Chapter 7 book Flashcards
(15 cards)
Market segmentation
Distinct groups of buyers who differ in their needs and wants
Two groups of market segments
Segmented by descriptive characteristics
Segmented by behavioural considerations
Psychographics
The science of using psychology and demographics to better understand consumers.
Psychographic measurement framework
The VALS framework
Main dimension of VALS segmentation framework
Consumer motivation
Consumer resources
What are the three primary consumer motivations?
Ideals
Achievement
Self-expression
Behavioural segmentation
Buyers divided into groups on the basis of their knowledge of/ attitude towards/ use of/ response to a product.
People can play 5 roles in a buying decision, which?
Initiator Influence Decider Buyer User
To be deemed useful, market segments need to rate favourably on five key criteria, which?
MADAS Measurable Accessible Differentiable Actionable Substantial
Porters, 5 forces/threats that determine long term attractiveness of a market (segment)
- Threat of intense (segment) rivalry
- Threat of potential entrants
- Threat of substitutes
- Threat of buyers growing bargaining power
- Threat of suppliers growing bargaining power
Full market coverage
A firm attempt to serve all customers group with all the products they might need
Undifferentiated or mass marketing
A firm ignores segment differences and goes after the whole market with one offer
Is appropriate when all consumers have roughly the same preferences and there are no natural market segments.
Differentiated marketing
A firm sells different products to all the different segments.
Typically creates more total sales than undifferentiated marketing. However, also increases costs of doing business.
Product specialisation
Selling a certain product to several different market segments
Risk: product may be replaced by an entirely new technology
Market specialisation
Firm concentrates on serving many needs of a particular customer group.
Benefit: Strong reputation/relation with the group
Risk: Customer group may suffer from budget cuts or shrink in size
