Marketing; MT2 - QB; Lesson7 Flashcards
(9 cards)
How would you describe the key differences between differentiation and positioning? Do businesses use both techniques?
Differentiation is the process of defining a company’s products or services from its competitors by emphasizing its unique qualities and benefits. Positioning, on the other hand, is the strategic process of establishing a brand or product in the consumer’s mind, often relative to competitors, focusing on perceptions and communication. Businesses typically integrate both strategies: they use differentiation to create the unique value proposition of their offerings and then apply positioning to communicate and establish this unique value in the minds of the target consumers.
How is demographic segmentation used in consumer markets? Provide an example where marketers have used demographic segmentation.
Demographic segmentation divides the consumer market based on measurable characteristics, such as age or income, to tailor marketing efforts. For example, a toy company may target products toward children aged 3-7, using age segmentation to align marketing messages with the interests of this age group.
What is the value of intermarket segmentation for global businesses?
Intermarket segmentation is valuable for global businesses as it identifies consumers with similar needs across different markets, allowing for unified marketing strategies and consistent brand messaging, which can enhance efficiency and global brand coherence.
There are many ways to segment a market, but not all segmentations are effective. Explain the five requirements for effective market segmentation.
Effective market segmentation must fulfill five criteria: measurability (segment size and purchasing power are quantifiable), accessibility (segments can be reached and influenced via marketing channels), substantiality (ensuring that segments are large and profitable enough for targeting), differentiability (segments have distinct needs and respond differently to marketing stimuli), and actionability (allowing the development and execution of effective marketing programs to attract and serve the segments).
Explain the differences between differentiated and undifferentiated marketing. Can a business effectively use both strategies?
Differentiated marketing tailors offerings to different market segments, while undifferentiated marketing approaches the entire market with a single strategy. A business can use both by applying undifferentiated strategies to products with universal appeal and differentiated strategies to niche markets, maximizing market coverage and customer satisfaction.
How can a company gain competitive advantage through differentiation? Describe an example of a company that illustrates each type of differentiation discussed in the chapter.
A company can gain a competitive advantage through differentiation by offering products or services that are perceived as unique and valuable to customers. Differentiation can occur through product features, customer service, distribution channels, or even marketing tactics.
For example, Apple has successfully differentiated its products through design and technology innovation, creating a loyal customer base willing to pay premium prices. Another example is Starbucks, which differentiates itself with a unique customer experience and a wide variety of customizable beverages. These companies illustrate how differentiation can create a competitive edge by distinguishing a brand in ways that are important to consumers.
Using the full spectrum of segmentation variables, describe how Virgin America segments and targets the market for airline services.
Virgin America targeted its airline services by understanding who its customers are and what they value. They focused on city-based travelers, younger and middle-aged professionals with spending power, individuals who enjoy a tech-friendly and stylish flying experience, and categorized their customers by how often they travel, offering perks for loyal flyers and attractive options for occasional trips. This approach allowed Virgin America to personalize its services and marketing, making sure they spoke directly to each traveler’s needs and desires.
Which market targeting strategy is Virgin America following? Justify your answer.
Virgin America pursued a differentiated targeting strategy, crafting distinct experiences for different customer groups: tech-oriented professionals, leisure travelers, and luxury-seekers. Their approach was to provide unique in-flight features, upscale service options, and a loyalty program that appealed to frequent flyers, enabling them to engage with a wide array of market segments, each with tailored communication and service delivery. This method aimed to maximize appeal across diverse consumer preferences, reflecting a nuanced understanding of various travelers’ needs.
Write a positioning statement for Virgin America.
Virgin America provides discerning travelers with a premium airline experience, blending style, comfort, and innovation. Unlike competitors, Virgin America prioritizes customer satisfaction, offering state-of-the-art in-flight entertainment and a touch of luxury, ensuring every journey is unforgettable.
