Unit III: Segmentation, Targeting and Positioning Vocabulary

Vocabulary flashcards covering core concepts, strategies, and key definitions from Unit III (Segmentation, Targeting, and Positioning).

Market Segmentation

The process of dividing a heterogeneous (aggregated) market into homogeneous (segregated) sub-units of consumers or business customers who exhibit similar requirements and buying characteristics.

STP

An acronym for Segmenting, Targeting, and Positioning, which represent the three sequential stages and fundamental pillars of modern marketing strategy.

W. Smith (1956)

The scholar considered to be the father of market segmentation, who originally introduced market segmentation as an alternative strategy to product differentiation.

Geo-demographics

A segmentation approach formed by combining geographic and demographic variables to classify customers according to location, country of birth, region, or geographical density.

Personal Demographics Segmentation

Dividing a market into distinct segments based on readily observable personal traits such as age, gender, ethnic origin, education, income, occupation, religion, family size, and family life cycle stage.

Generation Y

Also known as the millennial generation, generally defined as individuals born after 1980 who have grown up with technology and information at their fingertips.

ACORN

An acronym for 'A Classification of Residential Neighbourhood', a geodemographic segmentation tool that uses local housing and neighbourhood characteristics rather than individual traits as the basis for segmenting consumers.

Socioeconomic Segmentation

Categorizing populations according to social and economic factors such as income level, occupation grade, educational attainment, social class, and home or automobile ownership.

Behavioural Segmentation

Also referred to as product-related segmentation by David Kurtz, this method divides consumers based on purchasing patterns, usage rates, brand loyalty levels, benefits sought, purchase occasions, and readiness to buy.

Psychographic Segmentation

Segmenting buyers based on mental characteristics, personality traits, values, and lifestyle factors measured through activities, interests, and opinions (AIO).

Priori Variables

Also called identifier variables, these are predefined customer attributes known before research—such as age, sex, or education—that define who customers are.

Post-hoc Variables

Also called response variables, these are segmentation criteria derived after observing customer behaviors and choices—such as trade-offs between price and service quality.

Target Marketing

The strategic process of evaluating and selecting the most attractive consumer or business segments to serve based on organizational capabilities and resources.

Mass Marketing Strategy

Also known as undifferentiated marketing, a strategy where a firm offers a single product line with one standardized marketing mix to the entire market to achieve economies of scale.

Large Segment Strategy

A single-segment strategy where a firm focuses all of its limited marketing resources on one major segment that accounts for 50% or more of the market.

Adjacent Segment Strategy

A sequential growth strategy in which a firm, after achieving full penetration in an initial target segment, expands into a closely related segment.

Multi-Segment Strategy

Also termed differentiated marketing, a strategy where an organization targets multiple market segments simultaneously, designing tailored marketing mixes for each segment.

Small Segment Strategy

A targeting option where a business with limited resources chooses to serve only the smallest segment of a market, which is typically overlooked by larger competitors.

Niche Segment Strategy

Also called concentrated marketing, this strategy focuses on targeting a specific group of customers who seek specialized benefits, avoiding head-on competition with major market players.

Sub-Segment Strategy

Also known as micromarketing, a strategy involving further division within an established segment to serve specific unmet customer preferences.

Positioning

The act of designing an offering and brand image to occupy a distinctive, appealing, and valued place relative to competitors in the minds of targeted consumers.

Physical Positioning

Establishing a market position based strictly on objective, technical, and physical characteristics of a product.

Perceptual Positioning

Creating product differentiation based on customer perceptions shaped by brand presentation, user experience, celebrity endorsements, and social opinions rather than physical traits alone.

Waku Waku Doki Doki

A Japanese phrase referring to the adrenaline rush and pleasure from anticipation and thrill, used by Toyota as an emotional positioning concept for specific vehicle models.