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Marketing Chapter 6 summary...

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segmentation divide the total market into smaller segments targeting selected the segment or segments to enter differentiation distinguish the market offering to create superior customer value positioning position the market offering in the minds of target customers, all create value for targeted customers geographic segmentation dividing a market into different geographical units, i.e. nations states, regions, counties, cities, or neighborhoods demographic segmentation dividing a market into segments based on variables, i.e. such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity and generation age and life cycle segmentation dividing a market into different age and life cycle groups gender segmentation dividing a market into different segments based on gender income segmentation dividing a market into different income segments psychographic segmentation marketers segment their markets using variables such as social class, lifestyle, personality characteristics. the products people buy reflect their lifestyles Behavioral segmentation- occasion segmentation segments divided according to occasions when the buyers get the idea to buy, make their purchase, use the purchased item. behavioral segmentation- benefit segmentation

segments divide according to the different benefits that consumers seek from the products behavioral segmentation- user status marketers can be segmented into nonusers, ex-users, potential users, first time users, and regular users behavioral segmentation- user rate Markets can be segmented into light, medium, and heavy product users. behavioral segmentation- loyalty status Consumers can be loyal to brands, stores, and companies. multiple segmentation basis helps companies to identify smaller, better-defined target groups identify and understand key customer segments reach customers more efficiently by tailoring market offerings and messages to customers specific needs. segmentation systems help marketers segment people and locations into marketable groups of like minded consumers segmenting business markets -consumer and business markets used many of the same variable for segmentation -variable used by business marketers for segmentation include: operating characteristics, purchasing approaches, situational factors, personal characteristics segmenting international markets Variables include: Geographic location Economic factors

Political and legal factors Cultural factors Intermarket (cross-market) segmentation: Grouping consumers with similar needs and buying behaviors irrespective of their location requirements for effective segmentation measurable, accessible, substantial, differentiable, actionable market targeting Evaluating the various segments based on: -Segment size and growth -Segment structural attractiveness -Company objectives and resources target market Set of buyers sharing common needs or characteristics that the company decides to serve market targeting strategies Targeting broadly undifferentiated (mass) marketing -> differentiated (segmented) marketing -> concentrated (niche) marketing -> micro marketing (local or individual marketing) Targeting narrowly

choosing a targeting strategy factors to consider Company resources Product variability Product's life-cycle stage Market variability Competitors' marketing strategies socially responsible target marketing

Controversy and concern of target marketing -Vulnerable or disadvantaged consumers are targeted with controversial or potentially harmful products.

Socially responsible target marketing should be done to serve both the interests of the company and the interests of those targeted. differentiation and positioning Firms must decide which segments to target and on the value proposition.

Product position is the way a product is defined by consumers on important attributes. choosing a differentiation strategy 1. Identifying a set of differentiating competitive advantages 2. Choosing the right competitive advantages 3. Selecting an overall positioning strategy competitive advantage An advantage over competitors gained by offering greater customer value either by Having lower prices, or Providing more benefits that justify higher prices -Firms can differentiate in terms of product, services, channels, people, or image. Number of differences to promote -Developing a unique selling proposition (USP) for each brand and sticking to it -Positioning on more than one differentiator which differences to promote important distinctive superior communicable

preemptive affordable profitable possible value propositions

winning value propositions more for more = provides the most upscale product or service more for the same = high quality at lower prices more for less = best winning proposition the same for less = gives a good deal less for much less = meeting consumers lower performance or quality requirements at lower price positioning statement Summarizes company or brand positioning

Format: To (target segment and need) our (brand) is (concept) that (point of difference). Communicating and Delivering the Chosen Position All the company's marketing mix efforts must support the positioning strategy.

Maintain the position obtained through consistent performance and communication. The product's position should be monitored and adapted over time. Differentiation and positioning has three steps: -Identifying differentiations to create competitive advantage -Choosing advantages to build a position

-Selecting an overall positioning strategy

A brand's full positioning is its value proposition. Marketers must be careful to guard against stereotypes when using ________. age and life cycle segmentation` The marketing manager at Arbor's Delicatessen targets customers who are working to lose weight but who still want to dine out. The restaurant chain offers a wide variety of low-fat, low-calorie meals that appeal to dieters. Arbors' approach is best referred to as ________ segmentation. psychographic The website leftyslefthand.com markets products to left-handed consumers only. Which targeting strategy does this represent? Concentrated marketing Grocers in neighborhoods with a large Hispanic population typically carry more brands that Hispanic consumers prefer than grocers in other neighborhoods. This is an example of ________. local marketing Many marketers think that companies should aggressively promote only one benefit to the target market. The benefit promoted is known as a(n) ________. unique selling proposition If competitors cannot easily copy the benefit a company chooses to promote, that benefit is said to be _________. preemptive _____ consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Positioning This is the correct answer.

Which of the following is a variable used to segment consumer buyers that is not used to segment business buyers? Psychographics At one time, Miller Beer was known as the "champagne of bottled beer." It was targeted at an elite class of customers. Later, to increase sales, Miller was repositioned to attract members of the working, middle-class. What is this segmentation method called? Psychographic Which of the following would make a segment less attractive to enter? New entrants finding it easy to enter the segment Toyota allows Scion buyers to customize their cars to meet their exact needs and preferences. This is an example of ____________. micromarketing Important. The difference delivers a highly valued benefit to target buyers. Distinctive. Competitors do not offer the difference, or the company can offer it in a more distinctive way. Superior. The difference is superior to other ways that customers might obtain the same benefit. Communicable. The difference is communicable and visible to buyers. Preemptive. Competitors cannot easily copy the difference. Affordable. Buyers can afford to pay for the difference. Profitable. The company can introduce the difference profitably...