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Marketing > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q

Market Segmentation

A

Involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

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2
Q

Market segments

A

the groups of consumers who have shared characteristics and similar product needs

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3
Q

5 Steps in Segmenting & Targeting Markets

A
  1. Group potential buyers into segments
  2. Group products to be sold into categories
  3. Develop a market-product grid and estimate size of markets
  4. Select target markets
  5. Take marketing actions to reach target markets
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4
Q

Segmentation Criteria

A

1) profitability
2) reachability
3) differential response
4) measurability (assignment)

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5
Q

Profitability

A

Company’s ability to generate an adequate return on invested capital.
-Ability to make money

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6
Q

Reachability

A

the ability to reach your audience
Ex: advertising, communication

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7
Q

2 Types of Reachability

A

1) Selective Targeting
2) Self-selection

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8
Q

Selective Targeting

A

firms can identify mechanisms whereby they can communicate with a specific target segment

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9
Q

Self-selection

A

people associating themselves with a certain group

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10
Q

Differential Response

A

responding differently to one of the 4P’s

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11
Q

Measurability (assignment)

A

understanding the differences b/w segments
measuring the difference b/w customers & assigning customers to a certain segment

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12
Q

Segmentation Bases (measurability)

A

1) Geographic
2) Demographic
3) Psychographic
4) Behavioral
5) Past Purchase
6) Brand Ratings/Importance

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13
Q

Geographic segmentation

A

based on where prospective customers live or work (region, city size)

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14
Q

Demographic segmentation

A

based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers

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15
Q

Indexing

A

periodic process of adjusting social benefits or wages to account for increases in the cost of living

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16
Q

Psychographic segmentation

A

based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers

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17
Q

Behavioral segmentation

A

based on some observable actions or attitudes by prospective customers—such as where they buy, what benefits they seek, how frequently they buy, and why they buy

Ex: Product features, usage rate, importance

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18
Q

Past Purchase segmentation

A

customer’s usage rate & purchasing behaviors

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19
Q

Brand Ratings & Importance segmentation

A

what a customer considers important

20
Q

usage rate

A

the quantity consumed or the number of store visits during a specific period

21
Q

Customer Lifetime Value (CLV)

A

represents the financial worth of a customer to a company over the course of their relationship

22
Q

80/20 rule

A

20% of users account for 80% of sales
small group of people have a huge impact

23
Q

Benefit segmentation

A

segment based on what benefits are important

24
Q

4 Targeting Strategies

A

1) Mass Marketing
2) Concentration
3) Multi-Segment
4) Mass Customization

25
Mass Marketing
single product/marketing strategy to reach all customers Ex: regular toothpaste
26
Concentration (Niche)
a company choses one segment, which becomes the target market hitting market need extremely specific Ex: Toothpaste for sensitive teeth
27
Multi-Segment
targeting multiple segments of the market offering multiple types of products for different segments Ex: P&G offering diff types of diapers - Luvs, pampers, organic
28
Mass Customization
tailoring products to meet the needs of individual customers being targeted at the individual level (personal) Ex: Nike lets you design your own shoe/personalized shoe
29
Other Considerations in Targeting Segments
expected size/growth competition cost compatibility
30
Majority Fallacy
The targeting of only the largest segment or group of segments, when a smaller loyal segment could be more profitable.
31
Build-to-Order (BTO)
manufacturing a product only when there is an order from a customer
32
market-product grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions
33
Marketing synergies
running horizontally across the grid, each row represents an opportunity for efficiency in terms of a market segment
34
Product synergies
running vertically down the market-product grid, each column represents an opportunity for efficiency in research and development and production
35
Product Positioning
the place a product occupies in consumers' minds based on important attributes relative to competitive products
36
2 Approaches to Product Positioning
1. Head to head positioning 2. Differentiation positioning
37
Head-to-head positioning
involves competing directly with competitors on similar product attributes in the same target market
38
Differentiation Positioning
seeking a less-competitive, smaller market niche in which to locate a brand
39
Points of Parity
Features or benefits deemed essential by consumers for a brand to be a viable entry in the product category Ex: a brand needs to have a certain attribute in order for them to be in a consumer's consideration set
40
Point of Differentiation
unique/desirable brand features that differentiate it from other competitors in the product category being different Ex: Different beers
41
Product Positioning Statement
identifies the target market and needs satisfied, the product (service) class or category in which the organization's offering competes, and the offering's unique benefits or attributes provided
42
Perceptual Map
a means of displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm's own product or brand
43
4 steps of product positioning
1. Identify the important attributes for a product or brand class. 2. Discover how target customers rate competing products or brands with respect to these attributes. 3. Discover where the company's product or brand is on these attributes in the minds of potential customers. 4. Reposition the company's product or brand in the minds of potential customers.
44
Approaches to positioning
Product Feature Product Benefit User Category Against Other Brand Against Product Category Specific Use
45
Product Repositioning
changing the place a product occupies in a consumer's mind relative to competitive products

Marketing (22 decks)

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