What is the least cost production paradigm?
Mass marketing that creates the largest potential market, which leads to the lowest cost, which in turn can lead to lower prices and or higher margins
Micromarketing =
Focus marketing on one of the four levels: segment, niches, local areas and individuals.
4 levels of micromarketing including description:
Market segment : A group of customers who share similar needs and wants.
Niche marketing: more narrowly defined customer group seeking a distinctive mix of benefits or values
Local marketing: focused on wants and needs of local groups
Individual marketing: one-to-one marketing
Flexible marketperceived value offering =
Flexible market offerings to all members of the segment, consists of two parts: naked solution (offering attributes and benefits that all segment members value) discretionary value options (some segments members require)
How can you characterise marketing segments?
To identify preferences:
- Homogeneous preferences: all customers roughly the same preferences
- Diffused preferences: vary greatly in their requirements
- Clustered preferences: natural market segments emerge from groups of customers with shared preferences
Grassroots marketing =
A growing trend that concentrates marketing activities on getting as close and personally relevant to individual customers as possible
What are the risks of localised marketing?
- Tendency to drive up manufacturing costs and so reduce economies scale
- Tendency to create logistical problems
- Possibility that the overall image of the brand may be put at risk
What is customerisation?
Combines operationally driven mass customisation with customised marketing in a way that empowers consumers to design the customer-perceived value offering their choice (design your own shoes).
At what descriptive characteristics are some researchers looking for segmentation?
Geographic: dividing the market in geographical units
demographic: dividing the market based on variables
and psychographic. Also look at behavioural considerations
what differences are important in global and local marketing
Regional, rural and urban characteristics are highly significant
Key Variables demographic segmentation (7)
- Age and life cycle change
- Life stage
- Gender
- Income
- The new consumer
- generation
- Social class
Why is the demographic approach so popular?
Is that they are often associated with customer needs and wants
What are the key trends in social and cultural environment?
- Grey market: constitutes an attractive target market for several perceived-value offerings
- Youth market: generation Y. declining levels of purchasing power in EU and less growth
- Ethnic market: ethnic migration and therefore pay attention to that different cultures have distinct value sets
Psychographic segmentation
using psychology and demographics to better understand consumer markets, based on 3 variables (AIO factors):
- activities
- interests
- opinions
What is VALS
Segmentation system based on psychographic measurements -> values and lifestyles. With the main dimensions: customer motivation and customer resources.. Inspired by one of 3 primary motivations: ideals, achievements and self-expression.
What are the 8 groups in VALS?
Higher resources:
- Innovators
- Thinkers
- Achievers
- Experiencers
Lower resources:
- Believers
- Strivers
- Makers
- Survivors
What is behavioural segmentation?
Place buyers into groups on the basis of their knowledge of, attitude towards use of response to a product/service or market offering package.
What are behavioural variables?
- Occasions
- Benefits
- User status
- usage rate
- buyers-readiness stage
- loyalty status
- attitude
What type of loyalty status are there?
- hardcore loyals: 1 brand all the time
- split loyals: split between 2 or 3 brands
- Shifting loyals: shift loyalty from one brand to another
- switchers: show no loyalty to any brand
What is the conversion model?
Measures the strength of customers psychological commitments to brands and their openness to change to determine how easily a customer can be converted to another choice.
What 8 groups of users do the conversion model segment?
Users of the brand
- Convertible: most likely to defect
- Shallow: uncommitted, could switch
- Average: unlikely to switch brands on short term
- Entrenched: strongly committed to the brand they are using
non-users of the brand
- strongly unavailable: unlikely to switch
- Weakly unavailable: not available to the brand because their preferences lies with their current brand. Although not strongly
- Ambivalent: as attracted to the brand as they are to their current brands
- Available: most likely to be acquired in the short run
VALS:
Which of these motivations look for physical activity, variety and risk
Self-Expression
VALS:
are guided by knowledge and principles
Ideals
VALS:
look for purchases that demonstrate success to their peers
Achievements
