Comprehensive Marketing and Consumer Segmentation Strategies

Market segmentation

The process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs.

Geographic segmentation

Divides the market into different geographical units such as nations, regions, states, counties, or cities.

Demographic segmentation

Divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

Age & Lifecycle

The process of offering different products or using different marketing approaches for different age and life-cycle groups.

Gender

Divides the market based on sex (male or female).

Income

Divides the market into affluent or low-income consumers.

Psychographic segmentation

Divides buyers into different groups based on social class, lifestyle, or personality traits.

Behavioral segmentation

Divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product.

Occasion

Dividing buyers based on when they think about buying or actually buy a product.

Benefits sought

Dividing buyers based on the benefits they want from a product.

User status

Divides buyers based on their relationship with the product.

Usage rate

Divides buyers based on how much they use a product.

Loyalty status

Divides buyers based on how loyal they are to a brand.

Undifferentiated marketing

Targets the whole market with one offer, focusing on common needs rather than what's different.

Differentiated marketing

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

Concentrated marketing

Targets a small share of a large market, often due to limited company resources.

Micromarketing

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

Product position (Market positioning)

The way the product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products.

Product

Anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.

Service

A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in ownership.

Experiences

What buying the product or service will do for the customer.

Core benefits

What the buyer is really buying.

Actual product

Represents the design, brand name, and packaging that delivers the core benefit to the customer.

Augmented product

Represents additional services or benefits of the actual product.

Brand

The name, term, sign, or design, or a combination of these, that identifies the maker or seller of a product or service.

Packaging

Involves designing and producing the container or wrapper for a product.

Label

Identifies the product or brand, describes attributes, and provides promotion.

New Product Development

Refers to original products, product improvements, product modifications, and new brands developed from the firm's own research and development.

Price

The amount of money charged for a product or service, representing the sum of all values that consumers exchange for the benefits of having or using the product.

Market-Skimming pricing

Strategy with high initial prices to 'skim' revenue layers from the market.

Market-Penetration pricing

A low initial price in order to penetrate the market quickly and deeply to attract a large number of buyers quickly to gain market share.

Distribution or Marketing Channel

A set of independent organizations that help make a product or service available for use or consumption by the consumer or business users.

Market Intermediaries

People or organizations that help get products to the final consumer, sometimes called middle men.

Direct Marketing Channel

Has no intermediary levels; the company sells directly to consumers.

Indirect Marketing Channel

Contains one or more intermediaries.

Intensive Distribution

A strategy used by producers of convenience products and common raw materials in which they stock their products in as many outlets as possible.

Exclusive Distribution

A strategy in which the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories.

Selective Distribution

A strategy when a producer uses more than one but fewer than all of the intermediaries willing to carry the producer's products.

Physical Distribution

Logistics is the management of moving goods and information from origin to consumer efficiently and profitably.

Retailing

Includes all the activities in selling products or services directly to final consumers for their personal, non-business use.

Specialty Stores

Carry narrow product lines with deep assortments within the product lines.

Department Stores

Carry a wide variety of product lines.

Convenience Stores

Carry a limited line of high-turnover convenience goods.

Superstores

Offer a large assortment of routinely purchased food products, non-food items, and services.

Discount Stores

Sell standard merchandise at lower prices by accepting lower margins and selling higher volume.

Direct Marketing

Selling your product directly to consumers.

Wholesaling

All the activities involved in selling goods and services to those buying for resale or business use.

Promotional Mix

The specific blend of advertising, public relations, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships.

Advertising

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Public Relations

Involves building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

Personal Selling

The personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.

Sales Promotion

The short-term incentives to encourage the purchase or sale of a product or service.

Sender

The party sending the message to another party.

Encoding

The process of putting thought into a symbolic form.

Message

The set of symbols the sender transmits.

Media

The communications channels through which the message moves from sender to receiver.

Decoding

The process by which the receiver assigns meaning to the symbols.

Receiver

The party receiving the message sent by another party.

Response

The reaction of the receiver after being exposed to the message.

Feedback

The part of the receiver's response communicated back to the sender.

Noise

The unplanned static or distortion during the communication process, which results in the receiver's getting a different message than the one the sender sent.

Rational Appeal

Relates to the audience's self-interest.

Emotional Appeal

An attempt to stir up positive or negative emotions to motivate a purchase.

Moral Appeal

Directed at the audience's sense of right and proper.

Advertising Objectives

A specific communication task to be accomplished with a specific target audience during a specific time.

Informative Advertising

Used when introducing a new product category; the objective is to build primary demand.

Persuasive Advertising

Important with increased competition to build selective demand.

Comparison Advertising

Directly or indirectly compares the brand with one or more other brands.

Reminder Advertising

Important with mature products to help maintain customer relationships and keep customers thinking about the product.

Reach

A measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time.

Frequency

A measure of how many times the average person in the target market is exposed to the message.

Samples

Offer a trial amount of a product.

Coupons

Certificates that give buyers a saving when they purchase specified products.

Contests, Sweepstakes, Games

Give consumers the chance to win something, such as cash, trips, or goods, by luck or through extra effort.

Direct-Mail Marketing

Involves an offer, announcement, reminder, or other item to a person at a particular address.

Business-to-Business (B2B)

Involves selling goods and services, providing information online to businesses, and building customer relationships.

Business-to-Consumer (B2C)

Involves selling goods and services online to final consumers.

Consumer-to-Business (C2B)

Involves consumers communicating with companies to send suggestions and questions via company websites.

Consumer-to-Consumer (C2C)

Occurs on the Web between interested parties over a wide range of products and subjects.