Chapter 7
Age and life-cycle segmentation- Dividing the market into different age and life-cycle groups
Example – For kids, Oscar Mayer offers lunchables, for older generations, it ,markets Deli Creations.
Behavioral segmentation- Dividing the market into different segments based on consumer knowledge,
attitudes, uses. Or responses to a product
Example- The best starting point for building other market segments.
Benefit Segmentation- Dividing the market into segments according to the different benefits that
consumers seek for the product
Example- Champion Athletic- “Fit and Polish” consumers seek a balance between function and stylethey exercise for results but want to look good doing it.
Competitive Advantage – An advantage over competitors gained by offering greater consumer value,
either through lower prices or by providing more benefits that justify higher prices
Example- When Staples research revealed that it should differentiate itself on the basis of “easier
shopping experience” the office supply retailer held back its “staples: that was easy” marketing
campaign for more than a year.
Concentrated(Niche) Marketing-A market-coverage strategy in which a firm goes after a large share of
one or a few segments or niches.
Example- Enterprise-Rent-A-Car began by building a network of neighborhood offices that served the
niche market of city dwellers who don’t have a car, rather than competing with Hertz and Avis in airport
locations, but is now one of the largest car rental companies.
Demographic Segmentation- Dividing the market into segments based on variables such as age,
gender, family size, household income, occupation, education, or cultural group, and generation .
Differentiated( segmented) Market – A market covered strategy in with a firm decides to target several
market segments and designs separate offers for each.
Example- Toyota produces many cars from Yaris to Lexus, each targeting different group of car buyers- a
different market segment.
Differentiation- Actually differentiating the market offering to create superior customer value
Gender Segmentation- Dividing a market into different segments based on gender.
Example- P & G was among the first with Secret antiperspirant, a brand specially formulated for
woman’s chemistry, packaged and advertised to reinforce female image.
Geographic Segmentation – Dividing a market into different geographic units, such as global regions,
countries, regions within a country, provinces, cities, or even neighborhoods.
Household Income Segmentation- Dividing the market into different income segments
Individual Marketing (mass customization)- Tailoring products and marketing programs to the needs
and preferences of individual customers.
Intermarket Segmentation - Forming segments of consumers who have similar needs and buying
behavior even though they are located in different countries.
Example- Lexus targets the worlds well-to-do- the global elite segment, regardless of their country
Local Marketing- A small group of people who live in the same city, or neighborhood, who shop at the
same store.
Micromarketing- The practice of tailoring products and marketing programs to the needs and wants of
specific individuals and local customer segments- includes local marketing and individual marketing .
Occasion Segmentation- Dividing the market into segments according to occasions when buyers get the
idea to buy, actually make their purchase, or use the purchased item.
Positioning- Arranging for a market offering to occupy a clear, distinctive. And desirable place relative
to competing products in the minds of target consumers
Positioning Statement -A statement that summarizes company or brand positioning- it takes this form”
To(target segment and need) our (brand) is (concept) that (point of difference)
Product Position- The way the product is defined by consumers on important attributes- the place the
product occupies in consumers’ minds relative to competing products
Example- Blackberry is positioned as a personal productivity aid, while IPhone is positioned as a high
tech with high style.
Psychographic segmentation- Dividing the market into different segments based on social class,
lifestyle, or personal characteristics
Segmentation- Dividing a market into distinct groups with distinct needs, characteristics, or behaviors
that might require separate marketing strategies or mixes.
Target Market- A set of buyers sharing common needs or characteristics that the company decides to
serve.
Targeting- The process of evaluating each market segments attractiveness and selecting one or more
segments to enter
Undifferentiated (mass) Marketing- A market coverage strategy in which a firm decides to ignore
market segment differences and go after the whole market with one offer.
Value Proposition – The full positioning of a brand-the full mix of benefits upon which it is positioned
Example- Why should I buy your brand ?
Chapter 8
Product- Anything that can be offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or need
Service- An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not
result in the ownership of anything.
Customer Product- A product bought by final consumers for personal consumption
Convenience Product - A consumer product that customers usually buy frequently, immediately, and
within a minimum of comparison and buying effort
Shopping Product – A consumer product that the customer, in the process of selection and purchase,
usually compares on such bases a suitability, quality, price, and style.
Specialty Product-A consumer product with unique characteristics or brand identification for which a
significant group of buyers is willing to make a special purchase effort .
Unsought Product – A consumer product that the consumer either does not know about or knows
about but does not normally think of buying.
Industrial product- A product bought by individuals and organizations for further processing or for use
in conducting a business