Chapter 6 Flashcards
(26 cards)
What 3 fundamental concepts work together to create and reinforce a product’s image to its consumers and to the market in general
Segmentation, targeting, and product positioning
market segmentation analysis allows for what
allows marketers to identify which segments could be a focus, where gaps in the market exist, and where future opportunities may lie.
The concepts of market segmentation, target markets, and product positioning are based on what three important facts
- Consumers have a range of different needs, and a single product cannot satisfy everyone
- Companies have limited amounts of money, which need to be spent efficiently and effectively on consumers who are most likely to purchase the product
- marketers need to have clear consumer insights on their target markets in terms of product needs, price expectations, purchase habits, and the communication tools most used
Define a market segment
This is a piece of the market - it involves aggregating prospective buyers into groups that have common needs and respond similarly to marketing programs. These groups are relatively homogenous and consist of people who are fairly similar in terms of their consumption behavior, attitudes, and profiles
What are the 2 main market segments
- The consumer market
- The business market
Define the consumer market
This consists of goods, services, and ideas that a person can purchase or support for their own personal use
Define the business market
This involves products that are purchased either to run a business or to be used as a component in another good or service
Normally there is more than one firm vying for the attention of prospective buyers in the market, this results in marketers following what strategy
product differentiation - so that their products appear distinct from competitive offerings
Define product differentiation
Positioning a product to a target group so that it appears distinct from competitive offerings.
–> a product does not need to be better than the competition, they are positioned so they can meet the needs of their target consumers
What are the 4 approaches that a company can take to segment the market
- mass marketing strategy
- segment marketing strategy
- niche marketing strategy
- individualized marketing strategy
Describe mass marketing
- exists in a limited capacity today
- when a product with broad appeal is widely marketed to the entire market with no product or marketing differentiation at all
ex. utilities, fruits
Describe segment marketing
- This is the most common form of segmentation
- involves the marketing of a wide range of different products and brands to specifically meet the needs of an organizations varied target markets
ex. in competitive industries that are dominated by large organizations such as the food business, car industry, etc. (ex. General motors marketing different types of vehicles to appeal to different market segments in the automobile market)
Describe niche marketing
This is where a company restricts its efforts to marketing a limited product line to a narrow but profitable single segment of the market that is of marginal interest to major competitors
Describe individualized marketing/one-to-one marketing
- involves customizing products to fit individual needs
–> individualized marketing communication is messages and offers being customized for target audiences while individualized market segmentations product and service offerings are also customized to meet individual needs
–> todays internet ordering and flexible manufacturing and database marketing techniques have facilitated individualized market segmentation by making it easier to tailor goods and services to suit individual customer needs
–> ex. individual names on coke cans
What is a target market
This is a specific group or segments of existing and potential consumers to which marketers direct their marketing efforts
Describe a target market profile
A description of the target market that contains specific information about the target group in four areas: geographics, demographics, psychographics, and behavioristics.
In a target market profile the markets are segmented using what four variables
- Geographics (where does the target market live and work)
- Demographics (What is the basic census-type information on the target market as a whole)
- Psychographics (What are the prevailing attitudes, values, interests, habits, and approaches to life that this target market shares)
- Behavioristics (How does this target market use and interact with the product)
Define personas
Character descriptions of a typical customer in the form of fictional character narratives, complete with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with a brand
Describe segmentation analytics
- research companies can provide general data on the size and growth of markets, as well as general consumer and lifestyle trends, to assist in segmentation analysis
- you can get data on trends, market size, competitive products,, market share, future prospects
- you can also get segmentation data on a more granular basis to pinpoint information on population clusters that assists marketers ex. postal code data
What are the 6 steps for segmenting a market
- Identify consumer/customer needs and common characteristics in the market
- Cluster common consumer/customer variables to create meaningful market segments (either using segmentation analytic companies, data from CRM databases, or RFM analysis (recency, frequency, monetary value) (are reviewing the market from a consumer/customer perspective NOT from a product perspective)
- Estimate the size and feasibility of each segment
- Identify the segments to be targeted (look at market size, expected growth, competitive position, compatibility, cost of reaching segment)
- Take actions with marketing programs to reach the segments
- Monitor and evaluate the success of these programs compared with objectives
Define product positioning
The impression of the product you want to establish in consumers’ minds relative to their needs and the competition.
What are the 3 basic factors that tend to surface in product positioning
- Image (Products are often positioned as leaders, contenders, or rebels in the market, also taking on characteristics such as trusted, prestigious, or thrifty. ex. TSN saying champions live here)
- Product attribute (Products with features that differentiate them from the competition are often positioned on this platform, bringing product claims to the forefront. Ex. Subway positions itself as having healthy and fresh sandwiches)
- Price (Products with brand parity and little product differentiation may position themselves on price platform. (Ex. Walmart positions as offering lowest retail prices)
Define a positioning statement
A formalized statement that identifies the image a branded product represents in the market and what sets it apart from the competition.
includes: the target market, the branded product name, the category in which the product competes, and the brands unique attributes and benefits
define repositioning
Changing the place a product occupies in consumers’ minds relative to competitive products to more accurately meet consumer needs
