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Test 3 Study Guide

by: Callisa Ruschmeyer

Test 3 Study Guide MKTG 3310-001

Callisa Ruschmeyer
GPA 4.0

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About this Document

Chapter 4- Segmentation Included is a list of topics from the 3 previous chapters that we are expected to know
Study Guide
kincaid, principles of marketing, Market Segmentation, chapter4
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This 5 page Study Guide was uploaded by Callisa Ruschmeyer on Tuesday October 4, 2016. The Study Guide belongs to MKTG 3310-001 at Auburn University taught by MICHAEL KINCAID in Fall 2016. Since its upload, it has received 6 views. For similar materials see PRINCIPLES OF MARKETING in Marketing at Auburn University.


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Date Created: 10/04/16
Test 3 Study Guide Designing a Customer-Driven Marketing Strategy  Select customers to serve o Segmentation- divide the total market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes o Targeting- select the segment or segments to enter by evaluating each market segment's attractiveness and selecting one or more segments to enter  Decide on a Value Proposition o Differentiation- differentiate the market offering to create superior customer value o Positioning- position the market offering in the minds of target customers; arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers Segmenting Consumer Markets 1. Geographic segmentation o Dividing a market into different geographical units, such as nations, states, regions, counties, or cities o Companies are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual regions 2. Demographic segmentation o Dividing a market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation  Age and life-style- dividing a market into different age and life-cycle groups  Marketers must guard against using stereotypes  Gender- dividing a market into different segments based on gender  Income- dividing a market into different income segments  Some marketers target high-income segments  Retailers who target low-and middle-income groups are thriving 3. Psychographic segmentation o Dividing a market into different segments based on social class, lifestyle or personality characteristics o The products people buy reflect their lifestyles 4. Behavioral segmentation (BUM) o Using the Buyer Experience Cycle and Utility Levers to segment o Dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product  Occasions- dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item  Benefits sought- dividing the market according to the different benefits that consumers seek from the product  User status- segments include nonusers, ex-users, potential users, first-time users, and regular users  Usage rate- markets can also be segmented into light, medium, and heavy product users Test 3 Study Guide  Loyalty status- buyers can be divided into groups according to their degree of loyalty Segmenting Business Markets  Consumer and business markets use many of the same variables for segmentation  Business marketers can also use: o Operating characteristics o Purchasing approaches o Situational factors o Personal characteristics Segmenting International Markets  Geographic location  Economic factors o Income levels or level of economic development  Political and legal factors o Type of government, receptivity to foreign firms, monetary regulations, and bureaucracy  Cultural factors o Languages, religions, values, customs Intermarket Segmentation  Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries Requirements for Effective Segmentation  Measurable- sixe, purchasing power, profiles of segments can be measured  Accessible- segments can be effectively reached and served  Substantial- segments are large or profitable enough to serve  Differentiable- segments must respond differently to different marketing mix elements and programs  Actionable- effective programs can be designed to attract and serve the segments Market Targeting  In evaluating different market segments, a firm must look at o Segment size and growth o Segment structural attractiveness o Company objectives and resources  A target market is a set of buyers sharing common needs or characteristics that the company decides to serve Target Market Strategies  Undifferentiated (mass) marketing --> o Broadest o A firm decides to ignore market segment differences and go after the whole market with one offer Test 3 Study Guide o Focuses on what is common in the needs of consumers o Designs a product that will appeal to the largest number of buyers  Differentiated (segmented) marketing --> o A firm decides to target several market segments and designs separate offers for each  Concentrated (niche) marketing --> o A firm goes after a large share of one or a few segments or niches o Can fine-tune its products, prices, and programs to the needs of carefully defined segments  Micromarketing (local or individual marketing) o Narrowest o Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments  Local marketing- tailoring brands and promotions to the needs and wants of local customer segments- cities, neighborhoods, and even specific stores  Individual marketing- tailoring products and marketing programs to the needs and preferences of individual customers Choosing a Targeting Strategy  Factors to consider: o Company resources o Market variability o Product's life-cycle stage o Market variability o Competitors' marketing strategies Socially Responsible Target Marketing  Marketing generates concern when targeting: o Vulnerable, minority, or disadvantaged populations o Children and teens  Controversy arises when an attempt is made to profit at the expense of these segments o Example: critics worry that marketers directly or indirectly target young girls with provocative products, promoting a premature focus on sex and appearance Differentiation and Positioning  The company must decide on a value proposition: o How it will create differentiated value for targeted segments o What positions it wants to occupy in those segments?  Product position- the way a product is defined by consumers on important attributes Choosing a Differentiation and Positioning Strategy 1. Identifying a set of differentiating competitive advantages on which to build a position o Product o Services o Channels o People o Image Test 3 Study Guide 2. Choosing the right competitive advantages o Competitive advantage- an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices o Choose whether to promote a single benefit or multiple benefits  Important, distinctive, superior, communicable, pre-emptive, affordable, profitable 3. Selecting an overall positioning strategy o Value proposition- the full positioning of a brand- the full mix of benefits on which it is positioned  More for more- provide the most upscale product and charge a higher price to cover the higher costs  More for the same- attack a competitor's positioning by introducing a brand offering comparable quality at a lower price  The same for less- offer similar products at much reduced prices  Less for much less- meet consumer's lower performance or quality requirements at a much lower price  More for less- offer the best products at the lowest prices o Developing a positioning statement  A statement that summarizes company or brand positioning using this form:  To (target segment and need) our (brand) is (concept) that (point of difference)  All the company's marketing mix efforts must support the chosen positioning strategy What to know from other chapters… Chapter 1  Needs, wants, and demands  What are marketing offerings?  Marketing myopia  Customer value and satisfaction o Where does satisfaction come from- the expectancy theory  Definition of markets  Value positioning statement  Marketing management  Segmentation and target marketing  Value proposition  Differentiation  Customer lifetime value and the share of the customer  Customer relationship groups Test 3 Study Guide Chapter 2  SWOT analysis  Business portfolio  Portfolio analysis  BCG Growth-Share Matrix o Know how to define each cell and the purpose of it  Product/Market Expansion Grid o Define each cell and the purpose of it o Used to identify opportunities for growth  Marketing strategy  Market segmentation, targeting, positioning, differentiation  Four P's Chapter 3  Blue vs. Red oceans  Strategic sequence  Buyer utility map- what is it used for  Four action framework- what is this used to create o A strategy canvas  Price corridor of the mass o Three types of competition  Buyer's experience cycle  Utility levers  Competitors reactions to changes in price  Michael Porter's four basic strategies  Competitive Positions


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