Comm 223 Review - Lecture 7

Front 1

Market Segmentaion

Back 1

Involves dividing the market into smaller groups with distinct needs, characteristics, of behaviours that might require separate marketing strategies.

Front 2

Targeting

Back 2

The process of evaluating each market segment's attractiveness and selecting one or more segments to enter.

Front 3

Differenciation

Back 3

Differentiating the market offering to create superior customer value.

Front 4

Positioning

Back 4

Arranging for a market offering to occupy a clear, distinctive, and desirable place in the minds of target consumers.

Front 5

Why would you segment the market?

Back 5

- Not everyone likes the same things.
- Consumer heterogeneity.
- Variation in preferences.

Front 6

Bases of segmentation (Hint: GDPB)

Back 6

- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Behavioral Segmentation

Front 7

Geographic segmentation includes grouping by...

Back 7

- region.
- city size.
- urban vs. rural.
- climate.

Front 8

Demographic segmentation includes grouping by...

Back 8

- age.
- income.
- gender.
- family size / life cycle.
- education, religion, race, nationality.

Front 9

What are the 8 stages of the traditional family life cycle?

Back 9

1. Young singles
2. Newly married
3. Full nest 1 ( < 6 years)
4. Full nest 2 ( 6-12 years)
5. Full nest 3 ( teen + )
6. Empty Nest 1 (still working)
7. Empty Nest 2 (retired)
8. Solitary survivor

Front 10

Why does demographic segmentation not always work?

Back 10

- People from the same demographic segment may exhibit very different preferences.
- People from different demographics may exhibit very similar preferences.

Front 11

What is the solution to the failure of pure demographic segmentation?

Back 11

Psychographic segmentation.

Front 12

Psychographic segmentation includes grouping by...

Back 12

- social class.
- lifestyles.
- personality.
- values.

Front 13

Three qualities of psychographics include...

Back 13

- not overt, but covert characteristics.
- tells you why people consume, not just who consumes.
- more determinant of consumer behaviour, but harder to measure than demographics.

Front 14

How do psychographics explain older people being more likely to purchase insurance?

Back 14

- Old people don't just buy insurance because they are old, there are other hidden factors.
- The older you get the higher value you place on security.
- Insurance is a way to address this value.

Front 15

Describe the lifestyle/values of the upper class and provide consumption examples.

Back 15

Lifestyle/values: High income - high quality, high prestige brands.

Consumption examples: Status symbols, luxury items.

Front 16

Describe the lifestyle/values of the middle class and provide consumption examples.

Back 16

Lifestyle/values: Concerned with following media recommendations and what peers say is popular.

Consumption examples: Home furnishings.

Front 17

Describe the lifestyle/values of the working class and provide consumption examples.

Back 17

Lifestyle/values: "Family folk" - depend on relatives for financial and emotional support.

Consumption examples: Outdoors

Front 18

Describe the lifestyle/values of the lower class and provide consumption examples.

Back 18

Lifestyle/values: Very diversified, from frugality to instant gratification.

Consumption examples: Impulse, good bargains.

Front 19

What are the five kinds of behavioral segmentation?

Back 19

Usage occasion - groups individuals according to when they purchase, use or think of buying a product.
Usage experience - I haven't bought it vs I had bought one vs I currently own one.
Loyalty - Groups individuals according to their level of loyalty to the product.
Benefits - Groups individuals according to the benefits they seek from the product

Front 20

What are additional factors to consider for international market segmentation?

Back 20

- Political factors.
- Legal factors.
- Religions.
- Culture.
- Economic factors.
- Location (approachability, logistics, ...)

Front 21

What are the three conditions for good segments?

Back 21

- Homogeneous within.
- Heterogeneous between.
- Targetable.

Front 22

What are the six qualities of being targetable for segmentation? (Hint: ADMASS)

Back 22

- Accessible (for marketing activity).
- Differentiable (distinctive behavior).
- Measurable (identifiable based on observables).
- Actionable (resources should be available).
- Substantial (large enough to make business sense).
- Stable (across time.

Front 23

What are the four levels of targeting?

Back 23

1. Undifferentiated marketing (Mass marketing)
Same products to all consumers
2. Differentiated marketing (Segmented marketing)
Different products to one or more segments
3. Concentrated marketing (Niche marketing)
Different products to subgroups within segments
4. Micro-marketing
Products to suit the tastes of individuals or locations

Front 24

What are the qualities of undifferentiated marketing (mass marketing)?

Back 24

- Economies of scale
- Less investment
- Vulnerable to competition focusing on segments

Front 25

What are the qualities of differentiated marketing (segmented marketing)?

Back 25

- Higher combined sales
- Better and stronger position
- Potential problem with economies fo scale
- Cannibalization
- Develop separate marketing campaigns for the separate segments

Front 26

What are the qualities of niche marketing?

Back 26

- Good when a company has limited resourced
- Achieves a strong position
- Large market share of a small market

Front 27

What are the three main considerations when selecting a segment to target?

Back 27

1. The segments size and growth
- Market potential and sales potential
- Projected growth rate
2. The segments structural attractiveness
- Number/strength of competitors
- Manufacturer-retailer relationship (bargaining power)
3. Company objectives and resources
- Consistent with long term objectives
- Feasible

Front 28

Positioning

Back 28

Defines the product/firm/brand's place relative to the market's needs, consumer perceptions, beliefs, attitudes, and competitive offerings.

Front 29

What is the difference between segmentation and positioning?

Back 29

Segmentation is the marketer's view of the consumer, position is the consumers view of the firm and positioning is using the 4 P's to affect the firms position.

Front 30

Positioning

Back 30

The way the product is defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products.

Front 31

Positioning involves...

Back 31

...implanting the brand's benefits and differentiation in the customers mind.

Front 32

What are examples of differences you can promote as part of a positioning strategy?

Back 32

- Distinctive
- Superior
- Communicable
- Preemptive
- Affordable
- Profitable

Front 33

Perceptual Map

Back 33

A spatial representation of several competing products/services that conveys perceptual information in 2-3 key dimensions. It represents position of the product in the mind of the consumer.

Front 34

Perceptual maps help managers to...

Back 34

- investigate where unmet customers potentially exist.
- identify where competitors might be vulnerable.
- gain insights into how an under-performing product might be repositioned.