Marketing, Kerin Chapter 9

80/20 Rule
a concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of it’s customers
Market-Product Grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization
Market Segmentation
involves aggregating prospective buyers into groups, or segments, that 1) have common needs and 2) will respond similarly to a marketing action
Market Segments
the relatively homogeneous groups of prospective buyers that result from the market segmentation process
Perceptual map
a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand to develop marketing actions to move its product or brand to an ideal position
Product Differentiation
a marketing strategy that involves a firm using different marketing mix activities to help consumers perceive the product as being different and better than competing products
Product Positioning
the place a product occupies in consumer’s minds on important attributes relative to competitive products
Product Re-positioning
changing the place a product occupies in a consumer’s mind relative to competitive products
Usage Rate
the quantity consumed or patronage (store visits) during a specific period
Effective Market Segmentation (2 Things)
1) forms meaningful groupings and 2) develops specific marketing mix actions
3 Segmentation Strategies
1) one product and multiple market segments, 2) multiple products and multiple market segments, and 3) “segments of one” or mass customization
1 Product and Multiple Market Segments
When an organization produces only a single product or service and attempts to sell it to two or more market segments
Segments of One: Mass Customization
tailoring goods ro services to the tastes of individual customers on a high-volume scale
5 essential criterias to meet segments of a market
1) Simplicity and cost-effectiveness of assigning potential buyers to segments, 2) potential for increased profit, 3) Similarity of needs of potential buyers within a segment, 4) difference of needs of buyers among segments, and 5) potential of a marketing action to reach a segment
4 Segmentation bases
Geographic, demographic, psychographic, behavioral
Geographic Segmentation
which is based on where prospective customers live or work
demographic segmentation
based on some objective physical, measurable, or other classification attribute of prospective customers
Psychographic segmentation
based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers
Behavioral Segmentation
based on some observable actions or attitudes by prospective customers