Flashcards in Chapter 7: Market Segmentation, Targeting, and Positioning Deck (35):
What three basic marketing principles are keys for finding new opportunities in the marketplace?
Segmentation, targeting, and positioning
Can Alfred Sloan's GM strategy be replicated today? How did his strategy change marketing?
No. Most companies don't have the resources to target all market segments but it was the IDEA of market segmentation that changed marketing because today most marketing managers target certain segment subsets and attempt to appeal to them.
What is MARKET SEGMENTATION?
The process of grouping customers into relatively homogeneous sets or groups such that customers within a segment are similar to one another in the way they respond to the marketing effort directed toward them.
What is GEOGRAPHIC SEGMENTATION?
Grouping based on differences in geographic regions, population density, population size, and climate.
What is DEMOGRAPHIC SEGMENTATION?
Grouping based on differences in age, gender, income, level of education, social class, family composition, religion, and ethnicity.
What is PSYCHOGRAPHIC SEGMENTATION?
Grouping based on differences in personality, motives, or lifestyle.
What is BEHAVIORAL SEGMENTATION?
Grouping based on differences in the core benefits customers seek, usage situation, brand loyalty, usage rate, and price sensitivity.
What kind of shoppers have high brand sensitivity and low price sensitivity?
Brand-loyal shoppers will pay as much as they need in order to purchase their favorite brand.
What kind of shoppers have high brand sensitivity and high price sensitivity?
Deal shoppers purchase leading brands at a discount.
What kind of shoppers have low brand sensitivity and high price sensitivity?
Price shoppers purchase lowest-price products regardless of brand.
What kind of shoppers have low brand sensitivity and low price sensitivity?
Convenience shoppers maximize their velocity through shopping environments.
What is the problem with complex market segmentation?
1. Company resources are limited.
2. Brands with schizophrenic multiple personalities don't survive.
3. Companies can't cope with moving in a hundred different directions all at the same time.
What are the 5 characteristics of good segmentation?
5. Unique Needs
What is MEASURABLE? (good segmentation characteristic)
Individuals can be assigned to a segment and the number of individuals in the segment can be counted.
What is ACCESSIBLE? (good segmentation characteristic)
Individuals in the segment can be reached through the company's promotion and distribution channels.
What is DURABLE? (good segmentation characteristic)
Segment membership and its size is relatively constant over time.
What is SUBSTANTIAL? (good segmentation characteristic)
The segment size is large enough to make products profitable.
What is UNIQUE NEEDS? (good segmentation characteristic)
The needs and/or benefits-sough of the segment membership are homogeneous within each segment and heterogeneous across the segments.
What overlooked segmentation method is similar to a political strategy?
Understand the benefits that the love group (brand champions) loves.
See the swing group as your biggest opportunity.
Ignore the hate group.
Why is USAGE SITUATION important in market segmentation?
Customers make decisions based on the situation.
Example 1: The wealthy will still buy an economic car if, say for instance, it is for their son and they know he'll beat it up.
Example 2: Anniversary dinner VS. lonely meal in front of the tv.
How can CLUSTER ANALYSIS help in dividing a market of potential customers into segments?
Based on survey answers, cluster analysis can be applied to the answers to divide respondents into identifiable homogeneous groups and assign respondents appropriately.
Explain SEGMENTATION BASIS vs. SEGMENT PROFILE
Segmentation basis is (such as the importance of specific product benefits) can be used to assign potential customers into different segments. Once people are assigned to those segments, each can be profiled using other research data (demographics, for example).
A segment profile should allow you to see the similarities in customers within a segment AND the differences in customers across the segments.
What criteria can be used in selecting segments? (known as targeting)
1. Market Size - Is the market large enough to deliver expected profits for the company?
2. Expected Growth - Is the market growing?
3. Competitive Position - What is the level of competitive rivalry/intensity in the segment? Is your company's differentiated product offering valued by the segment?
4. Is the market economically accessible?
What is PRODUCT POSITIONING?
It is the act of designing the company's product offering so that it occupies a distinct and valued place in the target customers' minds.
What is "Me Too" positioning?
This type of positioning strategy is avoided because it means that you get the same benefits for the same price compared to another competitor. The purpose of positioning is to give consumers a reason to make a change. (Study the "Choosing a Value Positioning Strategy Matrix", 7-12)
What are the 4 viable options from the "Choosing a Value" Matrix?
1. I'm willing to pay more for more benefits. (Luxury Brands)
2. I'm willing to pay the same for more benefits. (Japanese auto-makers vs US auto-makers)
3. I'm willing to pay less for the same benefits. (Hyundai vs Honda)
4. I'm willing to pay much less for fewer benefits. (Hostels)
What is the key to effective product positioning?
Identifying a compelling USP (unique selling proposition) and delivering on it. A USP brings a brand's positioning into focus by forcing marketing managers to answer pointed questions.
What is the three-part definition of a USP?
1. Each advertisement must make a proposition to the customer.
2. The proposition must be one that the competition either cannot, or does not, offer.
3. The proposition must be so strong that it can move the masses. (Pull in new customers)
What is the basic USP writing structure?
[Product name] competes in [product category] and provides [biggest benefits] to [customer identity] when they are [buying situation]. [Product name], unlike [main competitors], is unique because it provides [element of differentness].
What is PERCEPTUAL MAPPING?
A simple method for getting a feel for how customers perceive brands. (Based on performance) They can provide insight about differentiating benefits and opportunities for new products. (Coke vs Pepsi vs Sprite, etc)
What is GAP ANALYSIS?
Compares brands based on the importance AND performance of their differentiating features and benefits. (Grocery Store department matrix)
What is HIERARCHICAL VALUES ANALYSIS?
It is a three-step research process that consists of:
1. Eliciting (evoking) distinctions
2. Pyramiding down
3. Laddering up
(Product Feature > Product Benefit > Personal Benefit > Personal Value)
What is the PERSONAL RELEVANCE BRIDGE?
The emotional connection (the "love connection") our product makes with brand champions. Once identified it provides a deep understanding of the "product promise" and selling proposition that will make the product stand out in consumers' minds.
From most useful to most used, what are the ways to segment?