MKT 3000 CH.7

Why do Companies sell the same basic product to different groups of people?

They want to determine which consumer they should best cater the most based on their behavior and who buys their goods or service the most based on certain price levels

Market segmentation

requires dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Geographic segmentation

It divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods.

Demographic segmentation

divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Psychographic segmentation

divides a market into different segments based on social class, lifestyle, or personality characteristics.

Age and life-cycle stage segmentation

divides a market into different age and life-cycle groups.

Gender segmentation

divides a market into different segments based on gender.

Income segmentation

divides a market into different income segments

Behavioral segmentation

divides a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product.

Intermarket segmentation

involves forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Segmenting Consumer Markets Benefit Segmentation

•Occasions

•Benefits sought

•User status

•Usage rate

•Loyalty status

What’s a target market?

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

Undifferentiated marketing

targets the whole market with one offer.

•Mass marketing

•Focuses on common needs rather than what’s different

Differentiated marketing

targets several different market segments and designs separate offers for each.

What does concentrated marketing target?

It targets a large share of a smaller market.

Micromarketing

the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations

Examples of Micromarketing

• Local marketing

• Individual marketing

What are the requirements for effective segmentation?

Measurable. The size, purchasing power, and profiles of the segments can be measured.

Accessible. Segments can be effectively reached and served.

Substantial. Segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program..

Differentiable. Segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly to marketing efforts for soft drinks, they 3do not constitute separate segments.

Actionable. Effective programs can be designed for attracting and serving the segments.

4 Categories of Marketing Strategy

• Undifferentiated

• Diffrentiated

• Concentrated

• Micromarketing

Segmenting International Markets

•Geographic location: assumes that nations close to one another have common traits and behaviors

•Economic factors: shape the population’s product/service needs

•Political and legal factors: segment by type and stability of the government, receptivity to foreign firms, monetary regulations, bureaucracy

•Cultural factors: group markets according to common languages, values attitudes, customs and behavioral patterns

Intermarket segmentation

involves forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Requirements for Effective Segmentation

•Measurable

•Accessible

•Substantial

•Differentiable

•Actionable

What are the 4 Market Targeting strategies?

1. Segmentation: Divide the market into groups.

2. Targeting: Pick which group or groups to serve.

3. Differentiation: Make your offer better or different from competitors'.

4. Positioning: Shape how those customers see your brand.

Local Marketing

involves tailoring brands and promotion to the needs and wants of local customer segments.

- Cities

- Neighborhoods

- Stores

Individual marketing

involves tailoring products and marketing programs to the needs and preferences of individual customers.

Also known as:

- One-to-one marketing

- Mass customization

Product position

the way the product is defined by consumers on important attributes.

Example of Product Positioning

Positioning: Spotify does more than just stream music. It gives you “Music for every mood.”

Value proposition

the full mix of benefits upon which a brand is positioned.

Positioning Statement

a positioning statement is one sentence that says who your brand is for, what it is, and why it's better or different from the alternatives. It's mainly an internal guide for the company, not an ad slogan.