Chapter 7: Segmentation, Targeting, and Positioning

Vocabulary flashcards based on Chapter 7: Segmentation, Targeting, and Positioning.

Market segmentation

The process of dividing a larger market into smaller groups, or market segments, based on meaningfully shared characteristics.

Market segments

The groups of consumers who have shared characteristics and similar product needs.

Demographic segmentation

Segmentation that divides markets by characteristics such as age, gender, income, education, and family size.

Geographic segmentation

Segmentation that divides markets into groups such as nations, regions, states, and neighborhoods.

Psychographic segmentation

Segmentation that divides markets using demographics, psychology, and personality traits.

Lifestyle segmentation

Segmentation that divides people into groups based on their opinions and the interests and activities they pursue.

Behavioral segmentation

Segmentation that categorizes consumers according to how they behave with or act toward products.

80/20 rule

A theory that suggests that $20\%$ of heavy users account for $80\%$ of the total demand.

Global segmentation

Segmentation that identifies a group of consumers with common needs and wants that spans the entire globe.

Regional segmentation

Segmentation that divides consumers into groups whose needs and wants only extend across the region or several countries.

Unique segmentation

Segmentation that targets the preferences of a group of consumers with similar needs and wants only within one country.

Target market

The group of customers toward which an organization has decided to direct its marketing efforts.

Targeting

Evaluating each market segment to determine which segments present the most attractive opportunity to maximize sales.

Undifferentiated targeting

A targeting strategy that approaches the marketplace as one large segment.

Differentiated targeting

A targeting strategy that simultaneously pursues several different market segments, usually with a different strategy for each.

Niche marketing

A targeting strategy that involves pursuing a large share of a small market segment.

Positioning

The activities a firm undertakes to create a certain perception of its product in the eyes of the target market.

Perceptual map

A competitive analysis tool that creates a visual picture of product locations in consumers’ minds.

Positioning statement

A succinct description of the core target markets to which a product is directed and a compelling picture of how the firm wants that core market to view the product.

Repositioning

The act of reestablishing a product’s position in response to changes in the marketplace.

Criteria for Effective Market Segmentation

The five required criteria for market segmentation: substantial, measurable, differentiable, accessible, and actionable.

VALS Network Motivations

The three primary motivations identified in psychographic segmentation: ideals, achievement, and self-expression.

Four Bases of Segmentation

The main categories used to segment B2C markets: demographic, geographic, psychographic, and behavioral.