Module 6 Flashcards
(47 cards)
Segmentation
The process of dividing a broad consumer market into subsets of consumers who have common needs, wants, or characteristics, and selecting one or more segments to target with a distinct marketing strategy.
Example: In the context of opening a bike store, segmentation involves identifying different types of bikers such as mountain bikers, competitive bikers, and recreational bikers, and understanding their unique preferences and needs.
Target Markets
Specific groups of potential customers toward which a business directs its marketing efforts. These groups are identified through segmentation and are chosen based on factors such as their attractiveness and compatibility with the business’s offerings.
Example: After segmenting the market for the bike store, the target market might be determined to be mountain bikers due to their high interest in quality bikes and accessories.
Positioning
The process of establishing a distinctive place for a product or service in the minds of the target customers, relative to competing products or services. It involves creating a unique value proposition and communicating it effectively to the target market.
Example: In the bike store context, positioning might involve offering specialized mountain biking gear and promoting the store as the go-to destination for serious mountain bikers.
Differentiation
The process of distinguishing a product or service from others in the market by highlighting its unique features, benefits, or attributes that set it apart. Differentiation aims to make the product or service more attractive to the target market.
Example: The bike store can differentiate itself by offering personalized fitting services, exclusive product lines, or expert advice tailored to the needs of mountain bikers.
Market Segmentation
The process of dividing a heterogeneous market into smaller, more homogeneous groups of consumers who have similar needs, characteristics, or behaviors. This allows companies to tailor their marketing efforts more effectively to specific segments.
Example: In the bike store context, market segmentation involves identifying different types of bikers such as mountain bikers, competitive bikers, and recreational bikers, and understanding their unique preferences and needs.
Example: A clothing retailer may segment its market based on factors such as age, gender, income level, and fashion preferences to target different customer segments with customized product offerings and marketing messages
Market Segmentation Strategies
Approaches used by marketers to divide a market into distinct segments based on various variables such as geographic, demographic, psychographic, and behavioral factors. These strategies help identify target markets and tailor marketing efforts accordingly.
Example: The bike store could use demographic segmentation to target customers based on factors such as age, gender, income, and occupation.
Segmentation Variables in Consumer Markets
Geographic
* Where does the segment live and work?
Demographic
* What is the census-type information on the segment?
Psychographic
* What are the prevailing attitudes, values, interests, habits, and approaches to life that this segment shares?
Behaviouristic
* How does this segment use and interact with the product?
Segmentation Variables
Geographic: nation, province, region, city, neighborhood – can also segment by climate and density (urban vs rural)
Demographic: Age, gender, income, education, occupation, family life cycle, household size, expenditure patterns, religion and ethnic origin
Psychographic: Lifestyle, social class, personality, AIO (Attitudes, Interests, Opinions)
Behavioristic: usage rate, loyalty benefits sought (found out by asking consumers)
Brand Loyalty
The extent to which a consumer consistently chooses a particular brand over others in the market. Brand loyalty is often influenced by positive attitudes toward the brand, repeated purchases, and resistance to switching to competitors.
Example: Marketers aim to cultivate brand loyalty among consumers by offering quality products, excellent customer service, and loyalty programs that incentivize repeat purchases.
Target Market
The specific group of existing and/or potential consumers to which marketers direct their efforts. An appropriate target market meets criteria such as accessibility, measurability, profitability, responsiveness, stability, and uniqueness.
Example: In the context of a bike store, the target market might be identified as avid mountain bikers who live in urban areas and have a high disposable income.
Target
Accessible – can be reached and served
Actionable – can be communicated with
pretending that only some golf club companies make golf clubs for left handed people, is it really possible to market left handed golf clubs to only left handed people? There is no magazine just for left handed people, they don’t differ from the rest of the population on any other characteristics …
Measurable – need to be able to identify who the group is
Profitable – sales potential – already discussed
Responsive - will react to marketing activities
If we try to market diapers straight to the babies, we aren’t going to get much of a reaction.
Stable – will be around for a long enough time
fads come and go, and so do the fans of those fads … if we try to market to these quick changing groups, it will be difficult, especially given the time taken to develop new products, campaigns, etc.
Unique – different from other segments on relevant characteristics
right-handed and left handed people are no different when it comes to marketing pizza, so this would not be a unique way to segment the pizza market
Consumer Profile/Persona
A fictional representation of a target market segment based on synthesized data and common characteristics. Consumer profiles/personas often include details such as demographics, psychographics, behaviors, and preferences to create a narrative that helps marketers understand and relate to their target audience.
Example: The bike store might develop a persona named “Outdoor Enthusiast Emily,” who is in her mid-30s, lives in the suburbs, enjoys outdoor activities, and values high-quality, durable biking gear.
STEPS IN MARKET SEGMENTATION
- Identify consumer/customer needs and common characteristics in the market
- Cluster common consumer/customer variables to create meaningful market segments
- Estimate size and feasibility of each segment
- Identify the segment(s) to be targeted
- Take action with marketing programs to reach the segment(s)
- Monitor and evaluate the success of these programs compared with objectives
Product Positioning
§ The impression of the product you want to establish in consumers’ minds relative to their needs and the competition
§ Positioning is all about making sure that the product sticks out in the consumers’ mind – it’s different in ways that are valued by consumers and therefore it’s meeting consumers’ needs better than the competition.
§ Sets you apart from the competitions
If positioning is to be unique, what differences are worth promoting?
§ Important to the consumer
§ Distinctive from the competition
§ Superior to the competition
§ Can be communicated to consumers
§ Difficult to copy by competitors
§ Affordable for consumers
§ Profitable for the company
Positioning statement
To (target segment and need) our (brand) is a (concept or product) that (point of difference).
A product can be positioned on:
§ Benefits provided or
(e.g., health benefits)
- Head & Shoulders “relieves irritation, controls oiliness, removes flakes”
§ Product attributes or
-e.g., KFC is “Finger Lickin’ Good”
§ Price or
/quality (or value)
- West Jet is “No frill, low-fare, air travel in Canada”
§ Against the competition
- ING Direct is “The UNmortgage, save your money”
Positioning Map
A visual representation used in marketing to illustrate how consumers perceive brands or products relative to each other based on key attributes or factors important to the target market. In a positioning map, the x-axis (Product Design) and y-axis (Customer Service) typically represent different attributes, and each brand or product is plotted accordingly.
Example: In a furniture store example, the attributes of product design and customer service might be plotted on the x-axis and y-axis respectively to create a positioning map that helps identify where the store stands relative to competitors in terms of these attributes.
*image 1
Consumer Perception
The way in which consumers perceive and interpret information about products or brands, which influences their purchasing decisions and behaviors. Consumer perception is subjective and can be influenced by various factors such as advertising, word-of-mouth, and personal experiences.
Example: A furniture store might conduct market research to understand how consumers perceive the store’s product design and customer service compared to competitors, and use this information to adjust its positioning strategy accordingly.
Market Segmentation
Aggregate prospective buyers into groups that have common needs and respond similarly to marketing programs
Targeting
- Evaluate attractiveness of each segment
- Select one or more segments to target with marketing efforts (4 P’s)
The selection of specific customer groups or segments identified through segmentation as the focus of a company’s marketing efforts. Targeting involves evaluating the attractiveness of different market segments and choosing the most profitable or strategically important segments to prioritize.
Example: After segmenting the market, a cosmetics company may choose to target young urban professionals with high disposable incomes who are interested in premium skincare products
Positioning
Understand the impression that you want to establish in consumers’ minds – it needs to meet their needs and be unique from the
“Segmentation, targeting, and product positioning are fundamental concepts that are central to how marketers run their businesses and market their products.”
Example: An energy drink brand may position itself as the choice for extreme sports enthusiasts by emphasizing its high caffeine content and bold flavors, setting it apart from competitors positioned as mainstream beverages
SHAPEWEAR… FOR MEN
§ The hottest trend in the shapewear industry (estimated to reach $7 billion in sales by 2030) is garments designed specifically for men (often referred to as compression wear)
-“Spanx” for men
- SPANX was founded in 2000, providing products for women. Despite this early focus, scans by the company led to seizing an opportunity –serving men. SPANX began producing male underwear in 2010
Target Market Profiles
Detailed descriptions of the characteristics, preferences, and behaviors of the target market segments identified through segmentation. Target market profiles help marketers understand their customers better and tailor marketing strategies to meet their specific needs effectively.
Example: A tech company may create target market profiles for different segments such as tech-savvy millennials, business professionals, and older adults to guide product development and marketing efforts.
