chapter 2 Flashcards
individual differences
A person’s stable and consistent way of responding to the environment in a specific domain.
“Big Five” traits
openness, conscientiousness, extraversion, agreeableness, and neuroticism
life experiences
Events and experiences unique to the person’s life that have a lasting impact on the value and preferences they place on products and services, which then affect preferences, independent of individual differences
functional needs
Personal decision weightings across functional attributes based on their personal circumstances
self identity / image
Customers actively seek products that they believe will support or promote their desired self-image
marketing activities
Firms’ attempts to build linkages between their brands and prototypical identities or meaning
functional needs
The relative importance of functional attributes (e.g., design and features) to an individual based on their personal circumstances
self identity
The defining characteristic of a person in their social context
marketing activities
Strategic initiatives aimed at generating value to a customer through a firm’s product or service offerings
latent customer heterogeneity
Potential differences in desires that are unobserved and have not manifested in different customer purchases or behaviors.
-may stem from legal (government regulations, patents),
economic (prohibitive prices, due to the size of market or production costs), technological (only way known to make something), or innovative (no firm has yet identified and satisfied the need) constraints.
mass marketing (undifferentiated marketing)
A marketing strategy that utilizes mass media
to appeal to an entire market with a single message; where a firm mostly ignores customer heterogeneity based
on the assumption that reaching the largest audience possible will lead to the largest sales revenue.
niche marketing
A marketing strategy that focuses marketing efforts on well-defined, narrow segments of consumers in hopes of gaining a competitive advantage through specialization.
segmenting
The process of dividing the overall market
into groups where the potential customers in each group have similar needs and desires for
a particular category of product or service while also maximizing the differences among groups.
key points to segmentation:
- Segmentation must start with a random sample of potential customers in the market, not just the firm’s existing customers
- Customers should be divided into groups on the basis of their needs and desires in the product category
- It is important that customers in one group have similar preferences; it is ideal to maximize the differences between segments.
cluster analysis
A technique that uses customer preferences to cluster individual customers into a given number of groups.