L5 Segmentation Targeting & Positioning Flashcards Preview

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Flashcards in L5 Segmentation Targeting & Positioning Deck (28)
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1
Q

STP: defs

A
  • Market segmentation = Dividing a market into distinct homogeneous groups of buyers with different needs, characteristics, or behavior, who might require separate products and Marketing-Mixes.
  • Targeting = The process of identifying each market segment’s attractiveness and selecting which segments to enter.
  • Positioning = Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers.
2
Q

Why segment?

5 reasons

A

t.h.i.s.d.

  • Heterogeneity of customer needs and wants
  • Differences in customer buying power and potential CLV
  • Individualization in consumer behavior
  • Targeted communication
  • Advantages through specialization
3
Q

How to segment? 5 properties of a good segmentation

A

MASDA:

  • Measurability: The degree to which the size, purchasing power and profiles of a market segment can be measured.
  • Accessibility: The degree to which a market segment can be reached and served.
  • Substantiality: The degree to which a market segment is sufficiently large and profitable.
  • Differentiability: The degree to which a market segment is conceptually distinguishable and responds differently to a different marketing mix.
  • Actionability: The degree to which effective programs can be designed for attracting and serving a given market segment.
4
Q

segmentation by consumer markets:

meaning

4 advantages & 2 disadvantages

A

= geographical

4 Advantages

  • Effective for large national and international companies, because geogrpahic segmentation helps the companies target the different needs and wants of customers in different regional areas
  • Effective for small companies with limited budget, because they can focus on specific geogrpahical areas
  • Works well with population densities (e.g. urban, suburban, rural), because customers tend to be really different in cities on the country
  • It is easy to break a marked down into different geographical areas

2 Disadvantages

  • Limited technique, because it assumes that all customers in a specific geographical area have similar needs and wants
  • Thus, geographical segmentation should be used in combination with another segmentation technique
5
Q

segmentation by socio-demographic criteria:

def

2 Advantages & 3 Disadvantages

A

according to age, race, religion, gender, family size, ethnicity, income, education, and socio-economic status: data available from address brokers
+ media-data often structured according to socio-demographics.

2 Advantages

  • Information you need is available (census data) in order to segment your customers
  • Customer retention and loyalty (if companies spend time to identify customers’ wants and needs, customers usually come back)

3 Disadvantages

  • Competitors try to use same marketing techniques and potentially take away customers
  • Potentially misleading, because socio- demographic twins can have really different lifestyles
  • Very little understanding of the customers themselves
6
Q

segmentation by psychographic variables:

3 main elements

2 advantages

2 disadvantages

A

based on social class, lifestyle, or personality characteristics

  • Needs, wants, attitudes, preferences, individual value system/ personality, lifestyle

2 Advantages

  • Better insight into customer as a person
  • In return, this technique results in more valid and responsive segments and subsequent marketing programs

2 Disadvantages

  • This technique requires detailed consumer data
  • Concerns with data interpretation, accessibility in real life?
7
Q

benefit segmentation def=

  • eg
  • 2 advantages & 3 disadvantages
A

segment based on the different benefits sought by different customers

  • e.g. price-conscious segment vs. brand- conscious segment vs. quality-conscious segment

2 Advantages

  • Effective for companies whose products have unique features
  • Effective for large companies who want to create multiple market segments in order to reduce rivalry

3 Disadvantages

  • Potential lack of innovation due to too much reliance on benefit sought
  • Marketing research required
  • Target group is difficult to reach
8
Q

segmentation by behavioral variables:

  • examples
  • 1 Advantage & 3 Disadvantages
A

based on behavioral variables such as:

  • Occasions
  • User status (non-user, ex-user, potential user, first-time user, regular user)
  • Usage rate (light, medium, heavy user)
  • Loyalty status
  • Up-buying, cross-buying behavior

1 Advantage

  • Adopted in mature markets: how to activate non-user, target switchers, convert a medium user to a heavy user

3 Disadvantages

  • Low understanding of market: fails to consider the reason why consumers buy the product
  • Reliance on data bases for experimentation
  • Possible only for existing customers
9
Q

typical steps to produce a segmentation: 4

A
  • Desk research – What data / studies are available already? e.g. National Statistics, studies published by consulting firms: not specific enough, but useful start
  • Qualitative market research e.g. focus groups, shop-alongs, in-depth interviews to get first insights
  • Quantitative market research e.g., online or telephone survey to test and quantify findings
  • Cluster analysis on the basis of the factor solution to find groups of participants with very similar answer patterns = segments
10
Q

clusters def=

A
  • relatively homogeneous groups
    • ideally, objects in each cluster are similar to each other and dissimilar to objects in other clusters
11
Q

Organizational markets

  • 2 aka
  • 2 similarities w consumer markets
  • 3 differences w consumer markets
A
  • aka business markets, B2B
  • Similarities w consumer markets
    • Individuals assume buying roles
    • Purchase decisions are made to satisfy needs
  • Differences w consumer markets
    • Market structure and demand
    • Nature of the buying unit
    • Types of decisions and the decision process
12
Q

B2B vs B2C: 3 differences in market structure & demand

A
  • Fewer and larger buyers
    • Buyers can at times be competitors as well
  • Derived demand:
    • Business demand ultimately derives from the demand for consumer goods
    • Technology Push vs. Market Pull
  • Inelastic and more fluctuating demand:
    Total (short-term) demand for many business products is not affected by price changes
13
Q

nature of the buying unit

  • aka
  • 5 constituents
  • 5 roles for mkting profiling
A
  • aka buying group
  • cross-functional: representatives from
    • purchasing
    • production
    • materials mgmt
    • finance
    • corp & marketing planning
  • roles for mkting profiling:
    • user
    • buyer
    • decider
    • influencer
    • gate-keeper
14
Q

B2B purchasing decision process:

4 types

special features

A
  • new order
  • straight rebuy
  • modified order
  • buying a packaged solution

a big new order may involve a complex process w multiple stages such as search, solicitation of multiple offers, assessment, post-purchase evaluation…

15
Q

Targeting

2 steps w how

A
  • evaluating market segments
    • 5-forces analysis + CLV
    • estimation of customer equity
  • selecting market segments
    • choose scope
    • choose coverage approach
16
Q

selecting market segments:

3+1 ways to choose coverage, from broad to narrow scope

w advantages & disadvantages

A

undifferentiated (mass)

  • 1 size fits all
  • *advantages**:
  • no need for extensive research
  • low cost
  • *disadvantages:**
  • difficult to satisfy all customers
  • fierce competition
  • differentiated (mass)*
  • Targeting several segments and designing separate offers for each

advantages:

  • Meeting specific needs
  • Higher sales and strong position

disadvantages:

  • Resource-intensive product development and marketing
  • Higher costs
  • concentrated (niche)*
  • Resources of a firm are focused on a well-defined marketing niche or segment
  • *advantages:**
  • Strong market position in attractive markets
  • “foot-in-the-door”

disadvantages:

  • High risk due to reliance on a single market niche only
  • micromarketing (local or individual)*
17
Q

IT targeting

def w 3 elements

+ 3 pros & 4 cons

A

different versions based on geo-behavioral targeting (geographical location + device/OS + source e.g. google/fb)

3 Pros

  • Allow advertisers to reach more people than traditional advertising media
  • Low costs
  • Eliminate „wasted“ advertising to consumers whose preferences do not match products‘ attribute

4 cons

  • Data privacy concerns
  • Increase of ignoring internet advertising by web users due to large spam amounts
  • Marketing materials are automatically available for anyone to copy
  • Ad blockers
18
Q

Value proposition def=

4 Cs

A

Value proposition = the full positioning of a brand, i.e., the full mix of benefits on which it is positioned
4Cs CrClCoCo

  • clarity
  • consistency
  • credibility
  • competitiveness
19
Q

Positioning: how to gather needed info?

2 methods

comparison w pros & cons

A
  • directly asking consumers in surveys
    + straightforward
  • limited to what you ask
  • running perception data through statistical methods Correspondence analysis or Multidimensional Scaling (MDS) to build perceptual maps automatically showing similarities & differences
    Procedure: first ask consumers to assess level of similarity bw brands, then name axes!
    + resembles real-world unconscious comparison among multiple options; may yield surprises
  • complex
20
Q

STP process

in 6=2+2+2 steps

A
  • Segmentation
    • choice of segmentation basis
    • development of profiles for each segment
  • Targeting
    • assessment of each segment’s attractiveness
    • selection of target segments
  • Positioning
    • choose positioning strategy for target segments
    • define marketing mix guidelines for target segments
21
Q

Market segmentation def=

A

Market Segmentation divides a market into different groups of buyers with different needs, characteristics, or behavior.

22
Q

5 possible segmentation variables:

A
  • Geographic
  • socio-demographic
  • psychographic
  • benefit sought
  • behaviour
23
Q

5 desirable characteristics of a market segment

A
  • measurability
  • accessibility
  • substantiality
  • differentiability
  • actionability
24
Q

segmentation in 3 usual steps

A
  1. desk research
  2. then qualitative
  3. then quantitative (e.g. Cluster analysis) market research
25
Q

Targeting: 3+1 approaches

A
  • undifferentiated (common need of entire market)
  • differentiated (differential need of entire market)
  • concentrated (common need of one segment)
  • (online)
26
Q

Positioning:

2 methods to map competitors’ positioning

w pros & cons

A

Methods:

  • Asking customers directly with semantic diff. scales
  • *Pros:**
    • Straightforward approach, all domains of interest can be asked and compared
  • *Cons:**
    • You get what you ask for – you might forget important attributes
    • Included attributes might not be important from the respondents’ point of view
  • perceptual maps (=multidimensional space of the perceived similarities and differences among objects) via MDS = multidimensional scaling, aka correspondence analysis
    Pros:
    • Resembles a consumer’s choice in the real world (i.e. choosing between different brands without consciously thinking about different attributes)
    • Might lead to surprising new findings (maybe consumers base their selection of brands on dimensions that have not been considered so far)
  • *Cons:**
    • Complex technique, not always easy to interpret
27
Q

Value Proposition def=

A

Value Proposition is the full positioning of a brand, i.e. the sum of benefits promised to each target customer segment

28
Q

Value proposition:

the 5 winning benefit / price combinations

A

benefits: price:

more same less

more 4 4 4

same 4

less less 4 much less