Mrkt 3001 - Ch 09

Front 1

Market Segmentation

Back 1

involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action

links marketing needs to an organization's marketing program (specific marketing mix actions to satisfy those needs)

Front 2

Market Segments

Back 2

relatively homogeneous groups of prospective buyers that result from the market segmentation process

Front 3

Product Differentiation

Back 3

A strategy that involves a firm using different marketing mix acitivties such as product features and advertising to help consumers percieve their product being different and better than competing products

Front 4

1) Forming meaningful groupings

2) Developing specific marketing mix actions

Back 4

Foundation of effective market segmentation

Front 5

Segments of One: Mass Customization

Back 5

tailoring goods or services to the tastes of individual customers on high volume scale

Front 6

Synergy

Back 6

the increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently

Front 7

Cannibalization

Back 7

new products or new chain stealing customers from the older existing ones

Front 8

1) Geographic Segmentation
2) Demographic Segmentation
3) Psychographic Segmentation
4) Behavioral Segmentation

Back 8

4 Segmentation Bases

Front 9

Usage Rate

Back 9

quantity consumed or patronage--store visits-- during a specific period

Front 10

Frequency Marketing

Back 10

strategy that focuses on usage rate. Frequent Fliers

Front 11

80/20 Rule

Back 11

a concept that suggest that 80% of a firms sales are obtained from 20% of its customers

Front 12

Market Product Grid

Back 12

a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization

Front 13

1) Market Size
2) Expected Growth
3) Competitive Position
4) Cost of Reaching the Segment
5) Compatibility with the organizations objectives and resources

Back 13

5 Criteria to Select Target Segments

Front 14

product groupings


(breakfast- lunch- dinner)

Back 14

Running Horizontally along the market -product grid

Front 15

Market segments

Back 15

Vertically on the market-product grid.

Front 16

Product Positioning

Back 16

refers to the place an offering occupies in consumers' minds on important attributes relative to competitive products

Front 17

Product Repositioning

Back 17

Changing the place an offering occupies in a consumers mind relative to competitive products

Front 18

Head to Head Positioning

Back 18

competing directly with competitors on similar products attributes in the same target market

Front 19

Differentiation Positioning

Back 19

seeking a less competitive smaller market niche in which to locate a brand

Front 20

Perceptual Map

Back 20

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 and then take marketing actions

Front 21

Identifying Market needs:

Benefits in terms of:
-Product feature
-Expense
-Quality
-Savings in time and convenience

Back 21

Identifying Market needs

Front 22

Links to marketing actions:

- Take the steps to segment and target markets

Back 22

Links to marketing actions:

Front 23

Executing Marketing Program Actions:

A marketing mix in terms of:
-Product
-Price
-Promotion
-Place

Back 23

Executing Marketing Program Actions:

Front 24

Marketing Segmentation is only a means to an end: its purpose is to lead to tangible marketing actions that increase sales and profitability

Back 24

The purpose of Marketing segmentation

Front 25

An appropriate time to segment markets

Back 25

when a company believes that it can increase sales, profit, and have a return on its investment from all of the trouble and expense it goes through to segment the markets.

Front 26

Not an appropriated time to segment markets

Back 26

When expenses are greater than the potential of increased sales from segmentation

Front 27

3 segmentation strategies:

1. One Product and Multiple Market Segments
2. Multiple Products and Multiple Market Segments
3. Segments of One (Mass Customization)

Back 27

3 segmentation strategies

Front 28

1. One Product and Multiple Market Segments

* A single product or service sold to two or more market segments
* Avoids cost of developing and producing additional product versions.

Back 28

1. One Product and Multiple Market Segments

Front 29

* Multiple products developed to satisfy different market segment
* Clearly more expensive
* Worthwhile if
o Serves customers’ needs better,
o Doesn’t reduce quality
o Doesn't increase price
o Adds to the seller’s sales revenues and profits.

Back 29

2. Multiple Products and Multiple Market Segments

Front 30

Two tier marketing strategies

Back 30

different variations of the same product to high and low-end segments.

Front 31

build-to-order (BTO)

Back 31

manufacturing a product only when there is an order from a customer.

Front 32

CRM versus Synergies

Back 32

Key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer’s individual wants and the increased customer value achieved through performing organizational functions more efficiently.

Front 33

1. Simplicity and cost-effectivness of assigning potential buyers to segments.
2. Potential for increased profit and return on investment.

3. Similarity of needs of potential buyers within a segment.
4. Difference of needs of buyers among segments
5. Potential for marketing action to reach a segment

Back 33

Criteria for Forming Market Segments

Front 34

geographical segmentation

Back 34

based on some where prospective customers live or work

Front 35

demographic segmentation

Back 35

based on some objective physical, measurable, or other classification attribute of perspective customers.

(gender, race)
(age, income)
(birth era, occupation)

Front 36

psychographic segmentation

Back 36

based on some subjective mental or emotional attribute, aspirations, or needs of prospective customers

(personality)
(lifestyle)

Front 37

behavioral segmentation

Back 37

based on some observable actions or attitudes by prospective customers- such as where they buy, what benefits they seek, how frequently they buy, and why they buy.

Front 38

* Statistical area.
* NAICS code.
* Number of employees.
* Usage rate

Back 38

Ways to Segment Organizational Markets

Front 39

1) divide the market into segments

2) actually pick the target segmetents

Back 39

2 different kinds of criteria in the market segmentation process

Front 40

1) Identifications of the important attributes for a product class
2) judgments of existing products or brands with respect to these attributes
3) Rating of an ideal product's brand or attributes.

Back 40

In determining the products position and preference of customers, companies obtain 3 types of data from consumers------In order to chart on perceptual maps

Front 41

1) Group potential buyers into segments
2) Group products to be sold into categories
3) develop market product grid and estimate size of market
4) Select target markets
5) Take marketing actions to reach target markets

Back 41

Steps in Segmenting and Targeting Markets