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What are the 3 major steps in target marketing?
1) Market Segmentation
2) Market Targeting
3) Differentiation and positioning
Market segmentation
dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.
How is segmentation divided?
- Demographic
- Geographic
- Psychographic
- Behavioral
Demographic segmentation
dividing the market into segments based on variables such as age, family life-cycle, gender, income, occupation, education, religion, ethnicity, and generation.
Geographic segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods.
Psychographic segmentation
dividing a market into different segments based on social class, lifestyle or personality characteristics.
What do people seek with the same personality as them?
People seek brands with the same personality as them.
Behavioural segmentation
dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product.
What are the various types to segment according to behaviour?
- Occasions segmentation
- Benefits sought
- User status
- Usage rate
- Loyalty status
Occasion segmentation
dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Benefits sought
Dividing the market based on the different benefits people seek from products.
User status
The different stages that a customer has with a brand or product.
What are all the different stages a customer has with a brand or product?
- non-user
- ex-user
- first-time users
- regular users
- potential users
Usage rates
Dividing the customers into groups according to how much they use the product.
Loyalty status
People can be divided into groups based on their degree of loyalty.
How can you segment business markets?
Business markets can be segmented geographically, demographically or behavioural.
What are the other variables you should use to segment business markets?
- purchasing approaches
- situational factors
- personal characteristics
how can you segment international markets?
Companies can segment international markets by geographical locations, economic factors or political legal.
What does MASDA mean in effective segmentation?
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable
Measurable
The size of segment and purchasing power can be measured.
Accesible
Market segments can be effectively reached and served. (communication, distributor)
Substantial
If the market segment are large or profitable enough.
Differentiable
When market segmenting, companies should make sure to target different target markets that respond differently to different strategies.
Actionable
Effective marketing moves that can be designed by the company to serve and attract its customers.
Market targeting
evaluating each market segment's attractiveness and selecting one or more segments to enter
When evaluating different market segments, a company should look at 3 factors
- segment size and growth
- segment attractiveness
- company objectives and resources
What are the main market targeting strategies?
- Undifferentiated
- Differentiated
- Niche
- Micro marketing
mass marketing (undifferentiated)
a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.
What is an advantage of mass marketing?
The company is only manufacturing one type of product.
Multi-segment (differentiated)
A market coverage strategy in which a firm decides to target several market segments and design separate offers for each.
What is an advantage and disadvantage of multi-segment?
Advantage - potential for the business to grow.
Disadvantage - Spending more money in manufacturing.
Concentrated (niche)
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.
What is an advantage and disadvantage of concentrated (niche)?
Advantage - Can command a price and focus strengths on one thing.
Disadvantage - If that segment declines you are stuck.
Micro marketing
tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it involves local and individual marketing.
Local marketing
tailoring brands and promotions to the needs and wants of local customer segments, cities and neighborhoods.
Individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers, also called 1 to 1 marketing or customized marketing.
What is differentiation?
Differentiation starts with identifying a set of differences that could be competitive.
What are the number of ways you can distinguish your product?
- Product differentiation
- Service differentiation
- Channel differentiation
- people differentiation
- Image differentiation
Product differentiation
Distinguishing your product from competitors by its style, taste, etc.
Service differentiation
Distinguishing your services from similar services in the market.
Channel differentiation
Companies can distinguish their products through channel coverage, expertise, and performance.
People differentiation
You distinguish yourself with the type of staff you have.
Image differentiation
You distinguish your company by personality, logo, atmosphere, etc.
Product positioning
the place a product occupies in consumers' minds based on important attributes relative to competitive products.
What do we have to think of when we position?
We need to think of a unique value proposition.
Unique value proposition
The full mix of benefits on which a brand is positioned.
What are the 5 positioning strategies?
- More for more
- More for the same
- More for less
- The same for less
- Less for much less
