Marketing 111 Chapter 6

market segmentation
dividing market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
target marketing
identifying market segments, selecting one or more of them, developing products and marketing programs tailored to them
differentiation
differentiating the market offering to create a superior customer value
segmentation steps
– understand benefits the customers seek
– segment the market and develop prototypical customer profiles based on the customer benefits
– find observable variables (such as demographic characteristics) most likely to discriminate among the benefit segments to identify membership in specific segments
bases for segmentation
– geographic — nation, states, cities
– demographic — gender, income, occupation, relegion, etc.
– psychographic — social class, lifestyle, personal characteristics, etc.
– behavioral — consumer knowledge, attitudes, uses of products, reponses to products
– need based — customers with similar needs and benefits sought by them
requirements for effective segmentation
measureable
accessible
substantial
differentiable
actionable
measureable
size, purchasing power, profiles of segment can be measured
accessible
can be successfully reached and served
substantial
large or profitable enough to serve
differentiable
conceptually distinguishable and respond differently to different marketing mix elements and programs
actionable
effective programs can be designed for attraction and serving segment
major structural factors that affect long-run segment attractiveness
– market growth: size, growth rate, potential
– competitive intensity: less attractive is already contains many strong competitors or if easy for new entrants
– market access: customer familiarity
undifferentiated marketing (mass)
firm goes after whole market, appeal to largest of buyers
differentiated marketing (segmented)
firm targets several segments and designs separate offices for each
concentrated marketing (niche)
goes after large share of one or a few segments and niches
micro-marketing (local/individual)
tailor products and marketing programs to needs and wants of specific individuals and local customers
differences a firm promotes
important
distinctive
superior
communicable
preemptive
affordable
pforitable
segment positioning
for each segment, create value proposition an dproduct price positioning strategy basedon that segments unique customer needs
product positoin
way a product is defined by consumers on important attributes; place product occupies in consumers minds relative to competing products
perceptual maps
present consumer perceptoin of brands versus those of competting brands
preference map
present consumer preferences for brand attitudes along with important buying dimensions
USP
advocates say each brand should pick one attribute compete to be “number one”
ex. walmart =#1 lowert prices