Market CH6-7 Flashcards

Chapter 6: Designing a Customer Value–Driven Marketing Strategy

• Steps Involved:

  • Market Segmentation:

  • Definition: The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors.

  • Other segmentation methods include demographic, geographic, psychographic, behavior, etc.

  • Targeting:

  • Definition: Evaluating the attractiveness of each market segment and selecting one or more segments to serve.

  • Differentiation:

  • Definition: Distinguishing the market offering to create superior customer value.

  • Positioning:

  • Definition: Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Consumer Market Segmentation Considerations

• Wants: Different preferences and desires among consumers.

• Resources: Varying levels of income and financial capability.

• Locations: Geographic differences impacting consumer behavior.

• Buying Attitudes: Diverse perspectives and approaches to purchasing.

• Buying Practices: Varied habits and methods of buying products.

Types of Segmentation

• Demographic Segmentation:

  • Definition: Dividing the market based on characteristics such as age, gender, income, religion, ethnicity, education, etc.

• Geographic Segmentation:

  • Definition: Dividing the market based on region and geographic location.

• Psychographic Segmentation:

  • Definition: Dividing the market based on lifestyle and personality characteristics.

• Behavior Segmentation:

  • Definition: Dividing the market based on consumer behaviors, loyalty status, and purchasing habits.

Marketing Steps

• Analyzing Current State:

  • Evaluation of customers, competitors, company, and macroenvironment.

• STP: Segmentation, Targeting, Positioning.

• The Marketing Mix:

  • 4Ps: Product, Price, Place, Promotion.

Types of Customers

• Innovators

• Believers

• Achievers

• Strivers

• Experiences

• Survivors

• Thinkers

• Makers

Types of Marketing

• Undifferentiated (Mass) Marketing:

  • A single marketing strategy focusing on the entire market.

• Differentiated (Segmented) Marketing:

  • A marketing strategy that targets several market segments.

• Micro (Individual) Marketing:

  • Local marketing vs individual marketing.

• Concentrated (Niche) Marketing:

  • Focusing on a specific, targeted segment of the market.

Evaluation of Market Segments

• Measurable: Size can be quantified.

• Substantial: The segment must be large enough and profitable.

• Differentiable: Segments must be distinct and unique.

• Actionable: Needs must be able to be served effectively by the marketer.

Chapter 7: Products and Customer Experiences

• Core Idea: Products and companies must also focus on customer experiences alongside quality.

Customer Experiences

• Definition: Market offerings with strong sensory or emotional components that evolve over time.

Product Definitions

• Product:

  • Definition: Anything offered to a market for attention, acquisition, use, or consumption that satisfies a want or need.

  • Includes both tangible and intangible offerings.

• Service:

  • Definition: An intangible form of product consisting of an activity, benefit, or satisfaction offered for consumption or sale, not leading to ownership.

• Market Offering:

  • Products that a company can offer, encompassing tangible and intangible objects.

• Customer Solutions:

  • Bundles of products and services designed to comprehensively solve customer problems.

Consumer Products Classifications

• Convenience Products:

  • Products bought frequently with minimal effort.

• Shopping Products:

  • Products that require more consideration and comparison (e.g., washers/dryers).

• Specialty Products:

  • Significant purchases that require extensive decision-making.

• Unsought Products:

  • Products consumers do not think about buying until a need arises.

Industrial Products

• Definition: Products purchased for further processing, use in business operations, or resale.

• Categories:

  • Materials and Parts: Raw materials and manufactured components.

  • Capital Items: Industrial products that aid in production processes.

  • Supplies and Services: Operating supplies and repair items.

  • Products for Resale: Purchased by wholesalers for resale to final consumers.

Marketing Beyond Products

• Person Marketing:

  • Activities aimed at creating or changing attitudes towards particular individuals.

• Place Marketing:

  • Activities that focus on changing attitudes towards specific locations.

• Social Marketing:

  • Use of traditional marketing to promote societal well-being.

Three Levels of Product

• Core Customer Value:

  • The fundamental need or want the customer is satisfying.

• Actual Product:

  • Includes brand name, features, packaging design, and quality level.

• Augmented Product:

  • Additional services are offered, such as delivery, credit, after-sales service, and warranty.

Product Decision Process & Strategy

• Product Quality:

  • Reflects on product or service performance, linked to customer value and satisfaction.

• Product Features:

  • A product can have various features that differentiate it from competitors.

• Product Style and Design:

  • Style refers to appearance while design impacts usefulness and aesthetic appeal.

• Branding:

  • Identification of a product through names, symbols, and visual elements.

• Packaging:

  • Designing and producing the product's container or wrapper.

• Labeling and Logos:

  • Range from simple tags to complex graphics that identify and describe products.

• Product Support Services:

  • Support services can contribute significantly to the total offering.

Product Line and Product Mix Decisions

• Product Line Decisions:

  • A collection of products closely related in functionality, consumer group, and sales outlets.

• Product Mix Decisions:

  • Comprises all product lines and items offered for sale by a seller.

  • Width: Number of different product lines carried.

  • Length: Total number of items across product lines.

  • Depth: Number of versions offered for each product type.

  • Consistency: Relatedness across various product lines.

Brand Equity

• Definition: The value added to a product based on consumers' perceptions and interactions with the brand.

Chapter 8: Innovations in Products

Types of Innovations

• Continuous Innovations:

  • Modifications to existing products for improved performance or features.

• Dynamically Continuous Innovations:

  • Pronounced modifications that significantly change the way consumers use the product.

• Discontinuous Innovations:

  • Major changes that alter lifestyles and consumer behaviors significantly.