Marketing: Real People, Real Choices – Chapter 7

Market fragmentation
The creation of many consumer groups due to a diversity of distinct needs and wants in modern society
Target marketing strategy
Dividing the total market into different segments on the basis of customer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments.
Segmentation
The process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics.
Segmentation variables
Dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences.
Demographics
Statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure
Generational marketing
Marketing to members of a generation, who
tend to share the same outlook and priorities.
Generation X
The group of consumers born between 1965 and 1978.
Baby Boomer
The segment of people born between 1946 and 1964.
Metrosexual
A straight, urban male who is keenly interested in fashion, home design, gourmet cooking, and personal care.
Cultural diversity
A management practice that actively seeks to include people of different sexes, races, ethnic groups, and religions in an organization’s employees, customers, suppliers, and distribution channel partners.
Geodemography
A segmentation technique that combines geography with demographics.
Geocoding
Customizing Web advertising so that people who log on in different places will see ad banners for local businesses.
Psychographics
The use of psychological, sociological, and anthropological factors to construct market segments.
VALS (values and lifestyles)
A psychographic system that divides the entire U.S. population into eight segments.
Behavioral segmentation
A technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service
80/20 rule
A marketing rule of thumb that 20 percent of purchasers account for 80 percent of a product’s
sales.
Long tail
A new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items.
Usage occasions
An indicator used in behavioral market segmentation based on when consumers use a product most.
Targeting
A strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers.
Target market
The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts.
Segment profile
A description of the “typical” customer in a segment
undifferentiated targeting strategy
Appealing to a broad spectrum of people
differentiated targeting strategy
Developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace.
concentrated targeting strategy
Focusing a firm’s efforts on offering one or more products to a single segment
custom marketing strategy
An approach that tailors specific products and the messages about them to individual customers.
mass customization
An approach that modifies a basic good or service to meet the needs of an individual.
Positioning
Develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition.
Repositioning
Redoing a product’s position to respond to marketplace changes.
Retro brand
A once-popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia.
Brand personality
A distinctive image that captures a good’s or service’s character and benefits.
Perceptual map
A technique to visually describe where brands are “located” in consumers’ minds relative to competing brands.
Customer relationship management (CRM)
A systematic tracking of consumers’ preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual’s unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of their marketing program in light of how each customer reacts.
touchpoint
Any point of direct interface between customers and a company (online, by phone, or in person).
Share of customer
The percentage of an individual customer’s purchase of a product that is a single brand.
Lifetime value of a customer
The potential profit a single customer’s purchase
of a firm’s products generates over the customer’s lifetime.
Customer equity
The financial value of a customer relationship throughout the lifetime of the relationship.