Ch 6 Flashcards

1
Q

The STP Process

A

Segmentation
Step 1: strategy/objectives
Step 2: Segmentation bases

Targeting
Step 3: Evaluate segment attractiveness
Step 4: Select Target market

Positioning
Step 5: Identify and Develop Positioning Strategy

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2
Q

Step 1: establish overall strategy or objective

A

Articulate the mission and the objectives of the company’s marketing strategy clearly
Segmentation strategy must be consistent with and derived from firm’s mission and objectives as well as strengths, weaknesses, opportunities and threats (SWOT)

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3
Q

Step 2: segmentation bases

A

Geographic, demographic, psychographic, behavioural

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4
Q

Geographic

A

organizes customers into groups on the basis of where they live

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5
Q

Demographic

A

groups consumers according to who they are using easily measured, objective characteristics such as age, gender, income, education, race, occupation, religion, marital status, family size, home ownership, family life cycle

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6
Q

Psychographic

A

how consumers actually describe themselves or how they live (personality, lifestyle, motives)

Innovators/Thinkers/Believers/Achievers/Strivers/Experiencers/Makers/Survivors

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7
Q

Behavioural

A

groups consumers on the basis of why they buy, how often and how they plan to use the products

occasional/benefit/loyalty

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8
Q

Occasion segmentation

A

based on when a product is purchased or consumed

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9
Q

Benefit segmentation

A

considers benefits customers are looking for from products

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10
Q

Loyalty segmentation

A

customers that feel so strongly that the firm can meet their relevant needs so well that competitors are virtually excluded from their consideration

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11
Q

Geodemographic segmentation

A

combination of geographic, demographic and lifestyle characteristics

Better to use multiple segmentation methods

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12
Q

Step 3: evaluate segment attractiveness

A

identifiable, reachable, responsive, substantial, profitable

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13
Q

Identifiable

A

Determine who is within their market to be able to design products to meet their needs

Need to ensure that segments are distinct from one another

Who is their market, are the segments unique, does each segment require a unique marketing mix

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14
Q

Reachable

A

Consumers must know the product exists, understand what it can do for them and recognize how to buy it

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15
Q

Responsive

A

For segmentation strategy to be successful, customers in the segment must react similarly and positively to the firm’s offering

Customers must:
Reach positively to firm’s offering
Move toward the firm’s products/services
Accept the firm’s value proposition

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16
Q

Substantial and profitable

A

Once the potential target market is identified, it needs to be measured to determine size and growth potential

17
Q

Segment profitability

A

Segment profitability = (segment size * segment adoption percentage * purchasebehaviour * profit margin percentage) - Fixed Costs

(PUT ON CHEAT SHEET)

18
Q

Step 4: select target market

A

Undifferentiated, differentiated, concentrated, micromarketing

19
Q

Undifferentiated targeting strategy (mass marketing)

A

Used when product is perceived to provide the same benefits to everyone or smaller firms
Ex. toilet paper, toothpaste

20
Q

Differentiated targeting strategy

A

Targets several market segments with a different offering to each

Help obtain bigger share of the market and increases the market for their products overall

Helps diversify business and lowers company’s overall risk

Must develop, manufacture, transport, store and promote accessories separately for each of its store concepts

21
Q

Concentrated (niche) targeting strategy

A

When selecting a single primary target market and focuses all its energies on providing a product to fit the market’s needs
Often used by entrepreneurs

22
Q

Micromarketing

A

When firms tailors a product to suit an individual customer’s wants or needs
Mass customization: firms that interact on a one-to-one basis with many people to create custom-made products

23
Q

Step 5: identify and develop positioning strategy

A

Positioning is how consumers view a company’s products & services based on important attributes. It places a company in mind relative to competing products

Positioning Methods

Value
Product attributes
Benefits & symbolism
Competition
Market leadership

24
Q

Value

A

relationship of price to quality is most important consideration for consumers
Different consumers = different value

25
Q

Product attributes

A

focuses on those attributes most important to the target market and can vary from target market to target market

26
Q

Benefits and symbolism

A

emphasizes benefits of the brand as well as the psychological meaning of the brand to consumers

27
Q

Competition

A

Head to head; positioning products head to head against specific competitor

Position against a specific competitor
Position against an entire product classification

28
Q

Market leadership

A

emphasizing their leadership position within their industry

29
Q

Positioning by using perceptual mapping

A
  1. Determine consumers’ perceptions and evaluations of the firm’s product or service in relation to competitors
  2. Identify the market’s ideal points and size
    -> Use different sized ovals
  3. Identify competitors’ positions
  4. Determine consumer preferences
    -> Find out what customers value most in each segment
  5. Select position
  6. Monitor the positioning strategy
30
Q

Repositioning

A

strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences -> Expensive and risky