Marketing Quiz 3

Market segmentation

dividing the market into segments of customers who have different needs, characteristics, or behaviors 

Market targeting

evaluating each market segment attractiveness and choosing which segments to go after

Differentiation

differentiating the firm’s market offering to create superior customer value

Positioning

arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Segmenting consumer markets: Geographical

Where (country, region, climate zone)

E.g. Target selling red sox themed merchandise in the target next to fenway park

Segmenting consumer markets: Demographic

age, life-cycle stage, gender, income, generation, religion

E.g. credit card companies targeting affluent customers with an offering

Segmenting consumer markets: Psychographic

personality, lifestyle, interests, opinions

E.g. Panera planning to remove toxic additives from their food

Segmenting consumer markets: Behavioral

thoughts, usage rate, price sensitive consumers, product knowledge, benefits sought, loyalty status

E.g. starbucks selling a seasonal pumpkin spice latte

Intermarket segmentation

Group customers of similar needs and buying behaviors even if they are located in different countries

E.g. Zara targeting cost conscious customers but value seeking ones all around the world

Requirements for effective segmentation: Measurable

the size, purchasing power, and profiles of the segments can be measured

Requirements for effective segmentation: Accessible

The segments can be effectively reached and served

Requirements for effective segmentation: Substantial

the market segments are large or profitable enough to serve

Requirements for effective segmentation: Differentiable

consumers in a segment should have similar needs, and these needs should differ from the needs of consumers in other segments

Requirements for effective segmentation: Actionable

attracting and serving customers in the segments identified, having the capabilities to serve the identified segments

T/F: Selecting the largest, fastest growing segments is always the most attractive

False, smaller companies may lack the skills/resources needed to serve those segments

Undifferentiated marketing (mass marketing)

ignoring segment differences and go after the whole market with one offer

E.g. Massachusetts water resources authority (suppliers most of the east of Massachusetts water)

Differentiated marketing (segmented marketing)

a firm targets several market segments and designs separate offers for each

E.g. IHG offering different types of hotels (Westin, courtyard Marriott, the ritz)

Concentrated marketing (niche marketing)

a firm goes after a large share of one or a few segments or niches

T/F: When a firm’s resources are limited, concentrating marketing is best

True

Micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments

Local marketing

tailoring brands and marketing to the needs and wants of local customer segments (e.g. cities, neighborhoods, specific stores)

E.g. home depot suggesting different products from those who live in Oregon vs Florida

Individual marketing (mass customization)

tailoring products and marketing programs to the needs and wants of individual customers

Socially responsible target marketing

a way for companies to be accountable for their practices and to contribute to the interests of those being targeted

Value proposition

how the company creates different value for targeted segments and what positions it wants to occupy in those segments

Positioning maps

perceptual positioning maps show consumer perceptions of their brands vs. those of competing products on important buying dimensions

Positioning maps: buying dimensions

Luxury/performance on (orientation) x-axis, (price) on y-axis

Positioning maps: circle size

Size of each circle indicates the brand’s relative market share in the segment

Product differentiation

differentiated on features, performance, style, design

Services differentiation

speed, convenience, quality of customer service

Channels differentiation

channel coverage, expertise, performance

People differentiation

Hiring and training people better than others

Image differentiation

conveying a product’s benefits and positioning

Possible value propositions

Top and right cells are the winning propositions, center cell is a marginal proposition, lower left cells are losing proposition

Possible value propositions: More for more

providing the most upscale product or service and charging a higher price to cover the higher costs

E.g. starbucks charging premium prices for coffee, Whole Foods

Possible value propositions: More for the same

offering more for the same price

E.g. target positioning as the “upscale discounter”

Possible value propositions: The same for less

offering the same products and services for a cheaper price

E.g. Walmart

Possible value propositions: Less for much less

products that offer less and therefore, cost less to make

E.g. Aldi being cheap but offering less selections than typical groceries and private labels

Possible value propositions: More for less (most ideal)

best selection/service/products for the lowest price

e.g. Trader Joe’s

Positioning statement prompt

to (target segment and need) our (brand) is (concept) that (point of difference)

Product

anything that can be offered to the market for attention, acquisition, use, or consumption that can satisfy a want or need

Services (intangible)

activities, benefits, or satisfaction offered for sale

E.g. baking, hotels, massage, airline travel, repair services

Pure tangible good

no services accompany the good

Pure service

no tangible part of the offering

Consumer products

Products and services bought by final consumers for personal consumption

Convenience products

Products that customers buy frequently, low priced, readily available

E.g. laundry detergent, fast food, soft drinks

Shopping products

less frequently purchased

E.g. furniture, clothing, major appliances, hotel services

Specialty products

products and services with unique characteristics or brand identifications

E.g. specific car brands, designer clothes, gourmet foods

Unsought products

products that a consumer either does or does not know about but does not normally consider buying

E.g. life insurance, preplanned funeral services, blood donations

Industrial products

products purchased for further processing or for use in conducting business

E.g. buying a lawnmower used in a landscaping business

Organization marketing

activities taken to create, maintain, or change the attitudes and behavior of target consumers toward an organization

Person marketing

activities to create, maintain, or change attitudes or behavior toward particular people

E.g. presidential speeches

Place marketing

activities taken to create, maintain, or change attitudes and behavior towards particular places

E.g. cities promotional ads, “its more fun in the Philippines”

Idea (social) marketing

Using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being

E.g. Women in STEM ads

Private label brands

products manufactured by one company but sold under another company's brand

E.g. kirkland signature, great value, amazon basics

Product and service attributes

the benefits the product/service will offer (e.g. quality, features, style and design)

Branding

a name, term, sign, symbol, or design that identifies the maker or seller of a product or service

Packaging

designing or producing the container or wrapper for a product

Labeling and logos

the label identifies the product or brand, describe things about the product, helps promote the brand and engage customers

Product line

a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, marketed the same, or fall within given price ranges

Product line length

the number of items in a product line

Product line stretching

increasing a product line beyond its current range

Stretch downward

To plug a market hole or respond to a competitors offerings

Stretch upward

To add prestige to their current offerings

The nature and characteristics of a service: Intangibility

services that cannot be tasted, seen, or felt, smelled, or heard before purchase

E.g. restaurants showing what they have to offer, taking good photos of their food

The nature and characteristics of a service: Inseparability

services that cannot be separated from their providers

The nature and characteristics of a service: Variability

Quality of service that depends on who provides them and when, where, and how

E.g. A masseuse providing better service than another assigned masseuse

The nature and characteristics of a service: Perishability

services that cannot be stored for later sale or use

E.g. doctors charging patients for a missed appointment

The service profit chain

links profits with employee and customer satisfaction

Interactive marketing

training service employees to interact with customers to satisfy their needs

Customer retention

a service firm’s ability to hang on to its customers depends on how consistently it delivers value to them

Service recovery

companies can turn negative experiences into positive ones

Brand equity

the differential effect that knowing the brand name has on customer response to the product or its marketing

Brand value

The total financial value of a brand

Brand development

a framework for analyzing brand development opportunities

Brand development: Line extensions

(existing brand name, existing product category)

E.g. new quest bar flavor

Brand development: Brand extensions

(existing brand name, new product category):

E.g. snickers bars extending to ice cream bars/pints

Brand development: Multibrands

(new brand name, existing product category):

E.g. PepsiCo marketing 10+ brands of soft drinks (pepsi, mountain dew, root beer)

Brand development: New brands

(new brand name, new product category)

E.g. P&G selling JIF peanut butter, pringles chips, duracell batteries, etc.