Lecture 5 (AI)

Question 1

What is the primary focus of target marketing differentiation strategies?

Answer 1

Creating customer value, satisfaction, and loyalty.

Target marketing differentiation strategies aim to create unique offerings that resonate with specific customer segments.

Question 2

Define market segmentation.

Answer 2

Dividing a market into segments based on shared characteristics.

This allows companies to target specific groups more effectively.

Question 3

What are the different levels of market segmentation?

Answer 3

• Mass Marketing
• Micromarketing
• Segment Group Marketing
• Niche Marketing
• Local Marketing
• Individual Marketing

Question 4

What is mass marketing?

Answer 4

Mass production, distribution, and communication of one offering for all.

This strategy aims to create the largest potential market.

Question 5

What distinguishes micromarketing from mass marketing?

Answer 5

Micromarketing targets specific segments, niches, local areas, and individuals.

It is more common in today’s competitive landscape.

Question 6

What is a market segment?

Answer 6

Groups of customers who share a similar set of needs and wants.

Question 7

What is niche marketing?

Answer 7

Targeting more narrowly defined customer groups seeking a distinctive mix of benefits.

Niche markets are generally small but can be profitable.

Question 8

What is local marketing?

Answer 8

Tailoring marketing programs to specific local groups.

This approach aims to be personally relevant to consumers.

Question 9

What is individual marketing?

Answer 9

Customized marketing where offerings are developed to meet individual customer needs.

Also known as ‘segments of one’.

Question 10

What are the two broad groups of variables for segmenting consumer markets?

Answer 10

• Descriptive characteristics
• Behavioral considerations

Question 11

What is geographic segmentation?

Answer 11

Dividing a market into different geographic units.

Question 12

What factors are considered in demographic segmentation?

Answer 12

• Age and Life Cycle Stage
• Gender
• Generation
• Income
• Social Status

Question 13

What is psychographic segmentation?

Answer 13

Dividing buyers based on personality traits, lifestyle, or values.

Question 14

What are AIO factors in psychographic profiling?

Answer 14

• Activities
• Interests
• Opinions

Question 15

Define behavioral segmentation.

Answer 15

Dividing buyers based on their behavior regarding occasions, benefits, user status, and usage rate.

Question 16

What are the buyer-readiness stages?

Answer 16

• Unaware
• Aware
• Interested
• Desiring
• Purchasing

Question 17

What criteria must market segments meet to be meaningful?

Answer 17

• Measurable
• Accessible
• Substantial
• Differentiable
• Actionable

Question 18

What is positioning in marketing?

Answer 18

Designing the company’s market offering to occupy a distinctive place in the minds of the target market.

Question 19

What are points-of-difference?

Answer 19

Attributes or benefits strongly associated with a brand that differentiate it from competitors.

Question 20

What are points-of-parity?

Answer 20

Associations that are not unique to the brand and may be shared with other brands.

Question 21

What is the main advantage of local marketing?

Answer 21

Firms can respond to local requirements more effectively.

Question 22

True or False: Niche markets are likely to attract many powerful competitors.

Answer 22

False.

Question 23

What are Points-of-Parity (POPs)?

Answer 23

Associations that are not necessarily unique to the brand and may be shared with other brands

Come in two forms: Category Points-of-Parity and Competitive Points-of-Parity.

Question 24

What are Category Points-of-Parity?

Answer 24

Category-specific associations deemed to be necessary (but not sufficient) for a legitimate and credible offering.

Question 25

What are Competitive Points-of-Parity?

Answer 25

Associations designed to negate competitors’ points-of-difference.

Question 26

What is a challenge in creating Points-of-Parity (POPs) and Points-of-Difference (PODs)?

Answer 26

Many of the attributes and benefits that make up the POPs and PODs are often negatively correlated.

Question 27

What is Perceptual or Positioning Mapping?

Answer 27

A tool to plot the position of an offering by comparing the own brand with its competitors and considering what customers value.

Question 28

What is Repositioning?

Answer 28

Companies must be prepared to make both proactive and reactive positioning decisions depending on market conditions.

Question 29

When might Repositioning be necessary?

Answer 29

* A competitor launches an offering that is as good as/better than the own brand * Consumers’ preferences change * New market categories emerge * An initial launch error is done * The brand needs to change its image

Question 30

What is Cost Leadership?

Answer 30

Developing and sustaining cost/efficiency gains by offering an acceptable substitute to competing offerings from a reduced cost base.

Question 31

What is the risk associated with Cost Leadership?

Answer 31

Can backfire if market prices are squeezed downwards due to fierce competition.

Question 32

What is Distinctive Superior Quality?

Answer 32

Creating strong customer-perceived value for offerings through the right quality attributes and transactional attributes.

Question 33

What are some types of Differentiation Strategies?

Answer 33

* Attributes * Benefits * Values * Personnel differentiation * Channel differentiation * Image differentiation

Question 34

What is Customer-Perceived Value?

Answer 34

The difference between potential customers’ evaluations of all the benefits and costs of a company’s offering and the perceived alternatives.

Question 35

What are Total Customer Benefits?

Answer 35

Perceived monetary value of the sum of economic, functional, and psychological benefits expected from a given offering.

Question 36

What are Total Customer Costs?

Answer 36

Perceived sum of costs that customers expect to incur in evaluating, obtaining, using, and disposing a market offering.

Question 37

What is Customer Satisfaction?

Answer 37

A person’s feelings of pleasure or disappointment that result from comparing a product or service’s perceived performance to expectations.

Question 38

What factors influence Customer Satisfaction?

Answer 38

* How well customers feel their expectations are met * The perceived performance of a product or service

Question 39

What is the satisfaction-loyalty link?

Answer 39

Highly satisfied customers are more likely to be loyal and buy more from the company.

Question 40

What is the recommended approach for handling customer complaints?

Answer 40

* Make it easy to complain * Handle complaints quickly * Have empathetic staff * Avoid blaming the customer

Question 41

What is Customer Profitability?

Answer 41

When revenue exceeds costs for attracting, selling, and servicing customers over time.

Question 42

What are ways to improve the value of a company’s customer base?

Answer 42

* Reduce the rate of customer defection * Extend existing and future customer relationships * Enhance the growth potential of each customer * Make low-profit customers more profitable or let them go * Pay more attention to high-value customers

Question 43

What is the impact of Employee Presence on customer satisfaction?

Answer 43

Employee presence positively impacts consumer loyalty, mediated by customers’ pleasurable feelings.

Question 44

What are Loyalty Programs?

Answer 44

Programs that reward customers who buy frequently and in substantial amounts.

Question 45

What are Frequency Programs?

Answer 45

Rewards given to customers who buy frequently and in substantial amounts.

Question 46

What are Club Membership Programs?

Answer 46

Programs open to all who purchase a product/service or to a limited group if a small fee is paid.

Question 47

Fill in the blank: Customer satisfaction is important but not always the _______.

Answer 47

[ultimate goal]

Question 48

What type of customers do companies target for loyalty programs?

Answer 48

Customers who buy frequently and in substantial amounts ## Footnote Examples include airlines, hotels, credit card companies, and supermarket chains.

Question 49

What are Club Membership Programs?

Answer 49

Programs open to all who purchase a product/service or to a limited group for a small fee ## Footnote This approach helps prevent less loyal customers from joining.

Question 50

What is the main purpose of personalized marketing?

Answer 50

To build customer loyalty ## Footnote It requires collecting data about targeted customers.

Question 51

What is necessary for effective personalized marketing?

Answer 51

Collecting data about the customers being targeted ## Footnote This information is crucial for presenting tailor-made offerings.

Question 52

True or False: Club Membership Programs are only open to a limited group of customers.

Answer 52

False ## Footnote They can be open to all who purchase a product/service.

Question 53

Fill in the blank: Personalized marketing necessitates collecting _______ about the customers.

Answer 53

data

Question 54

What do companies consider when presenting new offerings in personalized marketing?

Answer 54

The information collected about customers ## Footnote This includes their preferences and behavior.