Chapter 7

Market Fragmentation

The creation of many consumer groups due to a diversity of distinct needs and wants in modern society

Target Marketing Strategy

Dividing the total market into different segments on the basis of customer characteristics

Segmentation

Process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics

Oversegmentation

marketing malady that occurs when consumers may become confused if an organization offers too many choices

Segmentation Variables

Dimensions that divide the total market into fairly homogenous groups, each with different needs and preferences

Generational Marketing

Marketing to members of a generation, who tend to share the same outlook, values, and priorities

Gen Z

Group of consumers born after 1994

Digital Natives

Individuals who spend a big chunk of their time online

Gen Y (Millennials)

Group of consumers born between 1979 and 1994

Gen X

Group of consumers born between 1965 and 1978

Baby Boomers

Group of consumers born between 1946 and 1964

Gender Identity

The personal sense of one’s own gender that may or may not correlate with a person’s assigned sex at birth

Androgyny

The possession of both masculine and feminine traits

Gender-bending Products

traditionally sex-typed items adapted to the opposite gender

Me Too Movement

A movement against sexual harassment and sexual abuse of women that went viral on social media

Buying Power

Concept in segmentation that can help marketers to determine how to better match different products and versions of products to different consumer groups based on an understanding of what discretionary and nondiscretionary allocations of funds they are able to make

Content Marketing

Strategy of establishing thought leadership in the form of bylines, blogs, commenting opportunities, videos, sharable social images, and infographics

Cultural Diversity

A management practice that actively seeks to include people of different sexes, races, ethnic groups, and religions in an organization’s employees, customers, suppliers, and distribution channel partners

Geographical Segmentation

An approach in which marketers tailor their offerings to specific geographic areas because people’s preferences often vary depending on where they live

Geographic Information System (GIS)

A system that combines a geographic map with digitally stored data about the consumers in a particular geographic area

Geodemography

Segmentation technique that combines geography with demographics

Geotargeting

Marketing to a set of specific users based on their current real-time location

Micromarketing

The ability to identify and target very small geographic segments that sometimes amount to individuals

Psychographics

The use of psychological, sociological, and anthropological factors to construct market segments

VALS

A psychographic segmentation system that divides U.S. adults into eight groups according to what drives them psychologically as well as by their economic resources

Gamer Segment

A consumer segment that combines a psychographic/lifestyle component with a heavy dose of generational marketing

Badge

A milestone or reward earned for progressing through a video game

Behavioral Segmentation

A technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service.

80/20 Rule

A marketing rule of thumb that 20 percent of purchasers account for 80 percent of a product’s sale

Customer Loyalty

A customer’s low likelihood of switching to a competitor’s offering, especially because of being highly engaged and connected with their current brand.

Customer Stickiness

Highly cultivated customers who are likely to follow through on an intended purchase, buy the product repeatedly, and recommend it to others

Experiential Loyalty

Customer loyalty that results not just in increased purchases but also in an enhanced broader experience for the customer

Usage Rate

A measurement that reflects the quantity purchased or frequency of use among consumers of a particular product or service.

Long Tail

A new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items

Usage Occasions

An indicator used in behavioral market segmentation based on when consumers use a product most

Organizational Demographics

Organization-specific dimensions that can be used to describe, classify, and organize different organizations for the purpose of segmenting business-to-business markets

Segment of One

Tracking the activity and preferences of a single potential customer and then tailoring products or ads for that individual according to their behaviors

Targeting

A strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers

Target Market

The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts

Segment Profile

A description of the “typical” customer in a segment

Personas

Fictional characters created by marketers that represent different key potential user types for an offering

Undifferentiated Targeting Strategy

Appealing to a broad spectrum of people

Differentiated Targeting Strategy

Developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace

Concentrated Targeting Strategy

Focusing a firm’s efforts on offering one or more products to a single segment.

Customized Marketing Strategy

An approach that tailors specific products and the messages about them to individual customers

Mass Customization

An approach that modifies a basic good or service to meet the needs of an individual.

Positioning

Developing a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition

Direct Competitors

Competitors whose offerings are very similar to yours

Indirect Competitors

Competitors whose offerings are different from yours but potentially could provide the same benefits and satisfy the same customer needs as your offerings do

Positioning Statement

An expression of a product’s positioning that is internally developed and maintained in order to support the development of marketing communication that articulates the specific value offered by a product

Repositioning

Redoing a product’s position to respond to marketplace changes

Retro Brands

A once-popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia

Perceptual Map

A technique to visually describe where brands are “located” in consumers’ minds relative to competing brands

Neglected Segment

An unserved or underserved market segment for which opportunity may exist for a new product entry