Principles of Marketing info

Companies must identify the parts of market they can serve best and most profitably.
Companies must design customer-driven marketing strategies that build the right relationships with the right customers.
Companies have moved away from mass marketing to target marketing
Target marketing
defined as identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.
The shotgun approach
defined as when companies scatter their marketing efforts.
the rifle approach
defined as firm focusing on the buyers who have greater interest in the value they create best.
There are four major steps in designing a customer-driven marketing strategy
segmentation, targeting, differentiation, positioning.
The first two steps of designing a customer driven marketing strategy is segmentation and targeting
the company selects the customers that it will serve.
Market Segmentation
defined as involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might requires separate marketing strategies or mixes.
Marketing targeting or targeting
defined as consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter.
The final two steps of designing a customer driven market strategy are differentiation and positioning
the company decides on value proposition, how it will create value for target customers.
Differentiation
defined as involves actually differentiating the firm’s market offering to create superior customer value.
Positioning
defined as consists of arranging for a market offering to occupy a clear distinctive, and desirable place relative to competing products in the minds of target consumers.
Market segmentation
through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.
The four important segmentation topics
segmenting consumer markets, segmenting business markets, segmenting international markets, and the requirements for effective segmentation.
Segmenting consumer markets
A marketer has to try different segmentation variable, alone and in combination, to find the best way to view structure.
The variables that might be used in segmenting consumer markets
major geographic, demographic, psychographic, and behavioral variables.
Geographic segmentation
defined as diving the market into different geographical units, such as nations, regions, states, countries, cities, or even neighborhoods.
examples of geographic is nations, regions, states, countries, cities, neighborhoods, population density(urban, suburban, rural), climate.
examples of demographic is age, life-cycle stage, gender, income, occupation, education, religion, ethnicity generation.
examples of psychographic is social class, lifestyle, personality
examples of behavioral is occasions, benefits, user status, usage rate, loyalty status
Many companies today are localizing their products, services, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods.
Demographic segmentation
defined as it divides the market into segments based on variables such as age, life cycle stage, gender, income, occupation, education, religion ethnicity, and generation.
Demographic factors are the most popular bases for segmenting customer groups.
demographic variables are easier to measure than most other types of variables.
Age and life cycle stage
consumer needs and wants change with age. some companies use age and life cycle segmentation, offering different products or using different marketing approaches for different age and life cycle group.
Age and life cycle segmentation
defined as dividing a market into different age and life cycle groups.
Marketers must be careful to guard against stereotypes when using age and life cycle segmentation.
Gender segmentation
has long been used in marketing clothing, cosmetics, toiletries, toys and magazines.
Gender segmentation
defined as dividing a market into different segments based on gender. For example P&G using secret deodorant specifically targeting woman.
Income segmentation
the marketers of products ad services such as automobile, clothing, cosmetics, financial services, and travel have long used income segmentation.
Income segmentation
defined as dividing a market into different income segmentation.
Psychographic segmentation
is defined as diving buyers into different segments based on social class, lifestyle, or personality characteristics.
People in the same demographics group can have very different psychographic characteristics.
Marketers also use personality variable to segment markets.
For example, different soft drinks target different personalities.
Marketers sometimes refer to brand focused psychographic segments s brand or tribes.
communities of core customers with shared characteristics, brand experiences, and strong affinities for a particular brand. For example outfitter REI’s core customers are passionate about the great outdoors and share tis belief as members of the REI tribe.
Behavioral segmentation
defined as dividing buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.
Many marketers believe that behavior variables are the best starting point for building market segments.
Occasion segmentation
defined as dividing the market into segments according to occasions with buyers get the ide to buy, actually make their purchase, or use the purchased item.
Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchases, or use the purchased items.
Occasion segmentation
can help firms build up product usage.
A powerful form of segmentation is grouping buyers according to the different benefits that they seek from a product.
Benefit segmentation
defined as dividing the market into segments according to the different benefits that consumers seek from the product.
Benefit segmentation requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.
for example. people buying bicycles are looking for any number of benefits, from competitive racing and sports performance to recreation, fitness, touring, transporting, and just plain fun.
user status
marketers can be segmented into nonusers, ex users, potential users, first time users, and regular users of a product.
marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users.
usage rate
marketers can also e segmented into light medium, and heavy product users. heavy users are often a small percentage of the market but account for a high percentage total consumption.
loyalty status
a market can a be segmented by consumer loyalty
Consumers can be loyal to brands like tide, stores like target, and companies like apple
buyers can be divided into groups according to their degree of loyalty.
Some consumers are completely loyal, they buy one brand all the time and cant wait to tell other
using multiple segments bases
markets rarely limit their segmentation analysis for one or a few variables. rather they often use multiple segment 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.
business buyers can be segmented geographically, demographically industry, company size, or by benefits sought, user status, usage rate, and loyalty status.
businesses marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situation factors, and personal chacteristics
segmenting international markets
few companies have either the resource or the will to operate in all, or even most, of the countries that dot the globe.
companies can segment international markets using one or a combination of several variables.
they can segment by geographic location, grouping countries by regions such as Western Europe, the pacific rim, south Asia, or Africa.
world marketers can also be segmented by political and legal factors such as the type and stability of government, receptivity to foreign firms, monetary regulations and amount of bureaucracy.
cultural factors
can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.
intermarket segmentation also call cross market segmentation
they form segments of consumers who have similar needs and buying behaviors even though they are located in different countries.
Unique selling proposition (USP)
When a company uses a unique way of selling and promoting their product. For example, Walmart promotes its unbeatable low prices and Burger King promotes personal choice “have it your way”
Not all brand differences are meaningful or worthwhile, and each difference has a potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria
Impotant- the difference delivers a high valued benefit to target buyers.
Distinctive, superior, communiable, preemptive, afforable, and profitable