Textbook Notes (369,067)
Canada (162,366)
Management (865)
MGT252H5 (9)
Chapter 8

MGT252 - Chapter 8 Notes.doc

7 Pages
210 Views

Department
Management
Course Code
MGT252H5
Professor
Matthew Osborne

This preview shows pages 1 and half of page 2. Sign up to view the full 7 pages of the document.
Description
Chapter 8 • 8.1 • Target marketing • Identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. • Creating value for targeted customers 1. Market segmentation Dividing a market into smaller groups with distinct needs, characteristics or • behaviors that might require separate marketing strategies or mixes 2. Market targeting • The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter 3. Differentiation • Actually differentiating the market offering to create superior customer value 4. Positioning • Arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. • 8.2 • Geographic segmentation • Dividing a market into diff. geographical units such as nations, regions, provinces, countries, cities or neighborhoods. • Localizing products, advertising, promotion and sales efforts to fit the needs of ind. regions, cities and neighborhoods. • Demographic segmentation • Dividing the market into groups such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality. • Most popular segmenting method • Easiest to measure, but very simplistic • Identifying the target segment involves developing a detailed profile of its members - across many diff. demographic characteristics DemographicSegmentation Age and life-cycle stage • Dividing a market into diff. age and life-cycle groups • Be careful to guard against stereotypes • Age is often a poor indicator of a person’s lifecycle, health, work, family status, needs and buying power. • Employ positive images and appeals Gender • Dividing a market into diff. groups based on gender DemographicSegmentation Income • Dividing a market into diff. income groups • Some companies target affluent consumers with luxury goods and convenient services. • Others target low / middle-income groups. • Psychographic segmentation • Dividing a market into diff. groups based on social class, lifestyle or personality characteristics. Behavioral segmentation • • Dividing a market into groups based on consumer knowledge, attitudes, uses or responses to a product BehavioralSegmentation Occasions Dividing the market into groups according to occasions when buyers get the idea to buy, actually • make their purchase or use the purchased item • Help firms increase product usage; increase demand for nonholiday occasions • E.g. Coca-Cola’s “Good Morning” campaign, Christmas, Valentine’s Day Benefits sought • Dividing the market into groups according to the diff. benefits that consumers seek from the product User status • Segmented into nonusers, ex-users, potential users, first-time users and regular users of a product. • Marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users. • Potential users can be changed to heavy users Usage rate • Segmented into light, medium and heavy product users • Heavy users are small in % of the market, but high % of total consumption Loyalty status • Consumers can be loyal to brands, stores and companies • Can be divided into groups according to their degree of loyalty • Completely loyal: 1 brand --> pinpoint target market & develop marketing appeals • Somewhat loyal: 2-3 brands --> detect which brands are most competitive with its own • No loyalty: want something diff. every time or buy whatever’s on sale. --> marketing weaknesses Using multiple segmentation bases • To identify smaller, better-defined target groups. Segmenting business markets • Business marketers use many of the same variables to segment their markets Also use some additional variables • • customer operating characteristics • purchasing approaches • situational factors • personal characteristics Companies set up separate systems for dealing with larger or multiple-location • customers. • Within a given target industry and customer size, the company can segment by purchase approaches and criteria. Buying behavior and benefits provide the best basis for segmenting business markets. • Segmenting international markets • Can be segmented by geographic, economic, political and cultural factors. Intermarket / cross-market segmentation • • Forming segments of consumers who have similar needs and buying behavior even though they are located in diff. countries. Requirements for effective segmentation 1. Measurable • The size, purchasing power and profiles of the segments can be measured. 2. Accessible Market segments can be effectively reached and served (distribution, adverts) • 3. Substantial • Market segments are large or profitable enough to serve • Profitability sustainable over time A segment should be the largest possible homogenous group worth pursuing with • a tailored marketing program. 4. Differentiable • Segments respond differently to diff. marketing mix elements and programs. 5. Actionable • Effective programs can be developed (marketing mix). • 8.3 Evaluating market segments • 1. Segment size and growth 2. Segment structural attractiveness 3. Company objectives and resources Target market • • A set of buyers sharing common needs or characteristics that the company decides to serve. 1. Undifferentiated / mass marketing Ignore market segment diff. and go after the whole market with one offer. • • Uncommon today • Focus on what is common in the needs of consumers rather than on what is different. • Designs a product and a marketing program that will appeal to the largest no. of buyers. Trouble competing with more-focused firms that do a better job of satisfying • the needs of specific segments and niches. 2. Differentiated / segmented marketing • A firm decides to target several market segments and designs separate offers for each. • For higher sales and stronger position within each market segment Creates more total sales than mass marketing across all segments • • Increases the costs of doing business • Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion planning and channel management. • Increases promotion costs • E.g. Gap (Banana Rep., Gap, Old Navy) 3. Concentrated / niche marketing A firm goes after a large share of one or a few submarkets • • Strong market position due to its greater knowledge of customer needs in the niches it serves and the special reputation it acquires. • Effective by improving its products, prices and programs Efficient by targeting its g+s, channels and communication programs toward • consumers that it can serve best and most profitably. • Attract few competitors, as it’s unimportant / overlooked by larger competitors Start as nichers --> broader competitors
More Less
Unlock Document

Only pages 1 and half of page 2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit