MKT 300 Susan Fant Marketing Study Guide for Test 2 Chapters 7 8 9 10 and 12 Chapter 7 Customer Driven Marketing Strategy Market segmentation dividing a market into smaller segments of buyers with distinct needs characteristics or behaviors that might require separate marketing strategies or mixes Market targeting targeting evaluating each market segment s attractiveness and selecting one or more segments to enter Differentiation differentiating the market offering to create superior customer value Positioning arranging for a market offering to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers Geographic segmentation dividing a market into different geographical units such as nations states regions counties cities or even neighborhoods Demographic segmentation divides the market into segments based on variables such as age life cycle stage gender income occupation education religion ethnicity and generation Age and life cycle stage segmentation divides a market into different age and life cycle groups Gender segmentation divides a market into different segments based on gender Income segmentation divides a market into different income segments Psychographic segmentation divides a market into different segments based on social class lifestyle or personality characteristics o Ex Dunkin Donuts o Marketers also use personality variables to segment markets o Marketers sometimes refer to brand focused psychographic segments as brand tribes communities of core customers with shared characteristics brank experiences and strong affinities for a particular brand Behavioral segmentation divides a market into segments based on consumer knowledge attitudes uses of a product or responses to a product Occasion segmentation dividing the market into segments according to occasions when buyers get the idea to buy actually make their purchase or use the purchased item Benefit segmentation dividing the market into segments according to the different benefits that consumers seek from the product Using multiple segmentation bases 19 levels of affluence Segment International Markets o Multiple segmentation is used to identify smaller better defined target groups o Experian s Mosaic USA system classifies U S households into one of 71 lifestyle segments and MKT 300 Susan Fant Geographic location Economic factors Political and legal factors Cultural factors Intermarket cross market segmentation forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries Requirements for Effective Segmentation Measurable Accessible Substantial Differentiable Actionable Target market a set of buyers who share common needs or characteristics that the company decides to serve Undifferentiated mass marketing a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer o Focuses on common needs rather than what s different Differentiated segmented marketing a market coverage strategy in which a firm decides to target several market segments and designs separate offers for each o Goal is to achieve higher sales and stronger position o More expensive than undifferentiated marketing Concentrated niche marketing a market coverage strategy in which a firm goes after a large share of one or a few segments or niches o Limited company resources o Knowledge of the market o More effective and efficient specific individuals and locations Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of o Local marketing involves tailoring brands and promotion to the needs and wants of local customer segments Cites neighborhoods and stores o Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers Also called one to one marketing or mass customization Product position the way the product is defined by consumers on important attributes Positioning maps show consumer perceptions of marketer s brands versus competing products on important buying dimensions MKT 300 Susan Fant o o Competitive advantage is an advantage over competitors gained by offering consumers greater value either through lower prices or by providing more benefits that justify higher prices o Product o Services o Channels o People o Image o A difference to promote should be Important Distinctive Superior Communicable Preemptive Affordable Profitable Value proposition the full positioning of a brand the full mix of benefits on which it is positioned Positioning statement summarizes company or brand positioning using this form To target segment and need our brand is concept that point of difference Chapter 8 Products Services and Brands Product anything that can be offered in a market for attention acquisition use or consumption that might satisfy a need or want MKT 300 Susan Fant Service a product that consists of activities benefits or satisfactions and that is essentially intangible and does not result in the ownership of anything Consumer products products and services bought by final consumers for personal consumption o Convenience products o Shopping products o Specialty products o Unsought products Convenience products consumer products and services that the customer usually buys frequently immediately and with a minimum comparison and buying effort o Ex newspapers candy fast food Shopping products less frequently purchased consumer products and services that the customer compares carefully on suitability quality price and style o Ex furniture cars appliances Specialty products consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort o Ex medical services designer clothes high end electronics Unsought products consumer products that the consumer does not know about or knows about but does not normally think of buying o Ex life insurance funeral services blood donations Industrial products those products purchased for further processing or for use in conducting a business o Material and parts raw materials and manufactured materials and parts o Capital items industrial products that aid in the buyer s production or operations o Suppliers and services operating supplies repair and maintenance items and business services Organization marketing consists of activities