Chapter 7 - Customer Driven Marketing Strategy

Front 1

Market Segmentation

Back 1

Dividing a market into smaller groups with distinct needs, characteristics or behavior that might require separate marketing strategies or mixes

Front 2

Market targeting

Back 2

The process of fevaluatin each market segment's attractiveness and selecting one ore more segments to enter

Front 3

Differentiation

Back 3

Actually differentiating the market offering to create superior customer value

Front 4

Review fig. 7.1

Back 4

pg. 192

Front 5

Positioning

Back 5

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to the competing offers IN THE MINDS of the target consumers

Front 6

Marketing boils down to two questions

Back 6

1. Which customers will we serve

2. How will we serve them

Front 7

Geographic Segmentation

Back 7

Dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhodds

Front 8

Demographic Segmentation

Back 8

dividing the market into groups based on variable such as:

Age
Gender
Family size
family life cycle
income
occupation
education
religion
race
generation
nationality

Front 9

Age and Life-cycle segmentation

Back 9

dividing a market into different age and life-cycle groups

Front 10

Gender Segmentation

Back 10

Dividing a market into different groups based on gender

Front 11

Income Segmentation

Back 11

dividing a market into differnt income groups

Front 12

Psychographic Segmentation

Back 12

Dividing a market into different groups based on:

Social class
lifestyle
personality characteristics

People in the same deographic group can have very different psychographic makeups

Marketers also use personality variables to segment markets

Front 13

Behavioral Segmentation

Back 13

Dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product.

Many marketers believe that behavior variables are the best starting point for building market segments

Front 14

Occasion Segmentation

Back 14

dividing the market into groups according to occasions when buyers get the idea o buy, actually make their purchase or use the purchased item

Front 15

Benefit Segmentation

Back 15

dividing the market into groups according to the different benefits that consumers seek from the product

Front 16

User Status

Back 16

<b>Non-users</b>

Ex-Users

Potential Users

First-time Users

Regular users

reinforce regular users attract non-user , and reinvigorate relationships with ex-users

Front 17

Usage Rate

Back 17

Heavy users are often a small % of the market but account for a high % of TOTAL consumption

Front 18

Loyalty Status

Back 18

loyal to brands, stores, companies

differing degrees of loyalty to each

Front 19

A company can learn a lot by analyzing loyalty patterns in its market. It should stat by studying its own loyal customers

Back 19

by looking at customers who are shifting away from its brand the company can learn about its marketing weakness

Front 20

Marketers often use mulitple segmentation bases in an effort to identify smaller, better-defined target groups

Back 20

One of the leading segmentation systems in the PRIZM NE system by Claritas

Front 21

In evaluating different market segments a firm must look at 3 factors

Back 21

Segment Size & Growth

Segment structural attractiveness

Company objectives and resources

Front 22

Company also needs to examine major structural factors

Back 22

that affect long run segment attractiveness.

The existence of many atual or potential substitute products may limit prices an the profits that can be earned in a segment

<b>Relative Power of Buyers</b>
affects segment attractiveness

A segment may be less attractive if it contains <b>powerful suppliers</b> that can control prices or reduce quality

Front 23

A company should enter only segments in which it can create superior customer value and gain advantages over competitors

Back 23

true

Front 24

Target Market

Back 24

A set of buyers saring common needs or characteristics that the company decides to serve.

Front 25

Undifferentiated (mass) marketing

Back 25

A market coverage strategy in which a firm decies to ignore market segment differences and go after the whole market with one offer

Front 26

**Fig. 7.2

Back 26

Marketing Targeting Strategies

Front 27

Differentiated (segmented) marketing

Back 27

A market coverage strategy in which a firm decides to target SEVERAL market segements and designs separate offers for each.

Front 28

Concentrated (niche) marketing

Back 28

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches

Front 29

Micromarketing

Back 29

The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups includes lobal marketing and individual marketing

Front 30

Local marketing

Back 30

tailoring brands and promotions to the needs and wants of local customer groups--cities, neighborhoods, and even specific stores

Front 31

Individual Marketing

Back 31

one to one marketing

customized marketing

Front 32

Product Position

Back 32

the way the product is define by tconsumers on important attributes the place the product occupies in CONSUMERS MINDS relative to competing products

Front 33

To simplify the buying proces, consumers organize products, services, and companies into categories and position them in their minds.

Back 33

Consumers position products with or without the help of marketers

Front 34

Perceptual Positioning Maps

Back 34

shows consumer perceptions of their brands versus competing products on important buying dimensions.

2 Dimensions

Price

Orientation

Front 35

A brand's positioning must serve the needs and preferences of well defined target markets

Back 35

The differentiation and positioning task consists of three steps

Front 36

To find points of differntiation, marketers must think through the customer's entire experience with the company's product or service

Back 36

It can differentiate along the lines of:

Product

services

channels

people

image

Front 37

read pg. 213

Back 37

now!

Front 38

Companies should aggressively promote only one benefit to the target market

Back 38

Unique selling propositions (USP)

Front 39

Which Differences to Promote

Back 39

Not all brand differences are meaningful or worth while not every difference makes a good differentiator.

Front 40

A difference is worth establishing to the extent that it satisfies the following criteria

Back 40

<b>Important</b>:
the difference delivers a highly valued benefit to target buyers.

<b>Distinctive</b>:
Competitors do not offer the difference, or the company can offer it in a more distinctive way.

<b>Superior</b>:
The difference is superior to other ways that customers might obtain the same benefit.

<b>Communicable</b>:
The difference is communicalbe and visible to buyers

<b>Pre-emptive</b>:
Competitors cannot easily copy the difference

<b>Affordable</b>:
Buyers can afford to pay for the difference

<b>Profitable</b>:
the company can introduce the difference profitably

Front 41

Value Proposition

Back 41

The full positioning of a brand--the full mix of benefits upon which it is positioned

answers "Why should I buy your brand"

Front 42

Know Fig. 7.4

Back 42

Benefit x Price Value Prop Matrix

Front 43

5 winning value props upon which companies can position their products

Back 43

Write out Matrix--work through it.

More for More
More for the same
More for the less
The same for less
Less for much less

Front 44

More for More

Back 44

often the price difference exceeds the actual increment in quality.

invovles prividing the most upscale product or service and charging a higher price to cover the higher costs

Front 45

More for the same

Back 45

introducing a brand with comparable quality but lower price

Front 46

The same for less

Back 46

powerful because everyone likes a good deal.

offer many of the same brands as department stores and specialty stores but at a deep discounts based on superior purchasing power and lower-cost operations

Front 47

Less for much less

Back 47

in many cases consumers will gladly settle for less than optimal performance or give up some bess and whistles for lower price

Front 48

Positioning Statement

Back 48

A statement that summarizes company or brand positioning--it takes this form:

To (target segment and need) <b>Our</b> (brand) <b>Is</b> (concept) <b>That</b>(point-of-difference)

Front 49

Positioning first states the product's membership in a category and then shows its point of difference from other members of the category

Back 49

true