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Principles of Marketing > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

What is a market?

A

People or organizations with needs/wants and the ability and willingness to buy

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2
Q

What is a market segment?

A

A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

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3
Q

What is market segmentation?

A

The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

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4
Q

3 reasons a marketer would use market segmentation

A
  • Helps marketers define customer needs and wants
  • Leads to understanding of customer lifestyles, values, jobs, needs, and buying occasions
  • Helps decision makers more accurately define marketing objectives and better allocate resources
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5
Q

What are the 4 basic criteria in order for a market segment to be legitimate?

A

Sustainability
Measurability/Identifiability
Accessibility
Responsiveness

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6
Q

What is sustainability within market segments?

A

A segment must be large enough to warrant developing and maintaining a special marketing mix

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7
Q

What is measurability and identifiability within marketing segments?

A

Information about a population within geographic boundaries, various age categories, and other social and demographic characteristics are often easy to get

Provide fairly concrete measures of segment size

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8
Q

What is accessibility within marketing segments?

A

The firm must be able to reach members of targeted segments with customized marketing mixes

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9
Q

What is responsiveness within marketing segments?

A

Segments need not be treated separately unless one market segment responds differently to a marketing mix than other segments

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10
Q

What are the 5 broad segmentation bases used by marketers?

A

Geographic
Demographic
Psychographic
Benefit
Usage-Rate

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11
Q

What are segmentation bases?

A

Characteristics of individuals, groups, or organizations that divide a market into segments

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12
Q

What is geographic segmentation?

A

Segmenting markets by a region of a country or the world, market size, market density, or climate

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13
Q

What is market density?

A

The number of people within a unit of land

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14
Q

What is demographic segmentation?

A

Segmenting markets by age, gender, income, ethnic background, and family life cycle

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15
Q

What are some typical characteristics of Gen Z?

A

1995-2015
Work for success
Etiquette for social media
Cautious
Starting to enter workforce

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16
Q

What are some typical characteristics of Millennials?

A

1980-1994
Idealistic/Pragmatic
Technology-proficient
Seeking experiences
Love private brands

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17
Q

What are some typical characteristics of the Baby Boomer generation?

A

1946-1964
Outspend average consumer in nearly every category
Spend time and money doing whatever is necessary to maintain vitality

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18
Q

What are some typical characteristics of Gen X?

A

1965-1979
“Sandwich generation”
Latchkey kids
Best educated
Disloyal to brands
Skeptical of big business

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19
Q

What are some typical characteristics of the Silent Generation?

A

Born before 1946
Ability to quietly persevere through hardships
Were taught to play by the rules

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20
Q

What’s important about gender segmentaion?

A

Women drive 70-80% of purchases of consumer goods/year
Companies that have traditionally targeted women are targeting men and vice versa

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21
Q

What’s important about income segmentation?

A

Income influences consumers’ wants and determines their buying power

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22
Q

What is disposable income?

A
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23
Q

What is discretionary income?

A
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24
Q

What is important about ethnic segmentation?

A

Need to focus on expanding ethnicities
3 largest minorities in US: Hispanic, African, Asian

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25
Q

What’s important about Family Life Cycle Segmentation?

A

Consumption patterns among people of same age/gender may differ because they’re in different stages of the family life cycle

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26
Q

What is the Family Life Cycle?

A

A series of stages determined by a combination of age, marital status, and the presence or absence of children

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27
Q

What is psychographic segmentation?

A

Segmenting markets on the basis of personality, motives, lifestyles, and geodemographics

28
Q

What is personality and what is the ultimate descriptor?

A

Reflection of a person’s traits, attitudes, and habits

Clothing

29
Q

What are some important motives in marketing?

A

Caring for loved ones
Status

30
Q

What makes up lifestyle?

A

The way people spend their time
The importance of things around people
People’s beliefs
Socioeconomic characteristics (income, education) of people

31
Q

What are geodemographcis?

A

Categories based on a combination of neighborhood, lifestyle, and other demographic variables

32
Q

What is benefit segmentation?

A

The process of grouping customers into market segments according to the benefits they seek from a product

Groups potential customers on the basis of their needs/wants rather than on another characteristic, such as age or gender

33
Q

What is usage-rate segmentation?

A

Dividing a market by the amount of a product bought or consumed

First-time, light, medium, heavy users

34
Q

4 broad segments of the business market

A

Producers
Resellers
Government
Institutions

35
Q

What are 6 characteristics of a company?

A

Geographic location
Type of company
Company size
Product use
Customer type
Volume of purchase

36
Q

What are buying processes in market segmentation?

A

Segmenting customers on how they buy

price, quality, technical support, and service

37
Q

What are 2 purchasing profiles for businesses?

A

Satisficers
Optimizers

38
Q

What is a satisficer?

A

A business that contacts familiar suppliers and place the order with the first one to satisfy product and delivery requirements

39
Q

What is an optimizer?

A

A business that considers numerous suppliers (familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one

40
Q

What are the 6 steps in segmenting a market?

A
  • Select a market or product category for study
  • Choose a basis or bases for segmenting the market
  • Select segmentation descriptors
  • Profile and analyze segments
  • Select Markets
  • Design, implement, and maintain appropriate marketing mixes
41
Q

What goes in to step 1 of segmenting a market?

A

Define overall market

42
Q

What goes in to step 2 of segmenting a market?

A

Managerial insight, creativity, and market knowledge

Product segments must meet 4 basic criteria of markets

43
Q

What goes in to step 3 of segmenting a market?

A

Identify descriptors (specific segmentation variables)

44
Q

What goes in to step 4 of segmenting a market?

A

Profile the market by including segment’s size, expected growth, purchase frequency, current brand usage, brand loyalty, and long-term sales and profit potential

45
Q

What goes in to step 5 of segmenting a market?

A

This is a natural outcome of segmentation process

46
Q

What goes in to step 6 of segmenting a market?

A

Marketing mix (4 Ps)

47
Q

What are 3 strategies for selecting target markets?

A

Undifferentiated
Concentrated
Multisegment

48
Q

What is an undifferentiated targeting strategy?

A

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

49
Q

What is a concentrated marketing strategy?

A

A strategy used to select one segment of a market for targeting efforts

Used for niche markets

50
Q

What is a multisegment targeting strategy?

A

A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

51
Q

What is cannibalization in marketing?

A

Occurs when sales of a new product cut into sales of a firm’s existing products

52
Q

What is Customer Relationship Management?

A

Tracking interactions with customers to optimize customer satisfaction and long-term company profits

53
Q

What are 4 trends that will lead to continued growth of CRM?

A

Personalization
Time savings
Loyalty
Technology

54
Q

What is positioning?

A

Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general

55
Q

What does the process of positioning require?

A
  • Assessing the positions occupied by competing products
  • Determining the important dimensions underlying these positions
  • Choosing a position in the market where the organization’s marketing efforts will have the greatest impact
56
Q

What is a position?

A

The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings

57
Q

What is product differentiation?

A

A positioning strategy that some firms use to distinguish their products from those of competitors

58
Q

What is perceptual mapping?

A

A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds

59
Q

What are 6 common positioning bases?

A

Attribute
Price and Quality
Use or Application
Product User
Product Class
Competitor
Emotion

60
Q

How does a marketer use attribution to position products?

A

Product is associated with an attribute, product feature, or customer benefit

61
Q

How does a marketer use price and quality to position products?

A

May stress high price as a signal of quality of emphasize a low price as an indication of value

62
Q

How does a marketer use application or use to position products?

A

Ex. Kahlua liqueur was advertised as having 228 different ways to use the product

63
Q

How does a marketer use product user to position products?

A

Focuses on the personality of a type of user
ex. Gap (basic) vs. Old Navy (trendy) vs. Banana Republic (luxury)

64
Q

How does a marketer use product class to position products?

A

Position the product as being associated with a particular category of products

ex. Margarine and butter

65
Q

How does a marketer use competition to position products?

A

Part of any positioning strategy

66
Q

How does a marketer use emotion to position products?

A

Focuses on how the product makes customers feel

67
Q

What is repositioning?

A

Changing consumers’ perceptions of a brand in relation to competing brands

Principles of Marketing (6 decks)

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