Week 3 Flashcards
(20 cards)
MASS Market
Markets are people. A market consists of individuals or organisations that have a willingness and ability to purchase products. Mass market → delivering the same marketing programme to everyone without making any significant distinction
Segmenting
= the process of dividing a total market into subgroups (segments) such that each segment consists of buyers and users who share similar characteristics but are different from those in the other segments.
A good segment should be:
(a) Measurable → the size, purchasing power and profiles of the segments can be measured
(b) Differentiable → The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs
(i) Homogeneous (within the segment)
(ii)Heterogeneous (between segments)
(c) Substantial → The market segments are large or profitable enough to serve
(d) Accessible → The market segments can be effectively reached and served
(e) Operational/actionable → Effective programs can be designed for attracting and serving the segments
Before segmenting, it is highly advised to do market research to understand where you will excel most at and what the current market needs are.
But where do you start? You might want to look into:
-demographics (age/gender/income/geography)
-Decision process (awareness/knowledge/experience)
-Behavior (usage/products/channels)
-Motivations (values/needs/desires/occasions)
Segmentation bases:
(1) Geographic → targeting products based on geographical location EX: countries, states, cities, and regions
(2) Demographic → targeting products based on age, gender, and stage of life
(3) Household life cycle → targeting products based on bachelor stage, new married, fully nest 1/2, empty nest, the solitary survivor
4) Geodemographic → targeting products based on attributes on a smaller area that also links with age, gender, educational level, income = Postal code segmentation
(5) Psychographic → Things that fit with your personality, lifestyle, interests, opinions. Eg a gamer, basketball player, Biden supporter etc.
* VALS = Values, Attitudes, Lifestyles → It segments people into 8 types/mindsets using a specific set of psychological traits and key demographics that drive consumer behavior. These are: innovators, thinkers, achievers, experiencers, believers, strivers, makers, survivors. Some of these also link to the Maslow hierarchy of needs.
(6) Mediagraphic → by reading or viewing habits. Eg people that read the NYT will be different from people that read other sorts of newspapers. Or people that are subscribed to certain youtube channels
(7) Behavioural involvement etc.→ based on behaviours such as purchase occasion, usage rate, user status, loyalty status,
Targeting
→ Looks at where to focus, and who to target by using environmental analysis or even a SWOT analysis.
→ A target should have sales/growth potential, not be very competitive, have no excessive barriers to entry/exit and have some unsatisfied needs.
→Targeting strategies look at which type of markets to focus on as wella s making as many people as possible included inorder to gain more traction
Positioning & Mapping Positioning
= differentiating your brand or product from competitors in the mind of consumers. It is the space which the company wants its product to occupy. It is also the way consumers perceive a product. A good business will want to differentiate the brand or product from competitors to make it look more unique. Must consider the complicated set of perceptions, feelings, impressions, memories and experiences consumers have about the brand or product.
Positioning Map: Helps the company think of the following: Where am I? Where are my competitors? Do I want to move?µ
Multi-attribute mapping: focuses on multiple things. How do you score compared to your competitors in different aspects such as performance, price, comfort, style etc.
Positioning strategies
(1) Product attributes or benefits → Physical characteristics about your product like colour, fragrance, | shininess, creaminess etc? Or will your USP focus more on the benefits of your product like satisfying hunger, helpful for the skin, thirst-quenching etc?
(2) Price/quality → price (are you making it unique by selling it for a super high price like a luxuryproduct?) quality (are you going to market how amazing the quality is?) or is your USP that it’s cheap for ‘ok’ quality?µ
(3) Use or application → How accessible is it? New use? Or Eg is it a creme, oil or something else? Can I buy the product at any store or do I need to get a prescription or go to a specific store?
(4) Benefits or needs → Will you position yourself as a brand that is always ready to help? µ
(5) Product-user Thinking of a specific class of users. Eg L’Oreal might focus on targeting fashion-conscious women→
(6) Competitor → explicit or implicit frame of reference of 1 or more competitors. Eg Will you convince people that your product is better than your competitors? Or compare them? Or link the competitor and say you’re on the same level?
(7) Product-Class → What class of product is it? What is the category? Eg Nescafe = instant coffee These factors will determine your USP (unique selling point)
Repositioning
(1) Introduce a new brand or product
(2) Change existing brand
(3) Change the beliefs about own-brand benefits
(4) Change the beliefs about the benefits of competing brands
(5) Change the importance of attributes
(6) Add new attributes to the mind of consumers
Brand Image ?
Brand Associations ?
Brand Awareness ?
Image -> What lies in the mind of consumers about the brand
Associations -> What comes to mind when a brand trademark is recognized or recalled
Awareness -> The ability of consumers to recognise a brand trade mark.
Global Consumer Culture Positioning (GCCP)
A brand is a symbol of particular global consumer culture or segment. EX Heineken is a global brand, and culture position. Although they are Dutch, they don’t focus on their Dutchness but on the global.
Foreign Consumer Culture Positioning (FCCP)
Although you are a global brand, you try to associate yourself with a specific country. Eg Gucci is Italian, or labels showing “Made in Germany” or “Made in the USA” Some brands like Haagen-Dazs use this even though they aren’t from an exotic country. Haagen-Dazs sounds Scandinavian but is actually American, they just want you to like the taste better or make it feel like it’s an exotic flavour that needs to be cherished.
Local Consumer
Local market, local culture. Eg Calve Pindakaas, Stoopwafel. Dutch brand and Dutch marketing atmosphere.
Culture Positioning (LCCP)
Probably won’t sell outside The Netherlands, just focused on NL values.
Market Research
Any set of techniques used to gather information and better understand a company’s target market. Reasons to conduct it:
→ Produce better products/services
→ Get to know customers better
→ Communicate better
→ Help to set the right price
→ Design effective distribution channels
→ Reduce risks
8 steps of market research process
(1) Recognize the problem/challenge opportunity → Something isn’t working or something looks interesting (2) Define marketing problem → Identifying and defining the research problem. The research problem determines the scope of the research, the tools and methods to be used and the sources of data. You want to close the information gap by identifying the problem. (3) Develop the research strategy → The approach to be taken on a particular project including market research steps, methods, tools, objectives, budget and time allocation(4) Design research materials + Collect data → most effective market methods include surveys, interviews, focus groups, direct observation and ethnography. There are also social listening, sentiment analysis and ethnography which are less popular. Then collect data. In order to have high-quality data you need accuracy, consistency, relevance, completeness and timeliness. (5) Analyse the data → Raw data must be analysed to yield information which then provides useful insights. You need to ensure to use the correct data analysis tools.(6) Report the data → Data must now be compiled and presented or reported to relevant people (eg marketers, managers, salespeople and customer service personnel)(7) Evaluate the process→ And make changes to the research if needed or corrections/advice (8) Implement data-driven strategies → Market research must now be put into practice and tested.
Marketing research ethics
You often tend to share information with businesses that you’re not even aware of through sources such as (phones, online behaviour, surveillance, AI, smart tech, buying behaviour, and neurological research) Info that can be tracked:(1) Location data → social media/fitness apps collect users location data to track where you go, how often and with whom(2) Browsing history → data collected on your interests, hobbies or online shopping habits. (3) Contact lists → collection of your friend’s names, phones, emails etc(4) Behavioural data←collection of how you interact with products, services or how long you spend on a website and what buttons you click(5) Purchase history → collection of what customers buy, payment info, shipping address etc. (6) Health data fitness trackers can collect users activity level, heart rates, sleep patterns etc.→EG your AH bonus card tracks your: name, address, mobile phone location, transaction behaviour etc → Therefore, a researcher should be honest, state the purpose of research, get consent for data collection, be transparent about it, keep research confidential and be careful about analysis and data storage
General Data Protection Regulation (GDPR)
GDPR is the EU regulation for data protection and marketing research ethics. There is a need for pseudonymisation, the right of access, and the right to erasure. You can be fined up to 10 mil or up to 2% of the annual worldwide turnover. This gives it a worldwide influence.
Marketing research techniques
Primary → The research you conduct yourself. It involves going directly to a source - usually customers and prospective customers in your target market to ask questions and gather information (eg interviews, surveys, questionnaires, focus groups, web scraping, mystery shopping, customer satisfaction etc)Secondary←Research that has already been compiled, gathered, organised and published by others.(a) Internal sources: Customer records, sales data, customer feedback, financial data, R&D figures etc (b) External sources: Press, internet/social media, reports, governmental publications etc
Qual vs Quant
Qualitative → more in-depth understanding of problems, not quantifying. Often a basis to develop quantitative research. We want to find out the why or how of a problem. Eg through in-depth interviews
-Focus groups are great as qualitative research especially in marketing especially when you want an in depth group opinion on your ideas. However, it’s difficult to find participants and it is very time consuming. + you only get a small sample of people so it might not give you a perfect result.
- We also tend to fall in the social desirability bias = over-claiming positive behaviours (saying you have a public library card even if you don’t because it makes you look better) OR under-claiming negative behaviours (people denied being arrested for drunk driving even though they have)
Quantitative → larger sample, trying to quantify effects, structured questioning (questionnaire research) or observations. We want to find out how much or how many e.g. through questionnaires, observations etc.
A/B testing
compares 2 versions of aproduct/website/app/marketing/message to see which oneperforms better.
→ On the right you have an example of this where a website tests whether a blue button or a green button gets more clicks.
→ Companies such as Facebook, Amazon, Google and Netflix run 10k experiments like these every year (an example of this which I have noticed is Youtubers chaining their thumbnails every 2-3h to see which one gets more clicks)
Cross-cultural research
Focuses on understanding the differences between countries in regard to marketing.
We often use a country’s values/culture to predict or explain certain behaviour as well as GDP
→ Value concepts have different meanings in different cultures:
(a) Happiness→USA: life goal, Japan: a temporary relaxation
(b) Freedom → USA: free enterprise NL: be yourself, express your feelings
(c) Friendship → Japan: friends are your inner circle, USA: acquaintances are friends
