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CHAPTER 7 Target Marketing Strategies
Real People, Real Choices CHAPTER 7 Target Marketing Strategies
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Chapter Objectives Understand the need for market segmentation Know the different dimensions marketers use to segment consumer & industrial markets Explain how marketers evaluate & select potential market segments
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Chapter Objectives Explain how marketers develop a targeting strategy Understand how a firm develops & implements a positioning strategy Know how marketers practice customer relationship management to increase long-term success and profits
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Step 1: Segmentation Segmentation is the process of dividing a larger market into smaller pieces based on one or more meaningful, shared characteristics Segmentation variables are used to divide the market into smaller slices Can segment a variety of ways
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Segmenting Consumer Markets
Demographics Psychographics Geographics Behaviors
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Demographic Dimensions
Age Gender Family structure Income & social class Race & ethnicity
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Age Children Teens Generation Y Who is Gen Y? Baby Boomers Elderly
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The Hispanic Market Segment
Brand loyalty Highly concentrated by national origin Youthful (median age is 23.6) 3.5 people in average household Receptive to relationship building
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Psychographics Segments markets in terms of shared attitudes, interests, & opinions Segments include demographic as well as includes richer descriptions VALS example Achievers
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Geographics Regional distinctions Heart disease density Local distinctions Zip code analysis
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Segmenting by Behavior
Behavioral segmentation slices consumers on the basis of how they act toward, feel about, or use a product Users versus nonusers Heavy, moderate, light users Usage occasions I’ve got Lance in my Pants!!!
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Segmenting Industrial Markets
Organizational demographics firm size number of facilities domestic or multinational type of business production technology utilized
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Step 2: Targeting Evaluating Market Segments Developing Segment Profiles Lance’s “Bubba” Choosing a Targeting Strategy
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Evaluating Market Segments
A viable target segment should satisfy these requirements: Large enough? Identifiable? Measurable? Reachable with marketing communications? Practical: Can the marketer serve their needs?
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Choosing a Targeting Strategy
Undifferentiated Marketing Differentiated Marketing Concentrated Marketing
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Undifferentiated Marketing
Appeals to a broad spectrum of people Efficient due to economies of scale Effective when most consumers have similar needs Example: Wal-Mart
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Differentiated Marketing
Develops one or more products for each of several customer groups with different product needs Appropriate when consumers are choosing among well-known brands with distinctive images & possible to identify one+ segments with distinct needs for different types of products Lexus versus Toyota
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Concentrated Marketing
Entails focusing efforts on offering one or more products to a single segment Useful for smaller firms that do not have the resources to serve all markets Specialized niche Lamborghini
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Step 3: Positioning Strategy
Analyze the competitors’ positions in the marketplace Offer a product with a distinct advantage Finalize the marketing mix Evaluate the target market’s response to positioning so modifications can be made Repositioning
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The Brand Personality A positioning strategy attempts to create a brand personality for a product A distinctive image that captures its character & benefits How do marketers determine where their products actually stand in the minds of consumers Perceptual mapping
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Question Some firms are criticized for targeting consumers. Is targeting ethical? What about in the case of unwholesome products to vulnerable segments like the elderly or children? Should the government regulate such marketing activities?
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