Marketing Week 4 Summary & Study Notes

📘 Market and Market Segmentation

Market: People or organizations with needs/wants, willingness to buy, and ability to buy. A market is the potential customer base for a product or service.

Market segmentation: The process of dividing a market into meaningful, relatively smaller and identifiable segments or groups so marketers can tailor marketing mixes for each group. A segment is a subgroup of customers who share common characteristics or needs.

🔍 Importance of Segmentation

Segmentation helps marketers identify groups of customers with similar needs, study them, and uncover information to design appropriate marketing mixes. It improves accuracy in defining marketing objectives and allocating resources, and aligns with the marketing concept of satisfying customer needs.

🧩 Forms of Market Segmentation (Mass → Individual)

Mass marketing: One marketing mix for an entire market; used for broadly needed products (e.g., utilities, basic produce).

Segment marketing: Different products/brands to meet needs of varied target markets.

Niche marketing: Focus on a narrow, profitable segment often overlooked by larger competitors — common for smaller or new firms.

Individualized (one-to-one) marketing: Customizing offers to individual customer needs; used in personalized services and retention programs.

🌍 Geographic Segmentation

Segments based on region of the world, region of the country, market size, market density, and climate. Useful when location-driven differences affect demand or product suitability.

👥 Demographic Segmentation

Segments by age, gender, income, ethnic background, family life cycle, and occupation. Demographics are often the first and easiest segmentation base because data is widely available.

⚧ Gender, Income, and Ethnic Subgroup Notes

Gender: Simple to use but boundaries are increasingly blurred; be cautious with stereotypes.

Income: Influences wants, preferences, and buying power.

Ethnic: Multicultural societies create sizable ethnic markets that may require unique approaches and messaging.

👔 Occupation and Family Life Cycle

Occupation affects purchases (e.g., work-specific clothing or tools). The family life cycle (age, marital status, children) influences needs and buying patterns over time.

🧠 Psychographic Segmentation

Segments by personality, motives, lifestyle, and geodemographic patterns. Useful for understanding underlying motivations and designing lifestyle-oriented offerings.

🎯 Benefit Segmentation

Segments according to the benefits consumers seek from a product or service. This is need-based segmentation and often combined with demographics to create detailed customer profiles (e.g., what benefit do you want from a mobile phone?).

📈 Usage-Rate Segmentation

Segments by the amount of product used: first-time users, light/irregular users, medium users, and heavy users. Allows targeting of retention, up-sell, or trial strategies.

🛠 Steps in Segmenting a Market

• Identify consumer/customer needs and common characteristics.
• Cluster common variables to create meaningful segments.
• Estimate the size and feasibility of each segment.
• Select the segment(s) to target.
• Act with marketing programs to reach the chosen segments.
• Monitor and evaluate program success against objectives.

✅ Criteria for Effective Segmentation

• Substantiality: Segment must be large enough and profitable.
• Identifiability: Segment must be measurable and data available.
• Accessibility: Must be able to reach the segment via marketing channels.
• Responsiveness: Segment must respond differently enough to justify separate treatment.

🧾 Target Market Profiles and Personas

Target market: A specific group of existing and potential consumers to which marketers direct their efforts. Developing accurate target market profiles and personas is crucial because they drive product, pricing, distribution, and communication decisions.

Brand persona: A fictional person representing a major user group; it captures representative characteristics and helps make marketing more concrete.

🔢 Four General Targeting Strategies

Undifferentiated: Mass-market approach with one marketing mix for everyone.

Concentrated: Target a single niche segment with a specialized offering.

Multisegment: Target two or more segments with distinct marketing mixes for each.

One-to-one: Customized offers and communication for individual customers to increase loyalty and retention.

Consider trade-offs: reach vs. cost, complexity vs. focus, potential ROI, and competitive intensity when choosing a strategy.

🚗 Examples and Activities

Example prompts: How does the automotive industry segment customers? Consider usage (commuters vs. weekend drivers), demographics (age, income), psychographics (status seekers, eco-conscious), and benefits (fuel efficiency, safety).

Class activity example: For a company like One Plant Cannabis, classify priority segments using the bases above, choose a targeting strategy (e.g., concentrated on medicinal users or multisegment for recreational and medicinal), and define target market(s).

📍 Positioning — Definition and Purpose

Position: The impression of the branded product you want to establish in consumers’ minds relative to their needs and the competition. Effective positioning requires assessing competitor positions, identifying key dimensions, and choosing where your marketing will have the greatest impact.

✨ Product Differentiation vs. Similarity

Product differentiation: Positioning based on what distinguishes the product from competitors (features, quality, service).

Positioning based on similarity: Position by claiming similarity to a known product or experience (e.g., artificial sweeteners that "taste like sugar"). This can leverage familiar reference points.

🗺 Perceptual Mapping

A tool for displaying, in two or more dimensions, the location of products or brands in customers’ minds. Useful to visualize gaps, overcrowded spaces, and repositioning opportunities.

🧭 Positioning Bases

Common bases to position a product:

• Attribute: Features or benefits of a product.
• Price and quality: High price as a symbol of quality.
• Use or application: Emphasize uses or occasions.
• Product user: Focus on a personality or user type.
• Product class: Associate with a particular category.
• Competitor: Position against a specific competitor.
• Emotion: How the product makes the customer feel.

🔁 Repositioning

Repositioning: Changing consumer perceptions of a brand relative to competitors. This can respond to market shifts, brand decline, or new opportunities.

📝 Developing a Positioning Statement

A clear positioning statement should include: target market and need, branded product name, category, and the brand’s unique attributes/benefits. Template: For (target market) who desire (need), (brand) is the (product category) that offers (key benefits).

Example: For premium outdoor consumers and urban explorers who desire uncompromising warmth, quality, and style in extreme conditions, Canada Goose is the luxury performance outerwear brand that offers industry-leading protection, artisanal craftsmanship, and enduring Canadian heritage.

🧑‍🎨 Brand Personas/Profiles

Brand personas are fictional representations of major user groups. They summarize demographics, psychographics, key needs, and purchase drivers to make targeting and messaging concrete and actionable.