles EX: new mothers, bachelors

Behavioral Segmentation

Dividing a market into segments based on their knowledge, attitudes, uses or responses about a product Occasions: when get the idea to buy, when make their purchase, when use the product Benefits: benefits buyers seek from the product User status: non-users, ex-users, potential users, first-time users Usage rate: Light, medium or heavy Loyalty status: loyalty to brand, store or company

Market Targeting

Evaluating the various segments based on : Segment size & growth, segment attractiveness, & company objectives and resources

Concentrated (niche) marketing

Focuses on going after a large share of one or a few smaller segments (or niches); less expensive, higher risk EX: consultants: specialize in providing advice in an particular area; websites: beauty blogs, tech blogs; retailers: sell range of products you were have trouble buying anywhere else EX: ModCloth

Market Targeting Strategy: Undifferentiated (mass) marketing

Focuses on needs that are COMMON instead of needs that are different; less expensive, potentially ineffective, targeting broadly EX: ICE, GAS

Marketing Targeting Strategy: Differentiated (segmented) marketing

Focuses on several market segments, with a separate offering for each; more effective, relevant; more expensive EX: P&G owns era, tide, dreft, and gain --> within Tide, there are subcategories of bleach, fabric softener, detergent, etc.

Market Targeting Strategies: Micromarketing (local or individual marketing)

Focuses on tailoring products & marketing programs to individual customers; most relevant; most expensive; targeting narrowly EX: Groupon, NIKEiD

Value proposition

Full mix of benefits on which a brand is differentiated and positioned (why should i buy your brand?) Matrix: y-axis = benefits; x-axis= price (More, the same, less) pay more for more benefits, more for same, more for less etc.

Major Segmentation variables for consumer markets

Geographic, Demographic, Psychographic, Behavioral

Intermarket (cross-market) segmentation

Grouping consumers with similar needs and buying behaviors irrespective(regardless) of their location

Multiple Segmentation Bases

Help marketers segment people and locations into marketable groups of like-minded consumers EX: PRIZM Segmentation Demo: information about each county --> income, family size, etc.

"Less for Much Less"

Less benefits vs competitors but lower prices; meeting customers' lower performance or quality requirements at a much lower price EX: Southwest, Frontier, Spirit; LOW TIER AIRLINES. cheap flights but bitchass service

Requirements for Effective Segmentation

Measurable: size& profiles can be measured Accessible: segment can be effectively reached Substantial: Large, profitable enough to serve Differentiable: Distinguishable segments respond differently Actionable: Programs can be developed in to reach segments

"More for the Same"

More benefits vs. competitors but same price as competitors; high quality at lower prices; can be used to attack a more-for-more positioning EX: iPhone- about same cost as Samsung but has features that samsung does not