Marketing Study Guide Chapters 5, 6 & 12

Segmentation

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

Multi-Segment Marketing

Marketing to more than one market segment.

Demographic Segmentation

Grouping consumers based on easily measured characteristics such as age, gender, income, education, and ethnicity.

Geographic Segmentation

Grouping consumers based on location.

Proximity Marketing

Targeting consumers based on their current location.

Geocoding

Using a consumer's home/location for targeting.

Behavioral Segmentation

Grouping consumers based on their behaviors and the benefits they seek.

Benefit Segmentation

Grouping consumers based on the benefits they want from a product.

Occasion Segmentation

Grouping consumers based on when they use a product, such as weddings, birthdays, or tailgates.

Usage-Based Segmentation

Grouping consumers based on how often they use a product: non-users, moderate users, or heavy users.

Geodemographic Segmentation

Grouping consumers based on geography, demographics, and lifestyle.

Psychographic Segmentation

Grouping consumers based on lifestyle, personality, and values.

Lifestyle

A person's activities, interests, and opinions.

Personality

Characteristics that are correlated with purchasing habits.

VALS Framework

A tool used to understand consumers through psychographic characteristics.

Identifiable

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

Substantial

The segment is large enough and has enough buying power.

Reachable

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

Responsive

How consumers react to the company's value proposition.

Profitable

The segment has potential based on market growth, competition, and access.

Customer Lifetime Value (CLV)

The value a customer provides over their relationship with a company.

Target Market

The group a company chooses to focus its marketing efforts on.

Target Audience

The purchaser or intended audience for a product or message.

Buyer Persona

A representation of a target customer used to understand and target them.

Undifferentiated Target Strategy / Mass Marketing

One strategy for the entire market; 'one size fits all.'

Differentiated Target Strategy / Multi-Segment Marketing

Targets several market segments with different offerings.

Concentrated Target Strategy / Niche Marketing

Focuses on one specific market segment.

Micromarketing / One-to-One Marketing / Mass Customization

Tailoring products or marketing as much as possible to individual customers.

Product Positioning

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

Positioning Statement

A statement that addresses customer needs.

Head-to-Head Positioning

Positioning a product in comparison to a competitor's product.

Differentiation Positioning

Positioning a product based on what makes it different from competitors.

Perceptual Positioning Map

A map showing how consumers perceive products/brands based on two or more attributes.

Ideal Point

The ideal product position on a perceptual positioning map.

Repositioning

Changing how a product is perceived in the consumer's mind, including changes to price, product, place, promotion, color, etc.

Marketing Research

Systematically collecting, recording, analyzing, and interpreting data to answer a specific question.

Marketing Information System (MIS)

Manages information used for decision-making.

Data Warehouse

Stores data for use by an organization.

Data Mining

Examining data to find useful information or patterns.

Big Data

Large amounts of data used to gain useful information.

Sentiment Analysis

Collecting information about how customers feel about a product or brand.

Competitive Intelligence

Proactively collecting information about competitors.

Marketing Analytics Software

Analyzes sales, market research, and demographic data.

Secondary Data

Data that has already been collected and is available to use.

Primary Data

New data collected specifically for the current research.

Internal Sources

Information collected from inside the organization, such as MIS.

External Sources

Information collected from outside the organization.

Syndicated Data

Data collected by a research company and sold to companies for a fee.

Exploratory Research

Research used to gather preliminary information and understand a problem.

Quantitative Research

Research using structured responses that can be statistically tested.

Experimental/Causal Research

Systematically changing variables to determine cause-and-effect relationships.

Ethnographic Research

Observing people in their natural environment to understand how they use products.

Step 1: Define the Problem/Opportunity

Determine what problem needs to be solved and the research objectives.

Step 2: Design the Research Plan

Decide what type of data and research will be used.

Step 3: Determine Data Collection Method

Decide how the information will be collected.

Step 4: Design the Sample

Determine who will participate and how many people will be included.

Step 5: Collect the Data

Gather information; this step is costly and subject to errors.

Step 6: Analyze & Interpret the Data

Examine the data and convert it into useful information.

Step 7: Prepare the Research Report

Present objectives, methodology, limitations, findings, and recommendations/conclusions.

Observational Research

Watching people and their behavior rather than asking them directly.

One-on-One Interview

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

Focus Group

Usually 8-12 people who discuss topics with a moderator while researchers collect information.

Survey/Questionnaire

Asking people a series of questions to collect information.

Unstructured Question

An open-ended question where the person creates their own answer.

Structured Question

A question with predetermined answer choices.

Warm-Up Questions

Easier questions used at the beginning of a survey.

Foot-in-the-Door Technique

Getting someone to say yes to a smaller request, making them more likely to say yes to another request.

Leading Question

A question that pushes respondents toward a particular answer.

Ambiguous Question

A question that is unclear.

Double-Barreled Question

A question that asks more than one thing at once.

Jargon

Specialized language that may be difficult for the target audience to understand.

Population

The entire target market being studied.

Sample

A smaller subset of the population.

Sample Frame

The people who are included or available to be included in the study.

Sampling Unit

The individual unit being studied.

Sample Size

The number of units/people included in the sample.

Probability Sample

A sample where members have a known/equal chance of being selected.

Nonprobability Sample

A sample where members do not have a known/equal chance of being selected.

Data Cleaning

Removing duplicate data, correcting data, and making sure errors do not influence results.

Validity

Whether the research actually tests what it was supposed to test.

Reliability

Whether the same research would produce the same results if repeated.

Executive Summary

A brief overview of the research.

Methodology

Explanation of how the research was conducted.

Limitations

Factors that restricted the research, such as time, money, or sample size.

Price

A customer's judgment of the value of a product.

Value

The benefits a customer receives compared with what they give up, including money, time, and energy.

Pricing Strategy

A company's approach to setting prices for its products/services.

Profit

Total revenue minus total costs.

Price Anchoring

When an initial price influences how consumers judge another price.

Artificial Time Constraints

Creating a limited amount of time to encourage customers to buy because of fear of missing out.

Price Appearance

The way a price is displayed can affect how expensive consumers think it is.

Price Signaling

Using price to communicate the quality or value of a product.

Customer-Value Pricing

Setting price based on the value added to the customer's life.

Cost-Based Pricing

Setting price based on the cost of production.

Sales-Oriented Pricing

Pricing to increase sales volume.

Discount Pricing

Lowering prices to increase sales.

Premium Pricing

Charging a higher price because the product is viewed as better.

Market Share-Oriented Pricing

Pricing to build market share.

Target Return Pricing

Pricing to achieve a specific profit goal.

Competition-Based Pricing

Setting prices based on competitors' prices.