Market Segmentation and Targeting Strategies

What is market segmentation?

Grouping potential customers into segments that have common needs and respond similarly to marketing actions.

What are the business benefits of market segmentation?

Identification of unfulfilled needs, better product design, more targeted promotions, increased customer satisfaction.

What are the customer benefits of market segmentation?

Convenience and time savings, tailored products and services, relevant offers, personalized experience.

What are the four main ways to segment a market?

Demographics, Geographics, Psychographics, Behavioral.

What does behavioral segmentation include?

Purchase behavior, usage, recency, frequency, loyalty, profitability.

What is targeting in marketing?

Evaluating segments and selecting one or more to pursue with a tailored marketing program.

What are the criteria for selecting target segments?

Market size, expected growth, competitive position, cost to reach, company fit.

What is positioning?

How a brand is perceived in the minds of consumers based on perceived benefits vs. perceived costs.

What is the formula for value in positioning?

Value = perceived benefits - perceived costs.

What are the key elements of a positioning statement?

Target market, value, evidence, competitive set.

What is a product?

Anything offered to a market to satisfy a need or solve a problem; includes tangible goods and intangible services.

What are the four characteristics of services?

Intangibility, Inseparability, Inconsistency, Inventory.

What are the steps in the new product development process?

Strategy development, idea generation, idea screening, business analysis, product development, test marketing, product launch.

What are common reasons for new product failures?

Insignificant differences, incomplete research, unmet needs, bad timing, poor marketing, poor quality.

What is a point-of-difference (POD)?

Unique attribute or benefit strongly associated with a brand.

What is a point-of-parity (POP)?

Attributes shared with other brands, necessary but not unique.

What are the stages of the Product Life Cycle (PLC)?

Introduction, Growth, Maturity, Decline.

What marketing strategy is used during the Maturity stage of PLC?

Reminder marketing to keep customers engaged with fun and exciting ads.

What are two choices for products in the Decline stage?

Discontinue the brand or reposition it.

What is brand equity?

The added value a brand name gives beyond the product's benefits.

Why is brand equity important?

It gives competitive advantage and allows higher pricing.

What is brand personality?

Human characteristics associated with a brand.

What does pricing equal in marketing?

Pricing equals perceived value, not real value.

Why can luxury brands charge high prices?

Because they are perceived as high value and luxury.

What are the three steps before deciding pricing strategy?

Define goal, conduct market pricing analysis, analyze target audience.

What is the decoy effect in pricing?

Making one option seem more valuable by comparison to a higher-priced one.

What is anchoring in pricing?

Showing original prices to highlight how much you save.

What is bait and switch?

Luring customers with a deal but convincing them to buy a higher-priced product.

What is Integrated Marketing Communication (IMC)?

Coordinating all promotional activities to provide a consistent message to all audiences.

What are the goals of promotion?

Awareness, information, shaping attitudes, and driving action.

What is product advertising?

Advertising focused on selling a specific product or service.

What is institutional advertising?

Advertising aimed at building a company's image.

What are the three types of product advertising?

Pioneering (informational), Competitive (persuasive), Reminder.