MRKTNG 3000 1nd Edition Lecture 4Outline of Last LectureI. Chile vs. Chinaa. Discussion questions Outline of Current Lecture II. Market Segmentationa. Typesi. Demographicii. Geographiciii. Psychographic iv. Geodemographicv. Purchase behaviorvi. Loyaltyvii. User statusviii. BenefitIII. Market targetinga. Approachesi. Massii. Nicheiii. DifferentiatedThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.iv. Individualized IV. Positioning Current LectureSteps in market segmentation, targeting, and positioningMarket segmentation market targetingmarket positioning Market segmentation: process of dividing the total market for a good or service into several smaller, internally homogenous groupsSegmentation process:1. Identify segmentation variables and segment the marketa. Involves knowledge of consumer behavior and marketing research 2. Develop profiles of resulting segmentsWhy segment? Segmentation is necessary because customers in a market have:-Differences in buying habits-Differences in the way the good or service is used-Different motives for buying -Marketing focuses on/serves/exploits individual differencesMarket segmentation allows managers to:-Visualize their prospective customers in designing a marketing mix-Concentrate their resources on only one or a few market segments-When should you practice segmentation? Always segment. Market segmentation- TypesDemographic (age, gender, ethnicity, income, education, occupation, family type, marital status)Geographic (nation, region, urban/rural, regional, climatic)Psychographic (attitudes/lifestyles)Geodemographic based on zip codes demographic information based on zip codesPurchase behavior- usage (light, medium, or heavy users)Loyalty status- (brand loyal or variety seekers)User status- user vs. nonusers, former usersBenefit- importance of a particular product benefit Market targeting:Approaches:-Mass marketing (no segmentation)-One product for all customers-Niche marketing-One product for one segment -Differentiated marketing-Multiple products for multiple segments-Individualized marketing -Customizing product/service for individual Substantial- Size matters, too small and it is insignificant, not profitable Reachable- Be able to communicate and distribute to peopleResponsive- customers must react positively to firm’s offering, move toward the firm’s products/services, and accept the firm’s value proposition Effective segmentation and targeting leads to profitability:Identifiable+ substantial+ reachable+ responsive=profitable Positioning:Categories-Hierarchical order of categories-Lowest to highest Category membership-Statement of membership important:-For new product-To show that brand belongs Points of difference:-How is the brand superior to others?-Benefits selected-Strongest positions where the brand has point of difference on main benefit-Small brands find niches -Stress one benefit in the promotion-Correlational inferences Goal positioning:Brand essence-Abstracted benefits that relate to consumer goal-Laddering up (personality dimensions)-Laddering down (show reason to believe a benefit in order to enhance competitive-based