Marketing Midterm 2

What is the STP process

1. Establish strategy or objectives

2. Use segmentation methods

3. Evaluate segment attractiveness

4. Select target market

5. Identify and develop positioning strategy

Step 1 of STP process

Derived from mission and objectives and consistent with SWOT

Example of step 1 STP process

Food marketers segment pasta sauce market into those who want sauce with or without meat

What are examples of geodemographic segmentation methods?

Country, region, areas within region, zip codes

What are examples of demographic segmentation methods?

Age, gender, income, education

What are examples of psychographic segmentation methods?

Lifestyle, self-concept, self-values

What are examples of benefit segmentation methods?

Convenience, economy, prestige

What are examples of behavioral segmentation methods?

Occasion, loyalty

When is geodemographic segmentation useful?

For companies whose products satisfy needs that vary by geographic area or for those who have a limited distribution range

What segmentation group is most common?

Demographic segmentation because it’s easy to identify and easy to measure

What variables drive behavior?

Income and lifestyle factors

When is benefit segmentation useful?

Dividing the market into segments whose needs and wants are best satisfied by the product’s benefits

What is occasion segmentation?

Based on when a product or service is purchased or consumed

What is loyalty or usage segmentation

Differentiate between heavy users and light users, those who often consume in the category vs. those who are more occasional users

What is an example of loyalty segmentation

Hotels, airlines, restaurants

How does segmentation help companies?

• Identify smaller, better-defined target groups

• Identify and understand key customer segments

• Reach customers more efficiently by tailoring market offerings and messages to customers’ specific needs

Movie theaters often have “matinee” pricing for early afternoon showings on weekdays. This is partially due to serving specific segments who may not otherwise choose to go to the theater. Which type of segmentation is the theater most likely using?

Behavioral segmentation

What 5 things does segment attractiveness contain?

1. identifiable

2. substantial

3. reachable

4. responsive

5. profitable

What are the 4 targeting strategies?

1. undifferentiated or mass marketing

2. differentiated

3. concentrated

4. micromarketing or one-to-one

What is undifferentiated marketing?

Targeting broadly, focus on common needs, design a product that will appeal to the largest number

What is differentiated marketing?

Target several market segments and design slightly different product offerings, most common type of targeting

What is concentrated marketing?

Go after a large share of one or few segments or niches, fine-tune products, prices to the needs of segments

What is micromarketing?

Targeting narrowly, tailor products and marketing programs to the needs and preferences of individual customers

What is market positioning?

Defining marketing mix variables so target customers have a clear, distinctive, desirable understanding of what the product does

What is value composition?

Communicates the customer benefits to be received from a product or service

What’s an example of a positioning statement?

For customers 50 years of age and higher, cheerios are a delicious breakfast option that are also good for them by improving

What should drive every decision in the marketing mix?

Positioning

Why should a brand not use the same exact positioning for two different target segments?

Positioning is segment specific, fails to address the unique needs and motivations

How do we know if our positioning is working?

When customers immediately understand your unique value, differentiate you from competitors, and see increased sales

What is a perceptual map?

It displays the position of products or brands in the consumer’s mind

What are the 6 steps to derive a perceptual map?

1. determine consumers’ perceptions and evaluations in relation to competitors’

2. identify the market’s ideal points and size

3. identify competitors’ positions

4. determine consumer preferences

5. select the position

6. monitor the positioning strategy

When sitting with a banker at a financial institution, they will often discuss the needs and tailor their products and marketing to your specific preferences. Which of the following targeting strategies is being used?

Micromarketing

What is geodemographic segmentation?

Uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers

Value and lifestyle survey

is a psychographic tool that classifies consumers into eight categories based on their answers to a questionnaire

What are the three primary motivations?

Ideals, achievement, and self-expression

Who is motivated by ideals?

Thinkers and believers

Who is motivated by achievement?

Achievers and strivers

Who is motivated by self-expression?

Experiencers and makers

What are three circles for a successful value proposition?

Competitive offering, customer needs and wants, and company offering

What does the overlap of customer needs and wants and company offerings mean?

Value proposition