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What is Market Fragmentation?
Peoples diverse interest and backgrounds divide them into numerous groups with distinct needs and wants.
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What is Market Segmentation?
Guides companies in tailoring their product offerings to groups most likely to purchase.
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What is the basic process to find your Target Market?
- Segmentation
- Targeting
- Positioning
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What is Segmentation?
Dividing larger market into smaller pieces based on shared characterstics
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What are the 3 ways to segment?
- Demographics
- Psychographics
- Behavior
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What are the 3 ways to choose a Segmentation Variable?
- Low risk decisions
- Moderate risk decisions
- High risk decisions
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What are considered Low Risk Decisions?
Buying and usage behavior, price sensitivity, and brand loyalty are important
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What are considered Moderate Risk Decisions?
Consumer needs, lifestyles and social status are important.
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What are considered High Risk Decisions?
Focus on core values and beliefs relating to the buying decision
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What is Targeting?
After evaluating the attractiveness of each segment, you must decide which groups to pursue.
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What is Mass Marketing?
When it sometimes doesn't make sense to separate out specific groups of customers
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What evaluating segments, what are the Usable Segments?
- Substantial
- Reachable
- Responsive
- Reflect company strategies
- Accommodate market shifts
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What are different Segmentation Strategies?
- Undifferentiated or Mass Marketing
- Differentiated
- Concentrated
- Custom
- Mass Customization
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What is Positioning?
Strategy to influence how a particular segment perceives the brand relative to the competition
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What are the 4 stages in Positioning?
- Analyze competitors
- Define competitive advantage
- Match mix to the target
- Evaluate target's response
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How does segmentation relate to the company's strategy?
Which strategic decisions will have the greatest beneficial influence on segments.
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How does segmentation relate to customer-driven profits?
Identifying which segments yield the greatest profits short and long term.
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How does segmentation relate to buying decisions?
Experimenting with different traits and values of consumers to study in order to gain the best perspective of their needs.
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How does segmentation relate to customers?
Using simulations to predict and follow actual purchasing decisions and actions made by customers.
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How does segmentation relate to senior management?
Top executives need to understand the data being communicated and why consumers are segmented a certain way since they have the final say on any business decisions.
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How does segmentation relate to change?
Effective segmentation focus on just one or two issues, and they need to be redrawn as soon as they have lost their relevance.
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What is the advantage of Business to Business (B2B) segmentation over Business to Consumer?
Available access to financial statements and spending history.
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What is the disadvantage of Business to Business (B2B) segmentation over Business to Consumer?
There is a lack of inner feelings and instinctual reasons a corporation may make a purchase.
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Why can't marketing and selling always go side by side?
- Marketing is as much exclusion as inclusion and you can't always sell to everyone.
- There are people that you don't want to sell to.
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In Selling to the Moneyed Masses, what was the main revelation on mass marketing products?
There's an untapped group of consumers somewhere between middle and upper class that can be mass-marketed new products based on a new definition of affordable premium quality.
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What is the Trickle-Up Effect?
This effect states that since their are new premium products, they could attract attention of upper class consumers allowing them to keep more money in their pockets and spend on even MORE extravagant purchases.
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What are Psychographics?
- The use of psychological sociological, and anthropological factors to construct market segments.
- Example: Harleys vs Hippies
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What is an example of Behavior differences in segmentation?
Heavy users vs light users
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What are demographics?
- Statistics about the population
- Tell you values and what they find important
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What are common demographics in segmentation?
- Age
- Gender
- Life Cycle
- Income
- Social Class
- Race/Ethnicity
- Place of Residence
- Generation
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What is a Differentiated targeting strategy?
Using a different marketing mix per segment
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What is a Concentrated targeting strategy?
Focusing in on only one segment
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What is a Custom targeting strategy?
Each customer represents a segment.
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What is a Mass Customization targeting strategy?
The illusion of customization by allowing customers to choose from predetermined options.
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What is Categorical segmentation equivalent to in businesses?
Demographics
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If creating a new product, what can a Perceptual Map tell you?
- Where competitors are
- What areas are NOT covered
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