aggregating prospective buyers into groups/segments that have (1) common needs and (2) will respond similarly to marketing action
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Product Differentiation
firm use different marketing mix actions to help consumer perceive the product as being different and better than competing products; physical or nonphysical features
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Market-Product Grid
framework to relate the market segments of potential buyers to products offered or potential marketing actions; ex. type of sleeper to pillow
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Usage Rate
the quantity consumed or patronage (store visits) during a specific period; frequency marketing focuses on usage rate
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80/20 Rule
suggests 80 percent of a firm's sales are obtained from 20 percent of its customers
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Customer Lifetime Value (CLV)
represents the financial worth of a customer to a company over the course of their relationship
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Product Positioning
the place a product occupies in consumers' minds based on important attributes relative to competitive products
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Product Repositioning
changing the place a product occupies in a consumer's mind relative to competitive products
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Perceptual Map
a means of displaying in two dimensions the location of products/brands in the minds of consumers to enable a manager to see how they perceive competing products/brands, as well as the firm's own product/brand
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Head to Head Positioning
competing directly with competitors on similar product attributes in the same target market
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Differentiation Positioning
seeking a less-competitive, smaller market niche in which to locate a brand
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Segmentation creates value
enables companies to tailor their offering to consumer groups, identify marketing opportunities, and improve consumer satisfaction by enhancing convenience, relevance, and other key facets of the buying experience
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Business Benefits
identification of unfulfilled needs, better product design, more targeting promotions, and increased customer satisfaction
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Customer Benefits
convenience and time savings, tailored products/services, relevant offers, and personalized experience
(1) market size (2) expected growth (3) competitive position (4) cost to reach (5) company fit
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Value =
perceived benefits - perceived costs
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Elements of a Positioning Statement
(1) defining target market (2) value (3) evidence (4) competitive set
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Segmentation Strategies
one product and multiple market segments, multiple products and multiple market segments, segments of one (mass customization)
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Cannibalization/
new products stealing customers and sales from older, existing ones
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5 Step Process to Segment Market and Select Target Segments
(1) group potential buyers into segments (2) group products to be sold into categories (3) develop a market-product grid and estimate size of markets (groups of related (product synergies) products in columns and segment market (market synergies) groupings in rows, each cell shows estimated market size...) (4) select target markets (5) take marketing actions to reach target markets
Studied by 23 people
