Chapter+4+and+5++Segmentation+and+Value+Proposition

Submitted by: Jason Smith, Demah Alyahya, Madeline Yoste, Adina Kaliyeva, Greg Potts
 * __Chapter 4 and 5: Segmentation and Value Proposition__**

· How do you define the market? What is the purpose of defining a market? · 5 Market Segment Traits: measurable, substantial, accessible, differential, actionable
 * Market is an aggregate of people who, as individuals or as organizations, have needs for products in a product class and have the ability, willingness, and authorities to purchase such products.
 * The purposes of defining a market are:
 * Better matching of customer needs
 * To enhance profit for business
 * To retain more customers
 * Easy to communicate with target market
 * Better opportunities for growth
 * To know the potential needs now and for future.
 * Measurable: Segments can be measured in terms of size and purchasing power
 * Substantial: Segments must be large or profitable enough to serve
 * Accessible: Segments must be able to be effectively reached and served
 * Differential: Segment responds differently to different marketing elements and actions
 * Actionable: Firm must be able to attract and retain the segment market

· What includes benefit profile? How do you deliver benefits?
 * Firms deliver benefits to the consumers through product attributes
 * Benefits are as defined by the consumer

· Two ways to differentiate yourself:

1. To take a benefit that is already important and offer more of it. 2. To make more salient another benefit that hasn’t been as important and make it more important

· Segmentation Strategies:

- Businesses need to evaluate which segments to target based on their size, resources available, and by 5 market segment traits

· Psychographic and behavioral segmentation:

o Benefits are most important o We can measure benefits based on the perception of the target market; o Measurable segments are combined based on benefits;

· Value Proposition:

Value proposition is a statement which shows what advantage does one product have in value or service to solve customer problems more than the other products in market. We need to create a different value proposition for every new benefit profile.

· Difference between capabilities and competitive advantage:

o Competitive advantage - delivering on the benefits better than the competition - Capabilities are the things that an organization does well.

· Segment Attractiveness: Which factor is most important in segment attractiveness? Why?
 * To me market growth is most important. I feel this way becasue you cant target a segment succesfully if it is not big enough to support your product. Also it is much easier to have proper segment penetration in a market that is large, verses a market that is small and undeveloped.

Discussion Ideas: 1. Is this a good market segment? Females who are value lower cost and higher quality cars
 * I dont think it is a good segment because cars are used by everyone, not just women. Segmenting a car that does not appeal to all markets is cutting yourself off from the largest car buying segment, men.
 * I also do not believe that this a good market segment, simply because the perception of quality is not ultimately controlled by the company targeting a specific market segment, it is created and controlled by the consumer. What may be considered "quality" for one person, may not be for another. Though a company can drive their image as they want to be perceived, ultimately the decision will be made by the consumer. To based your market segment on something you cannot control worries me.
 * (This is very similar to the above mentioned point). What is considered to be lower cost by one person could very be super-expensive for the other person. There is no way to define low cost that is general for the entire market segment. You have to look at statistics and identify the kind of cars in the market segment and analyze the average cost. After that, a good way to display the data is to organize them into lower, middle, and higher scale based upon standards described by the data itself.

2. Why do we want to define a market?
 * Because it helps the company plan its marketing mix to meet its market's need and preferences.
 * It also helps the company be more productive in its marketing efforts.
 * You want to define your market in order to figure out how and what you will use to reach your market.

3. What are factors defining segment attractiveness?
 * Market growth:
 * Market size: must be big enough to be worth targeting.
 * Growth rate: market with good long term growth is most attractive.
 * Market Potential
 * Competitive Intensity
 * Number of companies
 * Easy of entry
 * Substitutes
 * Market Access
 * Customer Familiarity
 * Channel Access
 * Company fit

4. Why might a certain segment be ignored?
 * Because these segments are not big enough to be targeted, if the company targets on these segments, it would be an insignificant effects on the company's sales and profits.
 * Market segments that have not yet been identified by a company/organization will be ignored as well. In this case it is not so much a //choice// not to serve them, but a //lack of knowledge// which prevents the company/organization from reaching a potential market.

5. Use this space to generate more segment strategy ideas: for example: multi-segment strategies, niche-market strategies…
 * Sub-segment strategy: the company targets two, or as many segments as they can by developing a marketing mix for each segment.
 * Small segment strategy: the company targets only one segment by using one marketing mix.
 * Mass market strategy: the company targets the whole market with one offer.
 * Large-segment strategy: the company targets on the biggest segment of the market with one offer.
 * Adjacent-segment strategy: the company targets on single segment but it has reached the point of full market penetration.
 * Multi-segment strategy: the company focuses on several market segments and develops different marketing strategies for each targeted segment.
 * Niche-market strategy: the company uses a highly refined marketing effort directed at a small group of overlooked customers.

Value proposition videos.