Marketing Test II Ch 9

• Separate the market into smaller, more homogenous segments: Groups with simelar needs will react simelarly to a marketing action
• Specifically target discrete market segments: chevy corvette = speed; chevy malibu = MPGs (same company, different markets
• Position the product or service to appeal to the targeted segments: In class group excercise

• Aggregate consumers into groups (segments) that have similar needs and will react similarly to a marketing action.
• Market Segmentation links market needs to an organization's marketing program

• Similarity of needs of potential buyers within a segment --> minivan drivers for parents; SUV for trunk-space
• Difference of needs of potential buyers among segments
• Simplicity and cost of assigning potential buyers to segments --> Menthol & Normal Cigarette users, Simelar products therefore no need to change strategy.
• Segment must have enough potential for increased profit and ROI
• Feasilibility of reaching a chosen segment with a particular marketing action
• Potential profit --> not enough people play squash
• to make a specific shoe just for them, lump them into tennis shoes

• Most powerful is benefits: I need a tarter control tooth paste b/c I have a lot of cavities
• Lifestyles: individuals interest, activities, often shaped by time and money; busy student trying to multi task, single serving meals ready made at central market
• Personalities: aggressive, ruggedness, outdoorsy for psychographic
• Commit levels: switcher (susceptible to marketing actions like price reductions and coupons, hard to make brand loyal) or variety seekers, consumer that gets board easier, emergent consumers (based upon lifecycle, graduations, marriage, new baby)
• Often: use more than one variable for
• segmentation

• 1. Age
• 2. Gender -- magazines/deoderent
• 3. Family Size
• 4. Race
• 5. Marital Status
• 6. Income --> Wal-mart --> middle class --> target; cost-co
• 7. Education
• 8. Occupation

Geographic segmentation --> eg. Bug Killer; segregated markets by bugs & targeted individuals, therefore saw huge increase in market share in 16/18 markets

• 1. Country
• 2. Region
• 3. City
• 4. Climate
• 5. Population Density

Olive Garden --> Has different sauces in Northern v. Southern Locations

• - Behavioral: - Heavy/medium/light users
• - Nonusers
• - Brand-loyal Users
• - Switchers/Variety Seekers
• - Emergent Consumers

• Which variable(s) can be used to segment the markets for each of these products?:
• - recreational vehicles
• - Hotel Rooms
• - Restaurants
• - Magazines
• - Movies
• - Air Passanger Routes

• Size of segment: depends on size of corporation - the bigger corporation the bigger the size of the market needed
• Expected growth of segment: If I go after a high growth segment, I better becareful b/c it could be a fad and it takes a lot of money b/c there are a lot of competitors
• Competitive position: Cheerios knew that if they didn’t come out with a sugary cereal someone else would
• Cost of reaching the segment: Can you access the segment in a price range you can afford
• Compatibility with the organization's objectives and resources: Even if McDonald’s found out that the fastest growing restaurant category was fine dining they would go into that business because it is not party of their objectives or who they are as a business

• The place of a product, group of products, and/or brand occupies in consumers' minds on important attributes relative to competitive products
• - Based on substantive brand value
• - Memorable AND Distinctive

• Define the product for consumers
• Help consumers remember the product
• Must communicate product attributes that are relevant to consumers and that differentiate it from competition --> positioning must be believable and sustainable

• Attribute: A product is associated with an attribute, product feature, or customer benefit.
• Price & Quality: This positioning base stresses high price as a signal of quality or
• emphasizes low price as an indication of value.
• Use or Application: The product is
• positioned in terms of time and/or place of use or how the product is actually
• used.
• Product User: This positioning base focuses on a personality or type of user.
• Product Class: A product is associated with a particular category of products.
• Competition: : A product is positioned directly against or away from one or more
• competitors.

• Defined: Changing the place an offering occupies in a consumer's mind relative to competitive products
• -used to revive an ailing brand
• --> bc the original position may be obsolete
• -fix a new market entry (positioning is unclear/confusing)
• -The Challenge: Changing perceptions of a brand forged over years of advertising

A key to positioning a product or brand effectively is the perceptions of the company. A Perceptual Map is a means os displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands and then take marketing action.

• The place a product, group of products, and/or brand occupies in consumers's minds on important attributes relative to competitive products
• - Based on substantive brand value
• - Memoable AND distinctive

• 1. Define the product for consumers
• 2. Help consumers remember the product
• 3. Must communicate the product attributes that are relevant to consumers and that DIFFERENTIATE it from competition
• - positioning must be believeable and sustainable

Positioning is Perceptual: What do customers think or feel?