Marketing 3010 Clemson Exam 2

What is market segmentation?

Division of a market into groups with common needs and similar responses.

What is the goal of brand loyalty?

A key advantage of effective segmentation; segmentation can improve relevance, focus, product development, and loyalty.

What is demographic segmentation?

Grouping consumers using easily measured, objective characteristics such as age, gender, income, education, and ethnicity.

What is geographic segmentation?

Grouping consumers based on location.

What is proximity marketing?

Geographic segmentation based on a consumer's current location.

What is geocoding?

Geographic segmentation based on a consumer's home/location.

What is behavioral segmentation?

Grouping consumers based on benefits sought and how products meet their needs and wants.

What is occasion segmentation?

Grouping consumers based on when a product is consumed, such as weddings, tailgates, or birthdays.

What is usage-based segmentation?

Grouping consumers based on how often a product is used: nonusers, moderate users, or heavy users.

What is geodemographic segmentation?

Grouping consumers based on geography, demographics, and lifestyle.

What does 'birds of a feather flock together' mean in segmentation?

People with similar lifestyles and characteristics tend to have similar consumption patterns in neighborhoods.

What is psychographic segmentation?

Segmentation based on lifestyle, personality, and values.

What does lifestyle include?

Activities, interests, and opinions.

What are VALS frameworks used for?

A tool used in psychographic segmentation; psychographics can be better at predicting consumer behavior.

What does identifiable mean when evaluating a segment?

You can determine who is in the market and whether the group is unique.

What does substantial mean when evaluating a segment?

The segment has sufficient size and buying power.

What does reachable mean when evaluating a segment?

The market can become aware of the product, understand its value, and know where to buy it.

What does responsive mean when evaluating a segment?

The segment reacts to the value proposition.

What does profitable mean when evaluating a segment?

The segment has potential considering market growth, competitiveness, and access.

What is CLV?

Customer lifetime value score.

What is a target market?

The group or groups a company focuses its marketing efforts on.

What is target audience

the purchaser

What is a buyer persona?

A representation used to describe a target customer.

What is an undifferentiated target strategy?

Also called mass marketing; a one-size-fits-all approach with uniform benefits and no separate strategies.

What is a differentiated target strategy?

Also called multi-segment marketing; targets several market segments with different offerings.

Benefit of differentiated targeting?

Diversification can reduce risk and overall market share can increase.

Weaknesses of differentiated targeting?

Product costs can increase and customers may experience decision fatigue from too many options.

What is a concentrated target strategy?

Also called niche marketing; offers a strong product to one selected market and seeks a large share of that segment.

Weakness of concentrated targeting?

The company has one main market focus, so there is little diversification if that market is lost.

What is micromarketing/microtargeting?

Also called one-to-one marketing or mass customization; tailoring products as much as possible to individual customers.

Benefit of micromarketing?

Can increase customer loyalty.

Negative of micromarketing?

It takes more time and can make products more expensive.

What is product positioning?

Creating a clear, distinctive, and desirable representation of a product in the consumer's mind.

What is a positioning statement?

A statement that addresses customer needs and communicates the product's intended position.

What is head-to-head positioning?

Positioning a product in comparison with another company's product.

What is differentiation positioning?

Positioning based on differences from competitors

What is a perceptual positioning map?

A map using two or more determinant attributes to show consumer perceptions and product/brand positions.

What is an ideal point?

The ideal product position on a perceptual map.

What is repositioning?

Moving a product in the consumer's mind, often by changing the marketing mix or changing how competitors are perceived.

What is marketing research?

Research designed to answer a specific question by systematically collecting, recording, analyzing, and interpreting data into useful information.

What is a marketing information system (MIS)?

A system that manages information for decision-making.

What are examples of internally generated MIS information?

Data warehouses, data mining, and big data.

What is ongoing marketing intelligence collection?

Continuous collection from sources such as census data, publications, sentiment analysis, trade shows, corporate partners, customers, and competitive intelligence.

What is marketing analytics software?

Software that analyzes sales transactions, market research, and demographic data.

Marketing research process Step 1?

Define the problem or opportunity and identify the research objective/goals.

Marketing research process Step 2?

Design the research plan.

What is secondary data?

Data already available/collected; it is generally less costly.

What are internal sources of secondary data?

MIS and other information already available within the organization.

What are external sources of secondary data?

Syndicated data and other external information sources.

What is a credibility issue with secondary data?

Researchers must consider whether the data contains bias.

What is primary data?

Data collected for the research being conducted.

What is exploratory qualitative research?

Research used to gather preliminary information, help define the problem, and suggest hypotheses.

What is quantitative exploratory research?

Research that explains the market situation and defines opinions, attitudes, or behaviors using responses structured for statistical testing.

What is experimental/causal research?

Research that systematically manipulates variables to determine cause-and-effect relationships.

What is ethnographic research?

Observing people in their natural habitat to understand product use, selection actions, and product interaction.

What is observational research?

Research that observes people, personally, unobtrusively, or mechanically, to see behaviors they may not be able or willing to report.

What is a one-on-one interview?

An in-depth interview with someone who represents the target market.

What is a focus group?

Usually 8-12 people who interact while a moderator discusses topics and collects verbal and nonverbal information.

What is an unstructured survey question?

An open-ended question, such as an essay response.

What is a structured survey question?

A question with set answer choices, such as multiple choice.

What is a warm-up question?

An easier opening survey question used to get respondents started.

What is the foot-in-the-door technique?

Getting a person to say yes to something small makes them more likely to say yes again.

Survey questions should avoid what?

Leading, ambiguous, double-barreled, sensitive, and jargon-filled questions.

What is a population?

The entire target market.

What is a sample?

A subset of the population.

What is a sample frame?

People included in the study.

What is a sampling unit?

The individual unit in the sample.

What is sample size?

The number of units in the sample.

What is a probability sample?

A sample where units have a known and equal chance of selection.

What is a nonprobability sample?

A sample where the chance of selection is not known/equal, so it may not represent the entire population.

Which research step is most costly and subject to errors?

Step 5: collect the data.

What is data cleaning?

Removing duplicate data, correcting data, and avoiding influences on results.

What are validity and reliability/readability concerned with?

Whether the research tests what it intends to test and whether repeating it would produce the same results.

Purpose of analyzing and interpreting data?

Convert data into information that can describe, explain, predict, and/or evaluate a situation.

What belongs in a marketing research report?

Executive summary, research objectives, methodology, limitations, detailed findings, recommendations/conclusions, and supplements such as charts, graphs, or survey questions.

What is price?

A judgment of value; value relates to quality and price, and consumers also give up things such as time and energy.

Why is pricing challenging?

It is the only revenue generator; profit equals total revenue minus total costs.

Key to a successful pricing strategy?

Match the product with the customer's value perceptions.

What is price anchoring?

An initial price or piece of information creates a reference point that influences how later prices are judged.

What are artificial time constraints?

Time limits that create fear of missing out and encourage consumers to act quickly.

What is price appearance?

How a price is visually presented, such as $30 versus $30.00 or $30.27.

What is price signaling?

Using price as a signal of value or quality; prices that are too high or too low can send negative signals.

What is customer-value pricing objective?

Pricing based on the value the product adds to the customer's life and the customer's value perception.

What is cost-based pricing objective?

Pricing based on the cost of production.

What is sales-oriented pricing?

Pricing intended to boost sales volume, such as lowering prices to move inventory or increasing prices.

What is discount pricing?

Pricing at a reduced price to encourage sales.

What is premium pricing?

Pricing a product higher because it is positioned as better than alternatives.

What is market-share-oriented pricing?

Pricing intended to build market share.

What is target-return pricing?

Pricing based on achieving a specific profit goal while considering costs and revenue.

What is competition-oriented pricing?

Setting price in relation to competitors, such as slightly below a competitor.

What is customer-driven pricing?

Pricing set by the customer/value they perceive.

What is demand elasticity?

The percentage change in quantity demanded divided by the percentage change in price.

What is elastic demand?

Demand changes when price changes.

What is inelastic demand?

Demand changes little or not at all when price changes.

Factors affecting elasticity?

Availability of substitutes, income, time, and cross-elasticity of demand.

What is cross-elasticity of demand?

A price change for one product affects demand/price relationships for another product.

Total costs formula?

Total costs = fixed costs + variable costs.

What are fixed costs?

Costs that stay the same regardless of how much is produced.

What are variable costs?

Costs that rise or fall based on production or units sold.

What external factors affect pricing?

Macroenvironment, competitors' costs, product life-cycle stage, and the status of the economy.