Chapter 7 (Honors College Marketing Dual Enrollment)

Market Fragmentation

Diverse interest and backgrounds of individuals create greater diversity in needs/wants

-technological/cultural advances —> fueled growing fragmentation of markets

Steps of Target Marketing Process (overall process)

1) Segmentation: Identify & Describe Market Segments

2) Targeting: Evaluate Market Segments & decide which to go after

3) Positioning: Develop marketing mix —> creates competitive advantage in minds of selected target markets.

Market Segmentation

Process of classifying people who form a given market into even smaller groups

4 main ways consumers classify markets

• Demographics

• Psychographics

• Behavioral

• Geographic

Demographic (segmentation)

Why: Peps w/ dif. Personal characteristics which means they will have differing needs/interests

• age

• Gender

• Income

• Marital status

• Ethnic background

• (easiest information to find/collect)

Geographic (segmentation)

Why: Peps’ needs/wants vary on where they live/how living is there

• local

• State

• Regional

• National

• Global

Psychographics (segmentation)

Why: Lifestyle has huge impact on how money is spent.

• attitudes

• Opinions

• Interests

• Activities

• Personality

• Values

Behavioral (segmentation)

Why: behavioral characteristics influence shopping patterns & decision making

• shopping patterns

• Decision-making process

Where do companies get the data from?

• get data from many sources —> best find out information on market/potential target markets

• Info collected from

  • Government data (census)

  • Private research (market research companies, pay $, surveys, focus groups)

  • Trade associations (industry or sector specific)

  • Company research (research done by company of market)

Targeting

Marketers evaluate each potential segment & decide upon which groups of customers they will invest marketing resources

• selected groups are known as target markets

The phases of targeting

1) Evaluate Market Segments

2) Develop Segment Profiles

3) Choose a Targeting Strategy

Evaluate Market Segments

• viable market segment should:

  • members w/ similar wants & needs that are different from those in other segments

  • be measurable in size & purchasing power

  • be large enough to be profitable

  • be reachable by marketing communications

  • have needs the marketer can address

Develop Segment Profiles

• Develop profiles or descriptions of typical customer w/in a segment

  • segment profiles might include demographic, location, lifestyle & product-usage characteristics

• Use the segment profiles instead of making sure every detail is met to market to target market(s)

Choosing A Targeting Strategy

• undifferentiated marketing: mass marketing stragety to target all the segments —> hard for small business & cheapest & only effective for big companies

• Concentrated Marketing: focusing on one segment and marketing towards them

• Differentiated Marketing: marketing to a couple of segments but with different ads/products

• Customized Marketing: many different advertisments (usually for personalization feature is there so can tailor product to what they need/want)

Customized Targeting Strategy

• tailor specific products to pep customer

• common in personal/professional services & industrial markets

Mass customization

Extreme case —> modifying basic product to meet the needs & tastes of an pep consumer

Positioning

Marketers develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition

(last part really important)

Steps in Positioning Decision

1) Analyze Competitor’s Positions (utilize perceptual maps)

2) Define Your Competitive Advantage (Positioning Statement)

3) Finalize the Marketing Mix (Product/Place/Price/Promotional Strategy)

4) Evaluate Responses & Modify as Needed (make sure business is dynamic)

Perceptual maps

When you are comparing two qualities (two relevant variables) to understand how companies compete against each other.

Brand Positioning Statement Includes

• Target Market

• Category frame of reference

• Rational/emotional benefit/promise

• Reasons to believe

Positioning Statement

• Product’s positioning is internally developed/maintained in order to support development of marketing communication that articulates the specific value offered by product

Repositioning

establishes new position in response to market changes

• commonly used to change brand image

• repositioning can breathe life into “retro brands)

Brand Personality

A distinctive image that captures brand’s character & benefits

Positioned for Success by?

• successful brand positioning align clearly w/ company’s competitive advantage(s)

  • marketing mix elements should support a distinctive brand image & value proposition for target market