Textbook Notes (369,035)
Canada (162,359)
MGMA01H3 (184)

CH 8.docx

4 Pages
Unlock Document

Management (MGM)
Tarun Dewan

CH 8: Customer- Driven Marketing Strategy: Creating Value for Target Customers  Market Segmentation- Dividing a market into smaller groups with distinct needs, characteristics, or behaviours that might require separate marketing strategies or mixes  Marketing Targeting (targeting)- The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter  Differentiation- Actually 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.  Figure 8.1  Market Segmentation segmenting consumer markets, segmenting business markets, segmenting international markets, and requirements for effective segmentation  Segmenting Consumer Markets o Geographic Segmentation- dividing a market into different geographical units such as nations, regions, provinces, counties, cities, or neighbourhoods. o Demographic Segmentation- Dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.  Easier to measure than most other types of variables o Age and life-cycle Segmentation- Dividing a market into different age and life-cycle groups.  Poor indicator of a person’s life cycle, health, work or family status, needs and buying power o Gender Segmentation- Dividing a market into different groups based on gender. o Income Segmentation- Dividing a market into different income groups. o Psychographic Segmentation- Dividing a market into different groups based on social class, lifestyle, or personality characteristics. o Behavioural Segmentation- Dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product. o Occasion Segmentation- Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item. o Benefit Segmentation- Dividing the market into groups according to the different benefits that consumers seek from the products.  User Status: nonusers, ex-users, potential users, first-time users, and regular users  Usage Rate: light, medium, heavy product users.  Loyalty Status: segment a market based on consumer loyalty  By looking at customers who are shifting away from its brand, the company can learn about its marketing weakness.  Business marketers also use variables  customer operating characteristics, purchasing approaches, situational factors, and personal characteristics o World Market Segmentation: geographic segmentation, economic factors, cultural factors, political and legal factors o Intermarket Segmentation- Forming segments of consumers who have similar needs and buying behaviour even though they are located in different countries.  Requirements for Effective Segmentation: o Measurable: the size, purchasing power, and profiles o Accessible: the market segments can be effectively reached and served o Substantial: the market segments are large or profitable enough to serve. o Differentiable: the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs o Actionable: Effective programs can be designed for attracting and serving the segments.  Market Targeting o Evaluating Market Segments 3 factors:  Segment Size: right size and growth. Not all companies can handle rapid growth.  Segment Structural Attractiveness: that affect long-run segment  Less attractive already have strong, and aggressive competitors, substitute products, relative power of buyers, strong bargaining power relative to seller force price down, powerful suppliers who can control prices or reduce the quality or quantity  Company Objectives and Resources o Selecting Target Market Segments (Fig. 8.2)  Target Market- A set of buyers sharing common needs or characteristics that the company decides to serve.  Undifferentiated Marketing (mass marketing)- A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one another.  Cons: harder to compete with more focused firms  Differentiated Marketing (or segmented marketing)- A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.  Hopes for higher sales and stronger position within each market segments  Cons: Increase costs for differentiation  Concentrated Marketing (niche marketing)- A market coverage strategy in which a firm goes after a large share of one or a few segments or niches.  Instead of going for a small share of a large market, firm goes after a large share of one or a few smaller segments or niches.  Lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger competitors  Some mega marketers develop niche markets to create sales growths.  Cons: higher risk rely on one or a few segments  Micromarketing- The practice of tailoring products and marketing programs to the needs and
More Less

Related notes for MGMA01H3

Log In


Join OneClass

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

Sign up

Join to view


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.