Chapter 4 Flashcards
Market
A group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services
Generic market
A market with broadly similar needs - and sellers offering various, often diverse, ways of satisfying those needs
Prodcut Market
A market with very similar needs and sellers offering close substitute ways of satisfyign those needs
Segmentation and Targeting
Defining generic markets and product-markets
Understanding types of dimensions used to segment markets
Knowing how to identify segments
Deciding what segments to target
Using segmentation approaches
Differentiation and Positioning
Understanding customer’s view
Using positioning techniques
Evaluating segment preferences
Differentiating the marketing mix
Knowing the relationship between positioning and targeting
In a generic market, quite different product types will:
compete with each other
A generic market doesnt include any ______________
product-type terms
Market segmentation
- Naming broad product-markets
- Segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes
Segmenting
An aggregating process - clustering people with similar needs into a “market segment”
Market segment
A relatively homogeneous group of customers who will respond to a marketing mix in a similar way
A good market segments meet the following criteria:
- Homogeneous (similar) within - the customers ina market segment should be as similar as possible with respect to their likely responses
- Heterogenous (different) between - the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions
- Substantial - the segment should be big enough to be profitable
- Operational - the segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables
It is especially important that segments be ___________
operational
This leads to markets to include demographic dimensions such as age, sex, income, etc.
3 ways to develop a market-oriented strategy in a broad product market
- Single target approach - segmenting the market and picking one of the homogeneous segments as the firm’s target market
- Multiple target market approach - segmenting the market and choosing two or more segments, and then treating each as a seperate target market needing a different marketing mix
- Combined target market approach - combining two or more submarkets into one larger target market as a basis for one strategy
Combiners
Try to increase the size of their target markets by combining two or more sgments
Look at various submarkets for similarities rather than differences
Segmenters
Aim at one or more homogeneous segments and try to develop a different marketing mix for each segment
Usually fine-tune their market mixes for each target mixes because they want to satisfy each segment very well
Qualifying dimensisons
Those relevant to including a customer type in a product-market
Determining dimensions
Those that actually affect the customer’s purchase of a specific product or brand in a product-market
Clustering techniques
Try to find similar patterns within sets of data
Use computers
Customer relationship management (CRM)
The seller fine-tunes the marketing effort with information froma detailed customer database
Positioning
Refers to how customers think about proposed or present brands in a market
Positioning maps are based on ______________
customers perceptions - the actual characteristics of the products might be different
Single Target Approach
Meet needs, but only 1 target
Multiple Target Approach
meet needs of multiple
Costly
Combined target approach
Open for competition
Only partly meets needs
