ch8- market segmentation, targeting, and positioning

market segmentation

dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes

product differentiation

marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products

three segmentation strategies

1. one product and multiple market segments (ex: books)

2. multiple products and multiple market segments (ex: cars)

3. segments of one- “mass customization” (ex: tailor products to individuals)

target marketing strategies

undifferentiated, differentiated, concentrated

target marketing strategies- undifferentiated

mass market, mass production, one size fits all, one product and multiple segments (ex: books)

target marketing strategies- differentiated

well defined markets, different approach for each segment, multiple products and multiple market segments (ex: cars)

target marketing strategies- concentrated

single market, one approach, niche and micro, mass customization, segments of one “mass customization” (ex: tailor products to individuals)

forming a market product grid

horizontal rows= markets

vertical columns= products

5 steps in segmenting and target markets that link market needs to a firms marketing program

1. group potential buyers into segments

2. group products to be sold into categories

3. develop a market-product grid and estimate size of markets

4. select target markets

5. take marketing actions to reach target markets

segmenting and targeting markets- step 1: group potential buyers into segments

simplicity and cost effectiveness

potential for increased profit

similarity of needs of buyers in segment

difference of needs of buyers among segments

potential of marketing action to reach segment

positioning

the place the product occupies in consumers minds relative to competing products

typically defined by consumers on the basis of important attributes

positioning: 2 approaches

1. head-to-head positioning

2. differentiation positioning

product differentiation

a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products

positioning the product

1. identify important attributes for a product or brand class

2. discover how customers rate competing products or brands on these attributes

3. discover where the companys product or brand is on these attributes in minds of customer

4. reposition on the companys product or brands in the minds of consumers

perceptual map

displaying in 2 dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm’s own product or brand

product repositioning

changing the place a product occupies in a consumer’s mind relative to competitive products