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Marketing > 3. Understanding Markets & Customers > Flashcards

3. Understanding Markets & Customers Flashcards

1
Q

What is mass marketing and what does it entail?

What is it also known as?

A

When a company seeks to appeal to the entire market through mass distribution and media

Aka undifferentiated marketing

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2
Q

What is segment marketing?

A

Where a company targets different subsections and uses different market strategies for different segments depending on their characteristics

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3
Q

What are the two approaches to marketing a product?

A

Mass Marketing

Segment Marketing

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4
Q

What is “targeted communication”?

A

This is where companies use different advertising styles depending on the target audience

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5
Q

What is “mass communication”?

A

Where companies use mass media to relay information to large segments of the market at the same time

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6
Q

Give 3 benefits of market segmentation?

A

Closer matching of customer needs generates more revenue

Customers often stick to familiar brands so are likely to work their way through a product line (depends on income)

It can be profitable to segment even if it is not essential

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7
Q

Give 3 concerns about segmentation?

A

It is expensive to make different product versions / very specific products

The target audience becomes small relative to that reached by mass marketing

Different versions of a product may eat into sales of the original design - returns to scale lost

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8
Q

Give an example of a segmented market?

A

The car industry. Cheap, basic cars aimed at low-income HHs, sophisticated expesive car aimed at high income HHs

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9
Q

What are the 3 methods of segmentation?

A

Geographic segmentation
Demographic segmentation
Psychographic segmentation

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10
Q

Explain “geographic segmentation”?

Give one problem

A

Most common method of segmentation

Different locations will have different dominant features

(Problem: there will still be a huge range of human characteristics in any given area)

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11
Q

Explain “demographic segmentation”?

Give one problem

A

Uses demographics such as income, gender and age

Easy to define and measure

(Problem: demographics are descriptive - don’t identify individual preferences)

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12
Q

Explain “psychographic segmentation”?

Give one problem

A

Based on activities, interests, opinions and demographics

Uses more detail about customer preferences

(Problem: Expensive / difficult to collect)

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13
Q

What are the 2 stages of segmenting organisational markets?

A

Macro-segmentation: Identify subgroups within whole market that share common characteristics

Micro-segmentation: Refinement stage where consumers individual characteristics/preferences are determined (more expensive stage)

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14
Q

What are the 4 criteria for successful segmentation?

A

Distinctiveness - boundaries between segments should not be blurred

Tangibility - The segment must be big enough to make it worthwhile

Accessibility - Distribution/communications must be relatively easy

Defendability - Company/product must be different to gain competitor advantage

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15
Q

What is “targeting”?

A

The selection of groups that will provide the company with the most profit after segmentation

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16
Q

What are the 3 types of targeting?

A

Undifferentiated
Differentiated
Concentrated

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17
Q

Describe “undifferentiated targeting”?

A

There is one price and one product

The same promotional techniques are applied to the entire market

There is no segmentation - the market is viewed as one homogeneous unit

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18
Q

Describe “differentiated targeting”?

A

There is a specific mix of products and prices to focus on a few different segments of the market

E.g. Nike sports shoes - football boots, trainings, casual sneakers

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19
Q

Describe “concentrated marketing”?

A

There is focus on a single segment of the market

Can be very successful but can attract competitors as a result

E.g gluten-free products

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20
Q

What is “positioning”?

When is it decided upon?

A

How the company chooses a distinctive place in the market for itself and its products

Reflected in the brand image, packaging, quality and communications

Allows the organisation to establish its competitive advantage

Decided upon in the product development stages

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21
Q

What is a perceptual map?

A

A graphical representation of the products environment. It gives a complete picture of the position of a company and its competitors

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22
Q

What is STP?

A

Segmentation: Defining different sections of the market

Targeting: Selecting segments

Positioning: Formulation of all marketing mix elements to project the desired message to customers

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23
Q

What is the “Marketing Mix”?

A

A tactical detail of positioning strategy.

Set of tactics that the company uses to promote the product in the chosen market

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24
Q

What are the 5 major consumer theory disciplines?

A

Psychology
Sociology
Anthropology
Economics

25
Q

Name the three buying situations

A

Routine problem solving

Limited problem solving

Extended problem solving

26
Q

Describe “routine problem solving” (the 3 buying situations)?

A

Decisions are made automatically

Consumer opts for a shop/brand without further consideration

e.g. newspapers, coffee

27
Q

Describe “limited problem solving” (the 3 buying situations)”?

A

Occurs when the consumer is less familiar with the product => takes more time to research/decide which product to buy and where

e.g. mobile phones, paint

28
Q

Describe “extended problem solving” (the 3 buying situations)?

A

Occurs when the consumer is very unfamiliar with the product

Or the product is an expensive, one-off buy

A lot of time dedicated to research / decision

E.g. house, car, holidays

29
Q

How to the 3 buying situations differ?

A

They differ in the involvement (time and intensity) with which they are researched

30
Q

What is “high involvement”?

A

Occurs when the product can deeply affect the consumers’ welfare.

Product cannot be ignored once bought - mistake would be recognised on a day-to-day basis

31
Q

What is “low involvement”?

A

When the product decision is less important

Occurs when the consequences of making a mistake will not have any significant impact of the consumers happines

32
Q

Outline the 5 stage decision-making process?

A
  1. Need recognition
  2. Information search
  3. Information evaluation
  4. Purchase decision
  5. Post-purchase evaluation
33
Q

Explain the “Need recognition” stage of the D-M process?

A

Derived from 2 stimuli:

i) Internal (instinctual e.g. hunger)
ii) External (reaction to external environment that triggers the feeling of need e.g. smell)

34
Q

What are the 3 types of need in the context of the D-M process?

A

Functional need - product is the answer to a problem

Social need - desire for social recognition / belonging

Need for change - product is bought out of the consumers desire to change

35
Q

Describe the “Information search” stage of the D-M process?

How is it carried out?

A

Consumer seeks info about possibilities for fulfilling the need

Carried out in 4 sources:

i) Personal (family/friends)
ii) Commercial (sales people/experts)
iii) Public (advertising/internet)
iv) Experimental (touch, smell etc.)

36
Q

Describe the “Purchase decision” stage of the D-M process?

A

Split into 2 sub-stages:

i) Purchase intention (product selected but external factors may cause the consumer to change their mind)
ii) Purchase decision (consumer commits to purchase)

37
Q

Describe the “post-purchase evaluation” stage of the D-M process?

A

Occurs after purchase

Consumer compares product performance with their prior expectations of its perceived performance

Cognitive dissonance occurs if the product doesn’t match with expectations

38
Q

Define “cognitive dissonance”?

A

Mental discomfort caused by holding two or more conflicting beliefs

39
Q

What are the two important sources of socio-cultural influences on the consumer? What is a third influence?

A

Reference groups

Household influences

Culture

40
Q

What is a “reference group” (socio-cultural influences)?

A

A group that the consumer interacts with in order to form values/attitudes

41
Q

What are the 3 types of reference group (socio-cultural influences)?

A

Normative (aids in initial development of behaviour, family)

Comparative (People that the consumer wants to imitate)

Indirect (consumer does not know them personally but knows about them e.g. celebrities)

42
Q

Explain the concept of “conformity”?

A

Individuals often alter their behaviour in order to conform to a part of society that appeals to them

43
Q

Discuss “household influences” (socio-cultural influences)?

A

HH influence diminishes / changes with age

Changes due to events such as retirement, moving, co-habiting etc.

44
Q

Define and discuss “culture”?

A

Sum total of learned beliefs/values/customs that serve to direct consumer behaviour of members of a particular society

Difficult to change

Acts as a major barrier to growing market share

45
Q

Give 3 ways in which culture is learned?

A

Formal learning - taught by peers/family

Informal learning - picked up through cultural norms

Technical learning - Instruction by teachers

46
Q

What are the 5 primary psychological influences on the consumer ?

A 
Motivation
Personality
Perception
Expectations
Motives
47
Q

Describe “innate” and “acquired” needs?

A

Innate - needed to survive

Acquired - what society has taught us to need

48
Q

What is “Maslows Hierarchy of Needs” (3 points)?

A

A comprehensive framework for marketers in developing appropriate advertising. Key to unlocking human motivation.

Facilitates product positioning

Marketers often focus on one need level

49
Q

Outline the 5 levels of “Maslows hierarchy of needs” (top to bottom)

A

Self-Actualisation (feeling of fulfilling potential)
Esteem (Status/success e.g. good job)
Social (membership, affection)
Safety (Security)
Physiological (e.g. hunger)

50
Q

Describe “Motivation” as a psychological influence?

A

Motivation compels us to satisfy a need (refer to Maslows Hierarchy of Needs)

51
Q

Describe “Personality” as a psychological influence?

A

Reflects individual preferences

Personality is persistent and enduring but can change due to life events

52
Q

What are the two inputs that form “Perception”?

A

Physical stimuli - outside environment

Internal stimuli - expectations/motives based on previous experiences

53
Q

What is “Perceptual Selection”?

A

How we subconsciously select which stimuli we percieve

54
Q

What is “Selective Perception”?

A

How we block out things that we don’t need in order to concentrate on things that are relevant

55
Q

How can “Expectations” affect consumer behaviour?

A

Consumers will pay attention more if they see something that they don’t expect, however marketers should be careful not to distract them from the product

56
Q

What are the two types of “learning”?

A

Incidental - consumer comes across information

Intentional - consumer seeks to find it

57
Q

Explain the 4 elements of “learning”?

A

Motivation (depends on relevance of info)
Cues (stimuli supporting motives)
Response (reaction to cue)
Reinforcement (increases likelihood that response will happen again)

58
Q

Describe “attitudes” as a psychological influence?

A

Attitude is learned but becomes a tendency

Has some degree of consistency (e.g. always buying the same brand)

Marketing (13 decks)

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