Test 3 Study Guide
Test 3 Study Guide MKTG 3310-001
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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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