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Market Segmentation

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Divide a market into smaller segments

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Identifying a target market

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Select the segment/s in which to operate

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Differentiation

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Create something perceived as unique by your customers

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Positioning

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Decide how to operate in a specific segment, and how to be perceived by customers

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Market

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People or organizations with needs or wants and the ability and willingness to buy

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Market Segment

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A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs and purchasing behavior

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Market Segmentation

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The process of dividing a market into meaningful, relatively similar, identifiable segments or groups

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5 Bases of Segmentation

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Geography, Demographics, Psychographics, Benefits Sought, and Usage Rate

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5 Criteria for Segmentation

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Difference, Substantiality, Identifiability and Measurability, Accessibility, and Responsiveness

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Geographic Segmentation

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Region of the country, Market Size, Market Density, and Climate

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Demographic Segmentation

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Age, Gender, Income, Ethnic, and Family Life Cycle

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Income Segmentation

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Determines consumer wants, Determines Buying Power, and Retailers can Appeal to

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Psychographic Segmentation

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Personality, Motives, Lifestyles, and Geodemographics

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Personality

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Reflects a person's traits, attitudes, and habits

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Motives

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Marketers might appeal to emotional, rational, or status motives, among others

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Geodemographic Segmentation

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-Segmenting potential customers into neighborhood lifestyle categories -Combines geographic, demographic, and lifestyle segmentation

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Benefit Segmentation

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The process of grouping customers into market segments according to the benefits they seek from the product

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More

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The _____ variables you use, the more accurate your customers' profile will be however the more clumsy and hard to manage your segments will be

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Target Market

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A group of people or organizations for which and organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

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Undifferentiated Targeting Strategy

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A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

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Advantages of Undifferentiated Targeting Strategy

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Potential savings on production and marketing costs

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Disadvantages of Undifferentiated Targeting Strategy

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Unimaginative product offerings and company more susceptible to competition

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Concentrated Targeting Strategy

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A strategy used to select one segment of a market for targeting marketing efforts

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Advantages of Concentrated Targeting Strategy

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Concentration of resources, meets narrowly defined segment

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Disadvantages of Concentrated Targeting Strategy

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Segments too small, or changing and large competitors may market to niche segment

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Multisegment Targeting Strategy

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A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

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Advantages of Multisegment Targeting Strategy

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Greater financial success and economies of scale

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Disadvantages of Multisegment Targeting Strategy

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Higher costs and cannibalization

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Costs of Multisegment Targeting Strategy

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Product design costs, production costs, promotion costs, inventory costs, marketing research costs, management costs, and cannibalization

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One-to-One Marketing is

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Individualized, Information-Intensive, Long-Term, Personalized

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One-to-One Marketing has a goal of

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Cost reduction, customer retention, increased revenue, and customer loyalty

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STP

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Segmentation, targeting, and positioning

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Positioning

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Developing a specific marketing mix to influence potential customers' overall perception or a brand, product line, or organization in general

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Effective Positioning

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-Assess the positions occupied by competing products -Determine the dimensions underlying these positions -Choose a market position where marketing efforts will have the greatest impact

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Product Differentiation

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A positioning strategy that some firms use to distinguish their products from those of competitors, and that is something valuable for the customers

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Perceptual Mapping

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A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds

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Positioning Bases

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Attribute, price and quality, use or application, product user, product class, competitor, and emotion

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Repositioning

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Changing consumers' perceptions of a in relation to competing brands

Segmentation, Targeting, and Positioning – Flashcards

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