Chapter 7: Customer-Driven Marketing Strategy: Creating Value For Target Customers

Front 1

What does it mean to conduct target marketing?

Back 1

Most companies have moved away from mass marketing and towards target marketing, which means identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.

Front 2

What is market segmentation?

Back 2

Market segmentation: dividing a market into smaller groups with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.

Front 3

What is differentiation?

Back 3

Differentiation: actually differentiating the market offering to create superior customer value.

Front 4

What is positioning?

Back 4

Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers.

Front 5

Name the four major segmentations.

Back 5

1. Geographic: Dividing a market into different geographical units such as nations, provinces, religions, cities or neighborhoods.
2. Demographic: Dividing the market into groups based on variables such as age, gender, family size, income, occupation, market area, education, generation and nationality.
3. Psychographic: dividing a market into different groups based on social grade, lifestyle or personality characteristics.
4. Behavioral: dividing a market into groups based on consumer knowledge, attitudes uses or responses to a product. Here buyers can be divided into occupations, benefits sought, user status, usage rate, loyalty status

Front 6

What is to be considered when segmenting business markets?

Back 6

Consumer and business marketers use many of the same variables to segment their markets. By going after segments instead of the whole market, companies can deliver just the tight value proposition to each segment served and capture more value in return.

Front 7

What is to be considered when segmenting international markets?

Back 7

Operating in many countries present new challenges, such as variety in economic, cultural and political factors, and marketers need to segment these as well.

Front 8

What is inter-market segmentation?

Back 8

Inter-market segmentation (cross-market segmentation): form segments of consumer who have similar needs and buying behaviors even though they are located in different countries.

Front 9

Name some requirements for segmentation.

Back 9

To be useful, market segments must be:
- Measureable: the size, purchasing power and profiles of the segments can be measured
- Accessible
- Substantial: the market segments are larger or profitable enough to serve
- Differentiable: the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs
- Actionable

Front 10

Which three factors is to be looked at when evaluating market segments?

Back 10

In evaluating different market segments, a firm must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources.

Front 11

Explain the four different target marketing strategies.

Back 11

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 firm decides to target several market segments and designs separate offers for each.

Concentrated marketing: the company goes after a larger share of one or a few smaller segments or niches. This approach can be highly profitable, but it also involves taking greater risks.

Micromarketing: the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
- Local marketing: tailoring brands and promotions to the needs and wants of a local customer group
- Individual marketing: tailoring brands and promotions to the needs and wants of individual customers

Front 12

Which factors is crucial when choosing a targeting strategy?

Back 12

- Company resources
- Product’s life-cycle
- Market variability
- Competitors’ marketing strategies

Front 13

What is a value proposition?

Back 13

How a company will create differentiated value for targeted segments and what positions it wants to occupy in those segments.

Front 14

What is product positioning?

Back 14

Product position: the way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products.

Front 15

What is a positioning map?

Back 15

Positioning maps: shows consumer perceptions of a brand versus competing products on important buying dimensions.

Front 16

Which differences can a company promote?

Back 16

- Important
- Distinctive
- Superior
- Communicable
- Pre-emptive
- Affordable
- Profitable

Front 17

Explain more for more positioning.

Back 17

More for more positioning: providing the most upmarket product or service and charging a higher price to cover the higher costs.

Front 18

Explain more for the same positioning.

Back 18

More for the same positioning: comparable quality but at a lower price than “more for more”.

Front 19

Explain same for less positioning.

Back 19

The same for less positioning: the companies don’t claim to offer different or better products, but they have many as the same brands as more expensive stores.

Front 20

Explain less for much less positioning.

Back 20

Less for much less positioning: product offers less and costs less.

Front 21

Explain more for less positioning.

Back 21

More for less positioning: the ideal offering.

Front 22

What is a positioning statement?

Back 22

Positioning statement: a statement that summarizes company or brand positioning – it takes this form: “To (target segment and need) our (brand) is (concept) that (point of difference)”.