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15 Cards in this Set
- Front
- Back
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Market Segmentation? |
Dividing the mass market into subsets of consumers who share: -common needs -characteristics -behaviours |
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Target Markets |
-the segment(s) toward which a firm's marketing is directed to. |
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Why do we segment the market? |
- Consumers' preferences vary. - By segmenting we create better value to that segment - |
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Who benefits from market segmentation? |
Firms: more efficient use of resources, avoid direct competition by selecting an underserved market. Consumers: specialized needs, reduced search costs Society: New and better products, increased standard of living |
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Factors that influence segmentation |
Preference Heterogeneity Majority Fallacy Sales/ Cost Trade-Off Cannibalization |
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Preference Heterogeneity? |
The extent to which consumers differ in their needs and wants. - People are not all alike. - Consumer preferences vary. - The greater the preference heterogeneity, the more finely segmented the market can be. |
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Majority Fallacy? |
- Common segmentation error. - Focusing on the larger, average segments. - Neglecting the smaller, less typical segments. - Larger segments do not always generate more profits. |
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Sales/ Cost Trade- Off? |
- As market segmentation increase, sales increase. - Costs also increase because multi-product strategies are more expensive to implement. - Have to find the optimal number of segments to target. |
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Cannibalization? |
- Over-segmentation - One offering takes customers from another offering (diet coke) |
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What are some different segmentation strategies? |
1. undifferentiated (mass marketing) - Henry Ford 2. differentiated -GP, GAP, COKE 3. Micromarketing (mass customization, co-creation) Dell, Build-A-Bear, LEGO |
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Types of Segmentation |
Demographic Geographic Geo-demographic Psychographic (lifestyle) Behavioural (usage rate, occasion, loyalty) |
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Segmenting on Price |
1. Perceived pain 2. Perceived value |
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What is positioning? |
The place that the brand occupies in the minds of consumers, relative to competitors' products - A firm must position in terms of competition -Marketing communication creates positioning, not product development |
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Perceptual Mapping |
- A true opportunity - A combination of attributes that nobody wants - A combination of attributes that is impossible to deliver |
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What are the key questions to ask your brand about their positioning? |
1. What position do you currently own? 2. What position do you want to own? 3. Whom you have to defeat to own the position you want. 4. Do you have the resources to do it? 5. Can you persist until you get there? 6. Are your tactics supporting the positioning objective you set? |
