Chapter 3 Flashcards
1
Q
mass marketing
A
ignore customer needs and treat everyone the same
- only one offer available
2
Q
listing fees
A
pay to put products on shelves, very expensive for small players
3
Q
Glide
A
- shred proof dental floss
- struggled to find channel
- chose dentists and had success, eventually being bought by P&G
4
Q
Dangers of Not Segmenting
A
- Ignore Needs and Treat the Same
- Waste Resources (health clinic pamphlets)
- Try to be All things to All people
- No Direction for Sales Force
5
Q
Ritz-Carlton
A
caters to upmarket travellers
- demand the best and are willing to pay for it
- trains staff to accommodate any need of customer (personalize experience; allergies, tennis)
- create value for the customer
6
Q
Principles of Marketing Segmentation
A
- A Business exists to be profitablele
- All Customers are not created equal (needs, cost to serve, appreciation and willingness to pay)
- We cannot be all things to all customers
7
Q
How to segment: The Wrong Way
A
- by geography and demographic (age, income, gender)
- psychographic segmentation
- do not tell what markets to enter or what products to introduce or price
8
Q
How to Segment: The Right Way
A
- customer needs
- cost to serve
- customer willingness to pay
- customer strategic fit
- potential for revenue growth
- profit potential
The ideal segmentation method takes into account customer needs and the attractiveness of the customer to the business.
9
Q
How to Segment: On the Internet
A
- demographics and psychographics are bad
- usage segmentation groups customers by individual behaviour at a point in time
“occasionalization” = what people do online during diff. occasions - recognizes that customers have different moods
10
Q
psychographic segmentation
A
- VALS program (Values and Lifestyles), classify individuals based on personality, interests, attitudes and lifestyle.
- not driver of buying behaviour (builds emotional connection only)
11
Q
Premium Customers
A
- price-insensitive
- want highest quality
- will pay price premiums
- value relationship, will not switch
12
Q
Performance Customers
A
- price sensitive
- want adequate performance
- will pay price-premium if case can be made
- generally loyal, can switch
13
Q
Value Customers
A
- price sensitive
- want basic product
- will not pay premium
- will do business with cheapest offer
14
Q
Over-Segmenting
A
too many segments, hard to satisfy
- burdens company resources
15
Q
Segmenting by product, not Market
A
- does not allow cross-selling, doesn’t take into account customer needs
