MKTG CHAP 6-10 PDF - Marketing Chapters

CHAP 6 Identifying Market Segments and Target 2. Tactical Targeting: This is about creating Customers customer profiles using demographic, geographic, behavioral, and psychographic This chapter delves into...

CHAP 6 Identifying Market Segments and Target 2. Tactical Targeting: This is about creating Customers customer profiles using demographic, geographic, behavioral, and psychographic This chapter delves into the critical process data. Understanding these profiles helps of market segmentation and targeted businesses align customer needs with value marketing. Companies can optimize their propositions, ensuring more efficient and offerings by carefully choosing specific impactful marketing. customer segments and tailoring strategies to meet these segments’ unique needs. The Logic of Targeting Customer Profiling Mass marketing is a broad approach Profiling helps identify key customer where companies offer a single product to attributes: all customers, often sacrificing personalization. This is in contrast to Demographic: Age, income, and life stage. targeted marketing, where companies focus on specific segments, providing Geographic: Location-based preferences. customized offerings to meet diverse consumer needs. Mass customization Behavioral: Purchasing habits and loyalty. further bridges the gap between efficiency and personalization by allowing Psychographic: Values, attitudes, and mass-produced items to be customized, lifestyle. achieving scale while addressing individual preferences. Developing personas—fictional Strategic versus Tactical Targeting representations of ideal customers—allows businesses to anticipate customer needs 1. Strategic Targeting: This method and preferences, further refining targeting focuses on selecting customers whose strategies. needs align with the company’s unique capabilities. It involves two key factors: Market Segmentation Strategies Target compatibility: Measures the 1. Single-Segment Targeting (Niche company’s ability to meet target customer Marketing): Focuses on one specific needs better than competitors, relying on segment, maximizing relevance and impact. resources, brand strength, and network. Target attractiveness: Evaluates the value 2. Targeting Multiple Segments: gained from serving a segment, considering Companies may use product both monetary and strategic benefits like specialization (custom products for each customer loyalty and brand visibility. segment) or market specialization (focusing on one market but addressing multiple needs within it). Segmenting Consumer Markets Demographic Segmentation: Age, gender, income, and cultural background influence purchasing behavior. Geographic Segmentation: Targets based on location, using tools like PRIZM for detailed geographic and demographic insights. Behavioral Segmentation: Considers factors like user status, loyalty, and spending habits. Segmenting Business Markets In business-to-business (B2B) contexts, segments are defined by demographic factors, operating variables, purchasing approaches, and more. Understanding these nuances helps businesses create value propositions that resonate with specific business needs. By segmenting markets effectively, companies can craft tailored marketing strategies that improve customer engagement and build lasting relationships with distinct customer segments.  Customer Value Analysis Steps: CHAP 7 1. Identify valuable attributes and benefits. Crafting a Customer Value Proposition and Positioning 2. Assess importance of these attributes. This chapter explains the essentials of 3. Compare company and competitor creating a customer value proposition performance. and a positioning strategy. The goal is to deliver value across functional, 4. Track changes to improve offerings. psychological, and monetary dimensions for an enhanced customer experience. Key Concepts Positioning Strategy Development 1. Value Proposition: The promise of Positioning aims to create a unique image in benefits that attract and retain customers, customers' minds. which includes: Frame of Reference: Sets a comparison ★ Functional Value: Practical benefits baseline against competitors. (e.g., energy savings). ★ Psychological Value: Emotional Points of Difference (PODs) and Points benefits (e.g., brand status). of Parity (POPs) ★ Monetary Value: Financial savings PODs: Unique, superior brand attributes. over time. Must be desirable, deliverable, and 2. Total Customer Benefit: The anticipated differentiating. value from all functional, psychological, and monetary aspects combined. POPs: Shared attributes essential for acceptance. 3. Total Customer Cost: All perceived costs, including money, time, and effort. Visual Tools Perceptual maps illustrate consumer views Customer Value Proposition of various brands, helping align positioning. This is the net difference between benefits received and costs incurred, driving customer purchase decisions. Creating a Sustainable Advantage Core Strategies: 1. Differentiate on existing attributes. 2. Introduce valuable new attributes. 3. Build a strong, resonant brand. Communicating Positioning A positioning statement clearly articulates unique benefits, category, POPs, and PODs. Storytelling in Positioning Effective brand storytelling includes: Setting (context), Cast (characters), Narrative Arc (story flow), and Language (tone and wording). CHAP 8 3. Product Portfolio Design A balanced product portfolio is essential for meeting diverse consumer needs. Key Key Takeaways dimensions include: 1. Product Differentiation ★ Width, Length, Depth, and Product differentiation is central to creating Consistency - Defining the structure a unique selling proposition (USP). and coherence of product offerings. Important aspects include: ★ Strategic Benefits - Helps in ★ Core Functionality - Defines the decision-making, segmenting primary purpose of the product. markets, and analyzing competitors. ★ Features - Unique attributes that add appeal. 4. Product Line Analysis Companies analyze product lines using ★ Quality Metrics - Performance, maps that help: conformance, durability, and reliability. ★ Identify Competitors and Market Segments - Pinpointing competition ★ Form and Style - Physical and and market gaps. aesthetic customization that caters to user preferences. ★ Line Stretching, Filling, Modernization, Featuring, and 2. Product Design Pruning - Techniques to expand, Product design significantly impacts how update, or streamline offerings. consumers perceive a product, contributing to brand meaning and emotional appeal. Noteworthy points include: 5. Managing Packaging Packaging goes beyond aesthetics; it plays ★ Emotional Impact - Effective design an integral role in brand identification and can elicit strong consumer logistics. Key functions include: responses. ★ Brand Identification and ★ Transformational Potential - Great Information Conveyance - Clear design has the power to revitalize a branding and persuasive brand. information. ★ Manufacturing Influence - Design ★ Logistics and Color Impact - affects manufacturing processes and Facilitates transport and influences distribution efficiency. consumer perception. 6. Labeling, Warranties, and Guarantees Labels provide essential information about the product, aiding in identification, grading, and promotion. Additionally: ★ Warranties and Guarantees - These build consumer trust and can enhance brand loyalty by offering assurances on product reliability. Important Highlights ★ Differentiation focuses on the unique value of each product. ★ Design ties deeply into brand perception and consumer satisfaction. ★ Portfolio and Line Management ensures a comprehensive market presence. ★ Packaging and Labeling are key for both logistics and brand visibility. ★ Warranties enhance consumer trust, reinforcing brand reliability.  help make services feel more CHAP 9 tangible. Designing and Managing Services ★ Inseparability: Services are produced and consumed simultaneously, necessitating direct The Service Aspect of an Offering interaction between provider and customer. Services are categorized based on their relationship with tangible goods: ★ Variability: Service quality may vary due to differences in providers, ★ Pure Tangible Good: Products with timing, and customer interactions, no service component. complicating standardization efforts. ★ Tangible Good with ★ Perishability: Services cannot be Accompanying Services: Goods stored for future use, requiring enhanced by additional services to strategies to balance supply and improve customer experience. demand effectively. ★ Hybrid: A balanced combination of goods and services. Perishability Management ★ Major Service with Minor To address perishability, companies can Goods/Services: Primarily a apply various strategies: service, supplemented by minor goods. ★ Demand-Side Tactics: Use differential pricing, encourage ★ Pure Service: Fully intangible off-peak usage, offer complementary offerings with no tangible goods services, and use reservation involved. systems. ★ Supply-Side Tactics: Utilize Key Characteristics of Services part-time staff during peak times, streamline service routines, Four fundamental characteristics distinguish encourage customer participation, services from tangible goods: share resources, and plan for growth. ★ Intangibility: Services are not perceptible through the senses, making evaluation prior to New Realities in Services consumption difficult. Strategies like enhancing the service environment Several factors are transforming the service and effective communication can landscape:  ★ Technology Advancements: ★ Customer-Centricity: Approaching Technology improves service services from the customer’s efficiency and enables new modes viewpoint. of delivery. ★ High Service Quality: Setting high ★ Customer Empowerment: standards and continuously seeking Customers increasingly demand customer feedback. personalization and share experiences online, influencing ★ Focus on High-Value Customers: brand perception. Providing tailored services for loyal, high-value customers. ★ Customer Coproduction: Customer involvement in service ★ Efficient Complaint Management: processes can boost or hinder Offering prompt responses and service quality, making it vital to resolution through dedicated design processes that define customer support. customer roles effectively. Differentiating Services Achieving Excellence in Service Delivery Service differentiation can enhance Excellence in services relies on three types customer experience through factors such of marketing: as ease of ordering, delivery speed, installation, customer training, maintenance ★ External Marketing: Encompasses services, and simplified return processes. service preparation, pricing, distribution, and promotion. Innovation in Services ★ Internal Marketing: Involves Innovation drives service evolution, as seen training and motivating employees to with developments like online travel provide top-quality service. booking, retail health clinics, and private aviation. ★ Interactive Marketing: Focuses on interactions between employees and Managing Service Quality customers, which significantly impact satisfaction. Ensuring high-quality service involves setting realistic customer expectations and adopting self-service technologies that Best Practices of Top Service streamline service interactions. Companies Leading service companies exemplify: Self-Service Management The rise of self-service technologies has shifted service models towards automation, reducing direct human contact while enhancing convenience and efficiency. Managing Product-Service Bundles To stay competitive, companies must skillfully manage product-service bundles, focusing on differentiators like ordering processes, delivery channels, and post-purchase support such as installation and maintenance.  4. Brand Power: Reflects the added value CHAP 10 a brand brings, enhancing customer perception and product appeal. Branding Fundamentals in Marketing Management 5. Brand Design and Elements: Memorable, relevant branding (e.g., logos Branding is central to effective marketing, and slogans) fosters recognition and allowing companies to build strong identities emotional resonance. that distinguish their products from competitors and connect deeply with consumers. Defined by the American 6. Portfolio Strategies: Approaches such Marketing Association, a brand is any as house-of-brands, branded-house, and name, term, symbol, or design that identifies cobranding manage multiple brands within a a company’s offerings, guiding consumer portfolio, catering to diverse markets. choices and fostering loyalty. Core Concepts 7. Crisis Management: In times of difficulty, brands must focus on empathy, strategic 1. Branding Definition: Branding creates a planning, and innovation to preserve unique identity, allowing firms to stand out customer trust. and build consumer trust. 8. Luxury Branding: Quality, uniqueness, 2. Benefits for Consumers and Firms: and exclusivity define luxury brands, which must carefully manage their market ★ For consumers: Brands reduce positioning to maintain allure. decision-making risk, set clear expectations, and add personal meaning. Key Takeaways ★ For firms: Brands aid in organizing The Role of Branding: Branding is more product lines, maintaining loyalty, than identity; it creates emotional bonds that and creating a lasting competitive can drive long-term loyalty. advantage. Assessing Brand Equity: Understanding 3. Brand Equity: The financial worth brand equity helps firms leverage their value derived from a brand's reputation, assessed and make informed decisions. through methods like market and financial valuation. Managing Brand Portfolios: A well-structured portfolio allows brands to maximize reach and minimize overlap. Adapting Through Repositioning: Brands must evolve with the market, balancing innovation with consistency to avoid dilution. Handling Brand Crises: Effective crisis management focuses on empathy, transparency, and strategic recovery. FAQs 1. What defines a brand? ★ A brand is a name, symbol, or design that differentiates products or services and builds consumer trust. 2. How does branding benefit consumers? ★ Brands reduce decision risk, simplify choices, and add meaning to products, shaping consumer experiences. 3. What strategies are used in brand management? ★ Brand management strategies include house-of-brands, branded-house, and sub-brand approaches for market alignment. 4. What’s essential in brand crisis management? ★ Key elements include empathy, maintaining value, and strategic action to protect brand integrity during crises.