207 exam Flashcards

Question

Examples of Segmentation Bases

Answer 1

- Geographic (ex. country, urban, climate, region) -- ex. coca cola is different in China vs. America - Demographic (ex. age, gender, income, education, family life cycle) -- ex. sport car vs pickup truck caters to two different lifestyles - Psychographic (ex. lifestyles, values, personality, self-concept) -- ex. women's watches vs men's watches - Behavioral (ex. benefits sought, usage rates, user status, loyalty) -- ex. crest products only for dental

Answer 2

- Achievers - Experiencers - Makers - Survivors - Strivers - Believers - Thinkers - Innovators

Answer 3

Size and growth 1. Size - market potential, current market penetration 2. Growth - growth forecasts of adopting new technologies Structural Characteristics 3. Competition - barriers to entry, barriers to exist, position of competitors, ability to retaliate 4. Segment Saturation - gaps in the market 5. Protectability - patentability of products, barriers to entry 6. Environmental Risk - economic, political, and technological change Product-Market Fit 7. Fit - coherence with company's strengths and image 8. Relationships with other segments - synergy, cost interactions, image transfers, cannibalization 9. Profitability - entry costs, margin levels, return on investment

Answer 4

Managing segmentation for Marketing Analytics 1. Define segmentation problem, 2. Identify data needs 3. Conduct market research 4. Build segmentation database 5. Define market segments 6. Describe market segments 7. Implement results

Answer 5

Target Market is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

Answer 6

Targeting strategies: Undifferentiated Targeting Strategy, or Mass Marketing (ex. bakery) Multisegmented (Differentiated) Targeting Strategy (ex. Vanilla Coca Cola) Concentrated (Niche) Targeting Strategy (Clinique Cosmetics) Micromarketing (Mariposa which makes custom bikes for racers)

Answer 7

Everyone might be considered as a potential user Not a common strategy i.e. a neighbourhood bakery There are very few mass market products. Even commodity goods such as flour now get differentiated. For different products, consumers fall in different segments.

Answer 8

A firm targets several market segments with a different offering for each i.e. Adidas Reebok (athletic shoes), Rockport (comfortable shoes), TaylorMade-Adidas golf lines

Answer 9

A marketing strategy of selecting a single primary target market and focusing all energies on providing a product to fit that market’s needs

Answer 10

One-to-one marketing An extreme form of segmentation that tailors a product or service to suit an individual customer’s wants or needs i.e. Nike’s online make-your-own-shoe

Answer 11

Advantages: - potential savings on production/marketing costs Disadvantages: - unimaginative product offerings - company more susceptible to competition

Answer 12

Advantages: - concentrates resources - can better meet the needs of a narrowly defied segment - allows some small firms to better compete with larger firms - provides strong positioning Disadvantages: - segments too small or changing - large competitors may more effectively market to niche segment

Answer 13

Advantages: - greater financial success - economies of scale in producing/marketing Disadvantages: - high costs - cannibalization

Answer 14

Advantages: - Delivers highly customized service - high customer engagement/retention - increasing revenue through loyalty Disadvantages: - high costs

Answer 15

Positioning is the Perception of brands and the attributes that people relate to the company Ex. McDonalds: fast-food cheap Volvo: safety, for upscale families who desire a carefree driving experience, offers upmost in safety and dependency Electric cars: Tesla Sustainability: Patagonia

Answer 16

put brand against competitors recognition for brand match target market / identified customer segments helps consumers know what makes your brand different “why choose our company or brand”

Answer 17

Differentiation (what you do on an offering) → creating tangible or intangible differences on one or more attributes between a focal offering and its main competitors

Answer 18

Positioning (what you try to do in the minds of customers) → a set of strategies a firm develops to differentiate its offering in the minds of its target customers. Successful positioning will result in the offering occupying a distinct, important, and sustainable position in the minds of the target market

Answer 19

The place the product occupies in consumers’ minds relative to competing products. Typically defined by consumers on the basis of important attributes. Porsche is positioned on the basis of performance and freedom.

Answer 20

Positioning is how consumers view a company’s products and services based on important attributes. It places a company in mind relative to competing products. Positioning may use one or more of the following strategies: Value – e.g. relationship of price to quality Product Attributes – e.g. innovation, quality, performance, and reliability Benefits and Symbolism Competition – e.g. head to head, differentiation Market Leadership – e.g. leadership position within an industry

Answer 21

Positioning: Benefits and Symbolism This type of positioning emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers

Answer 22

- position against a specific competitor - position against an entire product classification - Firms that lack market leadership often position themselves in contrast with the leader to demonstrate that they offer the same (or better) service and quality. Motel 6 used quirky commercials to poke fun at its low budget approach but still point out that it offered the same services as more expensive hotels.

Answer 23

1. Determine consumers perceptions and evaluations in relation to competitors 2. Identify competitors' positions 3. Determine consumer preferences 4. Select the position 5. Monitor the positioning strategy

Answer 24

Mapping Methods in Marketing - Perceptual maps (similarity-based methods, attribute-based methods) - Preference maps (ideal-point model - unfolding model, vector model) - Joint space maps (includes both perception and preference)

Answer 25

Perceptual maps derived from customer evaluations of competing products along pre-specified attributes. Step1: Identify products and product attributes for evaluation Step2: Obtain perception data from questionnaires given to defined target segments. Step 3: Select a perceptual mapping method. Step 4: Plot the resulting map

Answer 26

Performance: levels at which the product’s primary characteristics Durability: a measure of the product’s expected operating life Reliability: a measure of the probability that a product will malfunction or fail within a specified time period Serviceability: a measure of the ease of fixing a product that malfunctions or fails. Style: how well the product looks and feels to the customer Product image: conveying the emotional aspects of the products i.e. prestige or reputation associated to the product/company Delivery: how the product or service is delivered to the customer Other services: availability warranty or services that add value to the customer’s purchase or use of the product Service image: a number of attributes that contribute to the overall perception of the service i.e. competence, friendliness, and courteousness of service employees Perceived quality: the degree to which the product meets customers’ expectations of what the product/service should be

Answer 27

Preferences allow customers to choose among alternatives. i.e. All customers may perceive Volvo as safe, but not all customers value safety equally. Preferences do not necessarily according to the magnitude of an attribute. They cannot indicate which attributes should be changed to make a focal product more appealing to the target segment

Answer 28

1) ideal point preference model 2) vector preference model

Answer 29

Incorporate both perceptions and preferences into the same map. Two simple methods 1) Averaged ideal-point model: generating an average ideal-point requires a hypothetical ideal brand and it includes averaged perceptions of the ideal brand 2) Averaged vector model: The associated vector shows the direction of increasing preference. The further a product appears along this vector the more it is preferred.

Answer 30

Marketing helps create value

Answer 31

Production-oriented era (turn of century - 1920): most firms believed a good product would sell itself Sales-oriented era (1920-1950): firms found an answer to overproduction by focusing on sales Market-oriented era (1950-1990): the focus was on what customers wanted. Value-based era (1990- present): maintains the market orientation but also includes a focus on giving greater value than the competition.

Answer 32

Value means different things to different people. Value can be measured by what a customer exchanges for various options that can satisfy a want of a need. For most customers, value is a function of the benefit relative to the price paid. Value = Benefits - Price

Answer 33

Functional: i.e., the product “does the job” Psychological: i.e., Nike shoes provide social status Economic: i.e., Walmart offers branded products at everyday low prices

Answer 34

Monetary: i.e. $, euro, £ Perceived risk Inconvenience

Answer 35

- performance risk - financial risk - social risk - physiological risk - psychological risk

Answer 36

Subject and importance of a need are the primary bases for a person’s perception of the need. Needs higher up in the hierarchy are more crucial than those farther down. NEC positioned its mobile phone as a safety device especially for women to place it’s importance higher in the hierarchy.

Answer 37

Physiological needs (hunger, thirst) Safety needs (security protection) Social needs (sense of belonging, love) Esteem needs (self-esteem, recognition, status) Self-actualization needs (Self-development and realization)

Answer 38

The urgency, frequency, and duration of a need defile it’s temporal dimensions. An organization depending on reliable responses to customer telephone calls need reliable system and calling capacity An organizations may need to update its new telephone switching system every five years. A new telephone switching system may exist for several months before the upgraded system is ready.

Answer 39

Internal engineering assessment evaluations by the selling firm’s own managers and engineers based on lab tests. i.e., alpha test and computer simulation Indirect survey questions Firms often query customers about the value they place on satisfying a need or resolving a problem. Salespeople may ask company personnel about the effect of one or more changes in existing offerings on certain aspects of their needs or problems. Field value-in-use (VIU) assessment customer and supplier to conduct a joint value assessment. i.e., to investigate how much customers are willing to pay for a new product, given the extra benefits that it offers.

Answer 40

Unconstrained question measures Focus groups: five to ten customers convene for a several hour discussions with a trained moderator about their perceptions, attitudes, preferences, and usage of a product or service. Direct survey questions: A sample of customers who agree to complete a questionnaire that includes a description of one or more potential product offerings or concepts. Importance ratings: The most popular approaches to measuring customer value. Respondents receive a set of attributes and describe a product offering and rate them according to their importance to them. Constrained question measures Conjoint analysis: the most widely used approaches, employing a field research survey to ask respondents to provide their overall ratings for each of a set of potential offerings. Benchmarking: Respondents receive descriptions of a product offering and represents the best available competitive product or service which thus serves as a benchmark.

Answer 41

Choice models: Using past behavior to infer or estimate the value of product characteristics that might best explain or predict actual behavior. Firms can observe choices and infer the value that best explains those choices. Output is an estimate of importance weights and probabilities of each market alternative for each customer. Data mining: Many organizations keep extensive records of customer purchases and these data can be cross matched with other data pertaining to customer characteristics. Organizations can analyze the information to product segments according to customer profitability, the range of products and services acquired, and so forth. The lifetime value of a customer generally equals the total profit a firm can expect to earn from that customer during the time the firm continues to maintain an ongoing relationship with the customer. The growing availability of CRM (customer relationship management systems) and other customer database permits marketers to track the behaviors of individual customers in far more detail than ever before.

Answer 42

Customer Lifetime Value (CLV) presents value of a stream of revenue a customer produces Focus on long-term relationship, not a single transaction The idea here is that a customer can be viewed as a property with an associated earnings stream—rents come from the property but investments are needed to keep the property up. And the “property” may have values and costs beyond pure economics

Answer 43

Two aspects of customer value: 1) Economic Value: (Risk Adjusted) Revenue Flow LESS Cost-to-Serve 2) Relationship Value: Reference, Referral, Learning, Innovation

Answer 44

Reference Accounts (Give us prestige, high credibility): thought leaders in the medical field and provide the firm with credibility Referral Accounts (Give us high-quality leads): accounts that can be strong recommendation Learning Accounts (Help us refine our offerings/beta testers): accounts are willing to provide valuable feedback and suggestions prior to full market launches Innovation Accounts (Help us to develop new offerings): mostly university-based physicians Customers can provide several other kinds of value to a supplier; they might be unprofitable on a direct cash flow basis, but provide other, very valuable characteristics that help support overall market success. This chart illustrates some of those values. Objectives for CLV-Based Management: Increase customer retention Improve customer selectivity Meet competitive imperatives Boost cost efficiency

Answer 45

A product is the item offered for sale. A product can be an item or service there is more to its physical shape or basic service function.

Answer 46

What is product for marketers? Product is anything that can be offered to a market to satisfy a need or want. For example, physical goods, services, experiences, events, people, places, properties, information, and ideas.

Answer 47

Marketers involved with the development, design, and sale of products think of them in an interrelated fashion. At the center is the core customer value, next is the actual product, followed by associated services. Actual product: brand name, quality level, packaging features/design Associated services: financing, product warranty, product support

Answer 48

A complex issue Requiring analytical and strategic thinking Can be called tuition, rent, interest, a fee, dues, a fare … or a price Generally money is exchanged Sometimes not money (goods, services …)

Answer 49

Price is a signal Prices can be both too high and too low Price too low may signal poor quality Price set too high might signal low value Consumers recognize price as a signal. If a marketer sets a price too high or too low, the wrong message gets sent to the market. Remind students that price refers not just to money but also other costs such as time.

Answer 50

Quantity demanded = f (Price) Profit = Quantity (Price) ⋅ [Price – Unit Cost] Find price to maximize profit (Find price where Marginal Cost = Marginal Revenue). Core Assumptions: focus on short run profit; focus on immediate customers; price is independent of advertising, promotion, etc.; demand and cost functions are known; unit cost is constant; firm has true control over price; competitors are ignored, etc.

Answer 51

When a company sets its prices as costs + markup percentage or fixed amount (cost plus) Very common, but ignores the current elasticity of demand when setting prices, and will probably not lead, except by chance, to maximum profits Markup pricing makes sense: If average unit costs are fairly constant for different points on the demand function If costs elasticity is constant over time Common in retailing situations → used widely (Although probably not optimal)

Answer 52

When a company bases its prices chiefly on what its competitors are charging rather than on cost or demand Competitive-oriented pricing mostly characterizes markets with homogenous commodities Oil, water, etc. Creates a price-stagnant market If a firm increases prices, loses a lot of market shares If a firm decreases prices, other quickly follow suit Either downward spiral (price war) or stagnation A price war is a price nobody can win (even if you win, you lose) It is usually short-term myopia in action

Answer 53

When a company sets its prices as a function of demand, charging higher prices when demand is high, and lower price when demand is low

Answer 54

Pros: Simple design One measurement per price level Robust, proven method Cons: No margins of error Assumes data accuracy Assumes optimal price is actually measured (what if out of range?)

Answer 55

Pros: Simple design One measurement per price level Robust, proven method Cons: No margins of error Assumes data accuracy Assumes optimal price is actually measured (what if out of range?)

Answer 56

Revenue management is the art and science of selling the right product to the right customer for the right price at the right time. - High fixed cost industries - Service industry (here, we focus on hotels and airlines) - Alternative approaches (temporal price discrimination in the airline/hotel industry) Time-of-day pricing Time when purchased Day of the week pricing Seasonal pricing

Answer 57

Estimate demand for each class of service. Demand arrives over time—so update demand function/remaining supply. Allocate remaining space to: maximize expected profitability meet other criteria subject to situation specific constraints.

Answer 58

Promotional Mix - Advertising - Publicity - Sales promotion - Personal selling - Direct response - Social media

Answer 59

Any form of impersonal, one-way mass communication Paid for by a marketer Traditional advertising media television, radio, newspapers, magazines, billboards, online banner advertising, transit cards, banner ads on social networks, websites, email, blogs Benefit—ability to communication with a large number of people at one time

Answer 60

Affordable method: Setting advertising budget according to what companies can afford. Fluctuating advertising budget Difficult to plan for long-range market development Percent of sales: Many companies set their advertising expenditures at a specified percentage of their sales. i.e. automobile industry Competitive parity method: Setting advertising budgets specifically to match competitors’ outlays Objective/task method Defining advertising objectives as specifically as possible Determine the tasks Estimating the costs of those tasks Model-based /Response Model approach: i.e. advertising response model for online banner and keyword advertising offer firms

Answer 61

Trade Promotions - Case allowances - Advertising allowances - Display allowances - Contests Retailer Promotions - Price cuts - Displays - Feature ads - Retailer coupons - Free goods Consumer Promotions - Coupons - Samples - Price packs - Value packs - Refunds - Contents - Tie-ins

Answer 62

Supply chain: focus on the sequence of firms required to create and deliver goods to the final consumer Logistics Management: focus on the flow of raw materials & finished goods from point of origin to final consumption Distribution Channels: focus on the companies that transfer the ownership of goods from the producer to consumers at the point of consumption

Answer 63

How distribution channels work: the relationships between supplier networks, marketing channels, logistics management, and supply chain management Suppliers --> raw materials and parts flow from supplier to producer --> producer: finished products flow from producer to consumer --> consumers

Answer 64

Clear - easily seen; sharply defined who's the audience? what's the message? clarity more important than aesthetics Clean - thorough; complete labels, axis, gridlines, formatting, right chart type, color choice, etc. Concise - brief but comprehensive not minimalist but not verbose Captivating - to attract and hold by beauty or excellence does it capture attention? is it interesting? does it tell the story?

Answer 65

Tufte’s Five Laws of Data-Ink: 1) Above all else show the data. 2) Maximize the data-ink ratio 3) Erase non-data-ink. 4) Erase redundant data-ink. 5) Revise and edit.

Answer 66

Content position and size should match its importance and frequency of use Use color and formatting to draw attention where needed, rather than to decorate Visually associate data and content that is related Use the needs of the user to drive the layout, rather than forcing layout with an inflexible grid (note: this is a consideration when choosing tools)

Answer 67

Step 1 Understand the Context Step 2 Choose an Appropriate Visual Step 3 Eliminate Clutter Step 4 Draw Attention where you want it Step 5 Think like a Designer Step 6 Tell a Story

Answer 68

Proximity: when things are close together, they appear to be more related. Similarity: when things appear to be similar to each other, they will automatically be grouped together. Enclosure: we perceive objects enclosed as groups. Closure: When we view a shape, we prefer when it is complete. Continuity: if an element is arranged on a curve or a line, it is perceived to be more related than other elements not on the line or the curve. Connection: connected are perceived more related.

207 exam Flashcards

(92 cards)