Principles of Marketing info – Flashcards
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Companies must identify the parts of market they can serve best and most profitably.
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Companies must design customer-driven marketing strategies that build the right relationships with the right customers.
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Companies have moved away from mass marketing to target marketing
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Target marketing
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defined as identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.
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The shotgun approach
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defined as when companies scatter their marketing efforts.
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the rifle approach
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defined as firm focusing on the buyers who have greater interest in the value they create best.
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There are four major steps in designing a customer-driven marketing strategy
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segmentation, targeting, differentiation, positioning.
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The first two steps of designing a customer driven marketing strategy is segmentation and targeting
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the company selects the customers that it will serve.
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Market Segmentation
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defined as involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might requires separate marketing strategies or mixes.
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Marketing targeting or targeting
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defined as consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.
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The final two steps of designing a customer driven market strategy are differentiation and positioning
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the company decides on value proposition, how it will create value for target customers.
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Differentiation
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defined as involves actually differentiating the firm's market offering to create superior customer value.
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Positioning
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defined as 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.
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Market segmentation
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through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.
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The four important segmentation topics
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segmenting consumer markets, segmenting business markets, segmenting international markets, and the requirements for effective segmentation.
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Segmenting consumer markets
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A marketer has to try different segmentation variable, alone and in combination, to find the best way to view structure.
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The variables that might be used in segmenting consumer markets
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major geographic, demographic, psychographic, and behavioral variables.
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Geographic segmentation
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defined as diving the market into different geographical units, such as nations, regions, states, countries, cities, or even neighborhoods.
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examples of geographic is nations, regions, states, countries, cities, neighborhoods, population density(urban, suburban, rural), climate.
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examples of demographic is age, life-cycle stage, gender, income, occupation, education, religion, ethnicity generation.
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examples of psychographic is social class, lifestyle, personality
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examples of behavioral is occasions, benefits, user status, usage rate, loyalty status
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Many companies today are localizing their products, services, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and neighborhoods.
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Demographic segmentation
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defined as it divides the market into segments based on variables such as age, life cycle stage, gender, income, occupation, education, religion ethnicity, and generation.
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Demographic factors are the most popular bases for segmenting customer groups.
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demographic variables are easier to measure than most other types of variables.
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Age and life cycle stage
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consumer needs and wants change with age. some companies use age and life cycle segmentation, offering different products or using different marketing approaches for different age and life cycle group.
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Age and life cycle segmentation
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defined as dividing a market into different age and life cycle groups.
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Marketers must be careful to guard against stereotypes when using age and life cycle segmentation.
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Gender segmentation
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has long been used in marketing clothing, cosmetics, toiletries, toys and magazines.
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Gender segmentation
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defined as dividing a market into different segments based on gender. For example P&G using secret deodorant specifically targeting woman.
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Income segmentation
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the marketers of products ad services such as automobile, clothing, cosmetics, financial services, and travel have long used income segmentation.
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Income segmentation
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defined as dividing a market into different income segmentation.
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Psychographic segmentation
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is defined as diving buyers into different segments based on social class, lifestyle, or personality characteristics.
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People in the same demographics group can have very different psychographic characteristics.
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Marketers also use personality variable to segment markets.
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For example, different soft drinks target different personalities.
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Marketers sometimes refer to brand focused psychographic segments s brand or tribes.
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communities of core customers with shared characteristics, brand experiences, and strong affinities for a particular brand. For example outfitter REI's core customers are passionate about the great outdoors and share tis belief as members of the REI tribe.
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Behavioral segmentation
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defined as dividing buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.
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Many marketers believe that behavior variables are the best starting point for building market segments.
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Occasion segmentation
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defined as dividing the market into segments according to occasions with buyers get the ide to buy, actually make their purchase, or use the purchased item.
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Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchases, or use the purchased items.
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Occasion segmentation
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can help firms build up product usage.
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A powerful form of segmentation is grouping buyers according to the different benefits that they seek from a product.
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Benefit segmentation
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defined as dividing the market into segments according to the different benefits that consumers seek from the product.
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Benefit segmentation requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.
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for example. people buying bicycles are looking for any number of benefits, from competitive racing and sports performance to recreation, fitness, touring, transporting, and just plain fun.
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user status
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marketers can be segmented into nonusers, ex users, potential users, first time users, and regular users of a product.
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marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users.
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usage rate
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marketers can also e segmented into light medium, and heavy product users. heavy users are often a small percentage of the market but account for a high percentage total consumption.
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loyalty status
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a market can a be segmented by consumer loyalty
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Consumers can be loyal to brands like tide, stores like target, and companies like apple
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buyers can be divided into groups according to their degree of loyalty.
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Some consumers are completely loyal, they buy one brand all the time and cant wait to tell other
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using multiple segments bases
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markets rarely limit their segmentation analysis for one or a few variables. rather they often use multiple segment bases in an effort to identify smaller, better defined target groups.
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segmenting business markets
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consumer and business markets use many of the same variables to segment their markets.
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business buyers can be segmented geographically, demographically industry, company size, or by benefits sought, user status, usage rate, and loyalty status.
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businesses marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situation factors, and personal chacteristics
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segmenting international markets
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few companies have either the resource or the will to operate in all, or even most, of the countries that dot the globe.
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companies can segment international markets using one or a combination of several variables.
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they can segment by geographic location, grouping countries by regions such as Western Europe, the pacific rim, south Asia, or Africa.
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world marketers can also be segmented by political and legal factors such as the type and stability of government, receptivity to foreign firms, monetary regulations and amount of bureaucracy.
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cultural factors
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can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.
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intermarket segmentation also call cross market segmentation
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they form segments of consumers who have similar needs and buying behaviors even though they are located in different countries.
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Unique selling proposition (USP)
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When a company uses a unique way of selling and promoting their product. For example, Walmart promotes its unbeatable low prices and Burger King promotes personal choice "have it your way"
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Not all brand differences are meaningful or worthwhile, and each difference has a potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the following criteria
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Impotant- the difference delivers a high valued benefit to target buyers. Distinctive, superior, communiable, preemptive, afforable, and profitable
