Principals Marketing Chapter 4
Clustering techniques
approaches used to try to find similar patterns within sets of data.
Combined target market approach
combining two or more submarkets into one larger target market as a basis for one strategy.
positioning statement
concisely identifies the firm's desired target market, product type, primary benefits or point of differentiation and the main reasons a buyer should believe the firm's claims.
What are the three approaches to market-oriented market planning?
single market market approach multiple target market approach combined target market approach
Who do they call the segmenters?
single target market approach and multiple target market approach
Who is the combiner?
combined target market approach
Positioning
an approach that refers to how customers think about proposed and/or present brands in a market.
buyer personas
fictional depictions of customers illustrative of each target segment
Name the two step process of market segmentation
(1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.
Multiple-product strategies
(Differentiated Marketing) - Selling multiple versions of a product to different market segments.
Customer relationship management (CRM)
an approach in which a seller fine-tunes the marketing effort with information from a customer database.
What are the steps in the market segment process
1.Analyze Customer-Product Relationships - Marketers combine existing knowledge with marketing research to analyze relationship between customers and goods/services offered. 2Investigate Segmentation Bases - Marketers should rely upon research findings, experience, and intuition to decide which bases are likely to result in meaningful segments. 3. Develop Product Positioning - This involves creating a favorable perception of the product in comparison to other alternatives. Types of positioning include: by competitors, by attribute, by use or application, by user or by product class. Positioning maps - tool for representing consumer perceptions of various brands relative to one another 4.Select a Segmentation Strategy - should examine the following criteria when selecting a target market:
Loyalty status
Brand loyalty, the consistency with which a consumer continues to buy the same brand of a particular product.
Psychographic segmentation
Segmentation based on consumers' activities, interests, and opinions.
Geographic Segmentation
Dividing the total market into groups according to location.
Name the positioning statement
For (our target market), (our brand), of all (product type) delivers (key benefits or point of differentiation) because (our brand) is (reasons to believe).
Give an example of when it would be appropriate to use each of the following types of segmentation when marketing to organizational buyers.
Geographic segmentation - A company would want to target an are with high growth rates, or where climate or population creates a demand for a particular type of product. For instance, a company that manufactures golf clubs might target areas such as Florida where many golfers and golf courses are located. Customer-type segmentation - Different types of customers want different types of goods and services. In addition, different kinds of users within organizations have different needs and preferences. For instance, a company that sells rebuilt office equipment such as photocopiers and FAX machines will want to segment its market by the types of machines its customers are likely to want or need. The firm could further segment the market into potential volume segments. The firm could target its marketing mix toward higher-end machines and more profitable customers. Segmentation by buyer behavior - The way customers use the product is a basis for segmenting organizational markets. For instance, an auto manufacturer that produces a van like the Chevy Econoline, which is used by many types of small businesses, would want to know how its customers are using the van; for delivery of pizza or flowers, to carry carpentry and construction tools, to carry appliance repair equipment.
what are two examples of single-product strategies and define them.
Mass marketing (Undifferentiated Marketing)- Selling a single product line to all customers with a single marketing mix. Niche marketing - Tailoring the elements of the marketing mix to attract a single market segment.
State the steps to find a relevant segmenting dimension
all potential dimension qualifying dimensions determining dimensions (product type) determining dimensions (brand specific)
What are the three conditions under which mass marketing would be a viable choice for marketers?
Mass marketing would be a viable choice for marketers when: (1) the total market is too small to divide into segments; (2) there are so many heavy users that they are the only group worth targeting; (3) the brand already has such a large share of the market that targeting specific segments would not be economical.
should examine the following criteria when selecting a target market:
Measurability of the segment - Marketers must be able to measure size and characteristics. Size of the segment - A bigger market might be more attractive than a smaller market. Marketers need to determine each segments market potential i.e., the total purchases expected during a time period given a specific level of marketing activity. Expected growth of the segment - Entering a small but growing market provides the opportunity to build brand loyalty. Competition in the segment - Must consider if market is saturated. Cost of reaching the segment - Some markets are difficult to reach at a reasonable cost. Organizational objectives, resources, and strengths - Should target a market only if doing so is compatible with the organization's objectives and available resources.
Name the 3 types of geographic segmentation
Metropolitan Statistical Area (MSA) - An urbanized area of at least 50,000 people, encircled by nonmetropolitan counties. Primary Metropolitan Area (PMSA) - An MSA with at least one million people. Consolidated Metropolitan Statistical Area (CMSA) - A metropolitan area made up of two or more PMSAs.
What is psychographic segmentation? How do marketers apply psychographic segmentation to a given situation?
Psychographic segmentation is based on customers' lifestyles. To use psychographic segmentation, marketers can link lifestyles data with geographic and demographic information to identify the consumers they wish to target. Then they offer targeted consumers a marketing mix designed to appeal to their lifestyle.
What are five examples of demographic segmentations?
Segmentation by gender - appropriate when a product is more likely to appeal more to one gender than to the other. Segmentation by age - People's needs and tastes change as they grow older. Segmentation by race or ethnicity - African-Americans, Hispanics, and Asian-Americans are ethnic groups commonly identified by U.S. marketers as having distinct tastes, values, needs. Segmentation by socioeconomic status - Segmenting by income helps marketers determine which consumers are likely to respond to a particular combination of price, style, and quality. Segmentation by family types - Can segment according to family size, composition, and stage of family life cycle.
Benefit segmentation
Segmenting a market according to desired benefits.
Segmentation Based on Thoughts and Feelings
Segmenting a market according to what consumers think and feel about a product, brand, and their value.
Segmenting Based on Purchase Behavior
Segmenting consumer markets in terms of various purchase behaviors.
In what ways might auto manufacturers begin to use individual marketing to create value for consumers?
The advances in technology has enabled auto manufacturers to customize cars to a greater degree, perhaps pulling elements form different models to create individual cars. Perhaps eventually there will be no "models" at all. Also, financing, repairs, and other services could be customized to create greater value. Toyota and other companies already build vehicles with a given set of features for individual customers.
What is Market Segmentation
The process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Organization use segmentation to find which categories of individuals or organizations are most likely to be interested in company products.
Segmenting
an aggregating process that clusters people with similar needs into a market segment.
A neighborhood movie theater has four screens. How could this theater use a strategy of differentiated marketing?
The theater could segment its four mini-theaters by age (preserving one for children); gender (showing an action film alongside a love story); race or ethnicity (if the theater is located in an Hispanic or Asian neighborhood, by showing films on subjects related to those groups or recorded in those languages); family composition (by showing at least one "family" film; and socioeconomic status (by showing films on the different screens that appeal to the working class, upper middle class, etc.)
Usage rate
Those who purchase a product are those who have purchased the same or a similar product in the past.
User status
Whether they have used the product in the past, use it currently, are likely to use it in the future or do not use the product.
Generic market
a market with broadly similar needs—and sellers offering various and often diverse ways of satisfying those needs.
Product-market
a market with very similar needs—and sellers offering various close substitute ways of satisfying those needs.
Market segment
a relatively homogeneous group of customers who will respond to a marketing mix in a similar way.
segmenting markets to selecting target market and develop marketing mix can also be called
aggregating
Segmenters
aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.
Name the possible dimensions for segmenting consumer markets
behavioral segmenting geographic segmenting demographic segmenting
market
buyers and seller with needs and desires with the ability and willingness to pay
What are some computer-aided methods that are used in segmenting?
clustering is done with computers the computer searches all the data for homogenous groups of people marketers then study the dimensions of the people in the groups to see why the computer clustered them together. Analytic software aids in identifying customer segments, so that each can be delivered to a different marketing mix.
What is the difference between combiners and segmenters
combiners make compromises and segmenters fine tune their product
What makes up a generic market
customer needs customer type geographic area
What makes up a product market?
customer needs customer type geographic area product type
perceptual mapping
details of positioning
naming broad product market can also be called
disaggregating
Charactaristics of a Good Target Market
homogenous within hetergenous between substantial operational
What is the balancing point?
profit
What does the positioning statement do?
provides direction for marketing strategy
What does entering a small growing market provide?
provides the opportunity to build brand loyalty.
Multiple target market approach
segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix.
Single target market approach
segmenting the market and picking one of the homogeneous segments as the firm's target market.
Determining Dimensions
the dimensions that actually affect the customer's purchase of a specific product or brand in a product-market.
Qualifying Dimensions
the dimensions that are relevant to including a customer type in a product-market.
Combiners
try to increase the size of their target markets by combining two or more segments.
How is market segmentation different from the naming?
you're looking for similarities in segmentation vs differences