MKTG 396 Midterm Notes Lesson 6.docx - Lesson 6 Competitive Advantage and Customer-Driven Marketing Strategy CHPT 8 Customer-Driven Marketing Strategy

MKTG 396 Midterm Notes Lesson 6.docx - Lesson 6 Competitive...

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Lesson 6: Competitive Advantage and Customer-Driven Marketing Strategy CHPT 8 – Customer-Driven Marketing Strategy: Creating Value for Target Customers CHPT 18 – Creating Competitive Advantage 1. define market segmentation , market targeting , and market positioning , and describe how they are related. (textbook, pp. 244–245) Target marketing – identifying market segments, selecting on or more of them, and developing products and marketing programs tailored to each. Market segmentation involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviours that may require separate marketing strategies or mixes. Market targeting (or targeting) consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter. Differentiation involves actually differentiating the firm’s market offering to create superior customer value. Positioning consists of arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of target markets. 2. list the major segmentation variables for both consumer and business markets. (textbook, pp. 245–255) Segmenting Consumer Markets Geographic segmentation – calls for dividing the market into different geographical units, such as nations, regions, provinces, counties, cities, or even neighborhoods. Demographic segmentation – divides the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants and usage rates often vary closely with demographic variables. Age and life-cycle segmentation – offering different products or using different marketing approaches for different age and life-cycle groups. Research suggests that Canadian women move through five distinct life-cycle stages: Emerging consumers, New Earners, Mom, The Established, and Silver Spenders. Age is often a poor predictor of a person’s life cycle, health, work or family status, needs and buying power.
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Gender segmentation – has long been used in clothing, cosmetics, toiletries and magazines Income segmentation – affluent consumers versus low-income consumers; different products are marketed to a segment based on income (sometimes). Psychographic segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics. i.e.) high-energy couples or mature couples Behavioral segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product. Occasion segmentation can help firms build product usage; buyers can be grouped according to occasions when they get the idea to buy, actually make their purchase, or use the purchased item.
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