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8 Cards in this Set
- Front
- Back
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Explain market segmentation.
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Dividing a market into smaller groups with distinct needs, characteristics, or behaviour that might require separate marketing strategies or mixes
Targeting: The process of evaluationg each market segment’s attractiveness and selecting one or more segments to enter Differentiation: differentiating the market offering to create superior customer value Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers |
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Explain the different groups of segmentation.
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- Geographic segmentation: dividing a market into different geographical units such as nations, province, regions, cities or neighborhoods
- Demographic segmentation: dividing the market into groups based on variables such as age, gender, family size, income, occupation, market area, education, generation and nationality, - Psychographic segmentation: dividing a market into different groups based on social grade, lifestyle or personality characteristics - Behavioral segmentation: dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product, |
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What is crucial for effective segmentation?
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Measurable: the size, purchasing power and profiles of the segments should be measureable. However, many segmentation variables are difficult to measure (religious affiliation, left-handedness, calories intake etc.)
Accessible: the segments can be effectively reached and served Substantial: large or profitable enough Differentiable: the segments are conceptually distinguishable and respond differently to different marketing mix elements and programmes Actionable: effective programmes can be designed for attracting and serving the segments |
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Which are the different marketing options?
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Undifferentiated marketing/mass marketing:the firm decides to ignore market segment differences and go after the whole market with one offer
Differentiated marketing/Segmented marketing: the firm decides to target several market segments and designs separate offers for each Concentrated marketing/Niche marketing: the firm goes after a large share of one or a few smaller niches, e.g. a local market which bigger competitors don’t serve in a good way One-to-one marketing/micromarketing: the practice of tailoring products and marketing programmes to suit the tastes of specific individuals and locations. Includes local marketing and individual marketing, the latter also labelled one-to-one marketing since it treats every customer individually |
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What is product positioning?
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The way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products. Product position must be planned – if not, products are positioned anyway, but often not in a way that the company wants
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Explain Differentiation and Positioning Strategy
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Companies succeeding in differentiating and positioning itself will gain competitive advantages: advantages over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices
Competitive advantages may reflect strong positions in almost any dimension that is important to consumers: quality, design, durability, compatibility, reliability etc. A positioning statement summarises company or brand positioning: To (target segment and need) our (brand) is (concept) that (point of difference). |
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Explain how a company can choose a differentiation point.
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By thinking through the customer’s entire experience with the company’s products, an almost indefinite number of opportunities to differentiate may be identified: product, services, channels, people, image etc.
Brands can be differentiated on features, performance, style, design etc. Service differentiation often makes sense and is difficult for a competitor to imitate Image differentiation, e.g. Audi vs. BMW How many differences will be promoted? |
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Choosing the Right Advantages to Differentiate
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A difference is worth establishing to the extent that it satisfies the following criteria:
Important Distinctive Superior Communicable Pre-emptive Affordable Profitable The full positioning of a brand – the full mix of benefits upon which it is positioned – is called value proposition |
