Chapter 7 wants in modern society Market Fragmentation creation of consumer groups due to a diversity of distinct needs and Target Marketing Strategy dividing total market into segments on basis of customer characteristics and developing products to meet needs of those segments Segmentation divide larger market into smaller pieces based on similar characteristics Segmentation Variables dimensions that divide market into homogeneous groups each with different needs and preferences Ways to Segment o Demographics o Psychographics o Behavior ethnicity etc priorities Generation Y born between 1979 and 1994 Demographics statistics that measure observable aspects of a population size age gender Generational Marketing marketing to specific generation people who share same outlook or Generation X consumers born between 1965 and 1978 Baby Boomers born between 1946 and 1964 Metrosexual straight urban male who is interested in fashion home care etc Steps in Target Marketing Process o 1 Segmentation identify market segments o 2 Targeting evaluate segments and decide which to go after o 3 Positioning develop marketing mix that will create a competitive advantage in eyes of target market Cultural Diversity management practice to create diverse employees customers suppliers etc Geodemography segmentation technique that combines geography with demographics Geocoding Customizing web advertising so people in different places see different ads Psychographics use of psychological sociological and anthropological factors to construct market segments i e shared interests opinions activities AIOs VALS Values and Lifestyle psychographic system that divides the entire US population into eight segments Segment by Behavior technique that divides consumers into segments based on how they act feel or use a good 80 20 Rule 20 of purchasers account for 80 of a product s sales Long Tail sell small amount of items that only a few people want provided they sell enough different items Usage Occasions indicator used in behavioral market segmentation based on when consumers use a product most Targeting evaluate attractiveness of each segment and divide which to invest resources in Target Market market segments which org focuses marketing plan towards Undifferentiated Targeting Strategy appealing to broad spectrum of people Differentiated Targeting Strategy developing one or more products for each distinct customer Segment Profile description of typical customer in a segment group and keep offerings separate in market place Concentrated Targeting Strategy focusing a firm s effort on offering one or more products to a Custom Marketing Strategy approach that tailors specific products and messages about them to single segment individual customers Stages in Positioning o 1 Analyze competitors positions o 2 Offer good service with a competitive advantage o 3 Finalize marketing mix o 4 Evaluate responses and modify as needed Mass Customization approach that modifies a basic good or service to meet the needs of an Positioning develop a marketing strategy to influence how a particular market segment o Repositioning redoing a product s position to respond to marketplace changes Retro Brand once popular brand that has been revived to experience a popularity comeback Brand Personality distinctive image that captures a good s or service s character and benefits Perceptual Map technique to visually describe where brands are located in consumers minds individual perceives a good or service riding a wave of nostalgia relative to competitors single brand CRM systematic tracking of consumers preferences and behaviors o Share of a customer percentage of an individual customer s purchase of a product that is a o Lifetime value of a customer potential profit a single customer s purchase of a firm s products generates over the customer s lifetime o Customer equity financial value of a CR throughout the lifetime of the relationship Chapter 8 Good tangible product Attributes features functions benefits and uses of a product Core Product benefits product will provide for consumers Actual Product physical good or service that supplies the desired benefit Augmented Product actual product plus other supporting features such as warranty credit delivery installation repair etc Durable Goods provide benefits over long period of time cars furniture appliances Nondurable goods provide benefits for short time b c they are consumed or no long used food newspapers etc Consumer milk bread o Convenience Product consumer good service that is usually low priced widely available Staple Product basic or necessary items milk bread gas Impulse Products buy on the spur of the moment magazine Emergency Products we purchase in dire need bandages umbrellas o Shopping Products spend significant time effort to gather info explore alternatives before purchasing laptops Intelligent Agents Shopbots computer programs that find sites selling a particular product o Specialty Products goods services that has unique characteristics and is important to buyer will devote effort to acquire Roomba vs vacuum Rolex watches Big Bertha golf clubs o Unsought Products customer has little awareness or interest in product until need is brought to his her attention college students retirement plans disability insurance Businesses o Equipment expensive goods that org uses in daily ops o MRO businesses consume in short time operating supplies o Raw Materials natural products purchased to use in finished products o Processed Materials products created when raw materials transformed o Component Part manufactured goods subassemblies of finished items Innovation product that consumers perceive to be new and different from current products o Continuous Innovation modification of existing product that sets brand apart Knockoff new product that copies with slight modification an original product o Dynamically Continuous Innovation change in existing product that requires a moderate amount of learning or behavior change new iPods Convergence coming together of 2 technologies to create new system with greater benefits than just separate parts o Discontinuous Innovation totally new product that creates major changes in way we live invention of airplane car TV etc New Product Development NPD phases by which firms develop new product o 1 Idea Generation marketers brainstorm for products and provide customer benefits compatible with company mission o 2 Product Concept Development and Screening test