Show MKT 340 PRIN OF MARKETING Iowa State University involves aggregating prospective buyers into groups that 1. have common needs and 2. will respond similarly to a marketing action the relatively homogeneous groups of prospective buyers that result from the market segmentation process a strategy where a firm uses different marketing mix activities, such a product features and advertising, to help consumers perceive the product as being different and better than competing products a frame work to relate the market segments of potential buyers to products offered or potential marketing by an organization 3 Specific Segmentation Strategies 1. One product and multiple market segments 2. Multiple products and multiple market segments 3. Segments of one, or mass customization
One Product and Multiple Market Segments -produces only a single product or service and attempts to sell it to two or more markets - avoids extra costs of developing and producing additional versions of the product ex. magazine and book covers Multiple Products and Multiple Market Segments - make multiple products even if it is more expensive to make - fits customer needs better, doesn't reduce quality or increase price ( ford cars, SUV, trucks) "segments of one" or mass customization tailoring goods or services to the tastes of individual customers on a high volume scale manufacturing a product only when there is an order from a customer the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently are the new products or new chain simply stealing customers and sales from the older, existing ones? criteria to use in forming the segments
1. Geographic 2. Demographic 3. Psychographic 4. Behavioral geographic segmentation variables Region City size Statistical area Media-television Density demographic segmentation variables
Gender Age Race/ethnicity Life stage Birth era Household size Marital status Income Education Occupation psychographic segmentation variables Personality Values Lifestyle Needs behavioral segmentation variables Retail store type Direct marketing Product features Usage rate User status Awareness/intentions based on where prospective customers live or work (region, city size) demographic segementation based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers psychographic segmentation based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers based on some observable actions or attitudes by prospective customers - such as where they buy, what benefits they seek, how frequently they buy, and why they buy 5 key steps in segmenting and targeting markets 1. Group potential buyers into segments 2. Group products sold into categories 3. Develop a market-product grid and estimate size of market 4. Select target markets 5. Take marketing actions to reach target markets 80% of a firm's sales are obtained from 20% of its customers criteria to use in selecting target segments 1. market size 2. expected growth 3. competitive position 4. cost of reaching the segment 5. compatibility with the organization's objectives and resources refers to the place a product occupies in consumer's minds on important attributes relative to competitive products changing the place a product occupies in a consumer's mind relative to competitive products involves competing directly with competitors on similar product attributes in the same target market differentiation positioning involves seeking a less-competitive, smaller market niche in which to locate a brand 4 steps to product positioning using perceptual maps 1. Identify the important attributes for a product in a brand class 2. Discover how target customers rate competing products or brands with respect to these attributes 3. Discover where the company's product or brand is on these attributes in the minds of potential customers 4. Reposition the company's product or brand in the mind of potential customers a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers What is it called when a company's new products take away the sales of current products?Product cannibalization – also known as corporate cannibalism or market cannibalization – happens when a company's new product displaces an existing one. In other words, it reduces purchases of an older product and eats away at your own sales.
What is cannibalism in business?What Is Corporate Cannibalism? Corporate cannibalism is when a product sees a decrease in sales volume or market share due to the release of some new product that has been introduced by the same company. The new product ends up “eating” demand for the current product, therefore reducing overall sales.
What is product cannibalization?In the retail environment, product cannibalization can be referred to as a loss of sales and revenue when a newly introduced product pulls demand away from existing products within the same portfolio.
What are the 4 types of market segmentation?Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types. Here are several more methods you may want to look into.
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When a businesss new product or new chain is stealing customers and sales from the older existing ones it is known as?
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