Chp 6: STP Flashcards
what is segmentation key to and example
1) Segmentation is key to identifying the right target markets.
2) Example: if you divide market by geographical region but your product targets health and wellness concerns you’ve segmented the market wrong and will likely miss out on sales from customers in geographical areas segmented that you didn’t target.`
what happens if you identify wrong target market and example
if you identify wrong target market, that will cause issues. Can’t sell health product to those who shop at the dessert aisle.
2 steps in segmentation
1) establish strategy or objectives
2) segmentation bases (LO1)
2 steps in targeting
3) evaluate attractiveness of segment (LO2)
4) select target market based on step 3 (LO3)
1 step in positioning
5) identify and develop positioning strategy (LO4)
explain step 1) establish strategy or objectives in segmentation
Segmentation strategy must be consistent with and derived from firm’s mission and objectives as well as its current situation (SWOT)
LO1: segmentation bases: what does this step involve
involves developing descriptions of the different target market segments and their needs, wants, characteristics using variety of segmentation bases
LO1: segmentation bases: how does this help firms
Helps firms better understand profile of customers in each segment and can distinguish customer similarities and dissimilarities across segments.
LO1: segmentation bases: 5 bases for segmenting markets
geographic, demographic, psychographic, behavioural or combination
LO1: segmentation bases: define geographic segmentation
grouping of consumers on the basis of where they live
LO1: segmentation bases: geographic segmentation: what does it include
Includes grouping by country, region (like western canada), province, city, neighborhood, climate, topography (warm, cold)
LO1: segmentation bases: geographic segmentation: when is this most useful
Most useful for companies whose products satisfy needs that vary by region
LO1: segmentation bases: geographic segmentation:example
increase in ethnic foods in loblaws depends on what area the loblaws store is in. For instance, if it is in ethnic portion of toronto like the greek area, there will be more greek food
LO1: segmentation bases: define demographic segmentation
grouping of consumers according to easily measured, objective characteristics such as age, gender, income and education
LO1: segmentation bases: demographic segmentation example
froot loops are targeting to children
LO1: segmentation bases: demographic segmentation: when is this helpful and example
Demographics play important role in how firms market products. Example: tv viewing habits vary for genders, men channel surf and watch prime time shows that action oriented, women view shows they can personally relate to so product targeted to women should be shown in ads between tv shows that cater to women
LO1: segmentation bases: demographic segmentation: when is this not helpful
Can be poor predictors of users of a product. Firm may assume young people purchase their active wear when it is really purchased by older people.
LO1: segmentation bases: define psychographic segmentation
segmentation base delves into how consumers describe themselves; allows people to describe themselves by using those characteristics that help them choose how they occupy their time (behaviour) and what underlying psychological reasons determine those choices
LO1: segmentation bases: psychographic segmentation: 2 examples
health conscious, if consumers are attached to groups that enjoys literary discussions, will seek out products on books
LO1: segmentation bases: psychographic segmentation: determining psychographics involves what?
involves knowing and understanding 3 components: self-values, self-concept/image, lifestyles
LO1: segmentation bases: psychographic segmentation: define self-values
goals for life, not just the goals one wants to accomplish in a day; a component of psychographics that refers to overriding desires that drive how a person lives his/her life
LO1: segmentation bases: psychographic segmentation: 3 examples of self-values
self-respect, self-fulfillment, sense of belonging
LO1: segmentation bases: psychographic segmentation: how does self-values help marketers
For marketing, self-values help determine the benefits the target market may be looking for from a product
LO1: segmentation bases: psychographic segmentation: actual example of self-values
BMW uses tagline designed for driving pleasure to target these values