Marketing Chapter 6: Segmenting Consumer Markets/Business Markets, Market Targeting Strategy, The Positioning Process

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Market Segmentation
dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.
Market Targeting
evaluating each marketing segment's attractiveness and selecting one or more segments to serve.
Differentiation
actually differentiating the market offering to create superior customer value
Positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
customer-value driven marketing strategy
to build the right relationships with the right customers
major segmentation of consumer marketing
-geographic segmentation
-demographic segmentation
-psychographic segmentation
-behavioral segmentation
geographic segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
demographic segmentation
dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.
age and life-cycle segmentation (demographic segmentation)
dividing a market into different age and life-cycle groups
gender segmentation (demographic segmentation)
dividing a market into different segments based on gender
income segmentation (demographic segmentation)
dividing a market into different income segments
psychographic segmentation
dividing a market into different segments based on social class, lifestyle, or personality characteristics.
behavioral segmentation
dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product.
occasion segmentation (behavioral 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.
benefit segmentation (behavioral segmentation)
dividing the market into segments according to the different benefits that consumers seek from the product.
user status (behavioral segmentation)
markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users.
usage rate (behavioral segmentation)
markets can also be segmented in light, medium, and heavy product users.
loyalty status (behavioral segmentation)
market can also be segmented by consumer loyalty.
using multiple segmentation bases
-marketers rarely limit their segmentation analysis to only one or a few variables.
- rather, they often use multiple segmentation bases in an effort to identify smaller, better-defined target groups.
segmenting business markets
consumer and business markets use many of the same variables to segment their markets: geographically, demographically, or by benefits: sought, user status, usage rate, and loyalty status
additional variables
operating characteristics, purchasing approaches, situational factors, and personal characteristics
intermarket (cross-market) segmentation
forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.
effective segmentation
to be useful, market segments must be:
measurable, accessible, substantial, differentiable, actionable
business marketers use:
operating characteristics size, sales, number of employees, number of locations, purchasing policies, situational factors, personal characteristics
segmenting international markets
geographic location, economic factors (income), political and legal factors (type of govt.)
target market
a set of buyers sharing common needs or characteristics that the company decides to service
targeting
the process of evaluating segments attractiveness based on certain criteria
in evaluating different market segments, a firm must look at:
-segment size and growth
-segment structural attractiveness
-company objectives and resources
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.
concentrated (niche) marketing
a market coverage strategy in which a firm goes after a large share of one or a few segments or niches
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
local marketing
tailoring brands and marketing to the needs and wants of local customer segments- cities, neighborhoods, and even specific stores.
individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers.
choosing a targeting strategy
• Company resources e.g. when limited (concentrated)
• Product's life-cycle stage e.g. new product in one version (undifferentiated)
-Competitors' marketing strategies and expected response
-market variability
• Market variability
- especially in services businesses; number and
strength of competitors, ease of entry into segment, current Company position within segment.
differentiation
product feature, price, services, people, channel or image
(Identifying a set of differentiating competitive advantages on which to
build a position)
product position
how a product is defined by a consumers on important attributes-the place a product occupies in consumers minds relative to competing products
positioning
a strategy to influence how your target consumer will
perceive your product or service in comparison with competitors
competitive advantage
An advantage over competitors gained by offering greater customer value.
Many sources of CA. E.g. by having lower prices, unique desired product
feature, or providing more benefits that justify higher prices
Value proposition
The full positioning of a brand — the full mix of benefits on which it is positioned - gives customers a reason to buy.
winning value propositions
more for more, more for the same, the same for less, less for much less, more for less
positioning statement
-A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference)
-All the company's marketing mix efforts must support the chosen positioning strategy
managing brands
-Communicate the brand's
positioning
• Manage all brand touch points
• Train employees to live the brand
• Audit the brands' strengths and
weaknesses
brand
a name, term, sign, symbol,
design, or a combination of these that
identifies the maker or seller of a product
or service.