Class 2 Flashcards
1
Q
Implications of limited attention resources
A
- They become overloaded with too many options to choose from and end up not choosing (choice overload)
- People feel overloaded when having more than 12 options
- They select information in the environment that is more relevant for a current goal
- They make choices based on the information that is more accessible at the moment
2
Q
Importance of segmentation
A
- Segmentation is essential because the market is not homogeneous, so the companies have to divide it in segments that are relatively homogenous
- Competing companies may be better suited for certain segments
- Difficult or too costly to satisfy all customers because the company has limited resources
- Every company should focus on customers with the highest return on marketing investment.
3
Q
Bases company can use to segment the market
A
- There are three levels of classification: personal characteristics, benefits sought, and behavioral
measures - Personal Characteristics refer to demographic, geographic and lifestyle aspects
- Benefits sought are the aspects of a product that customers are looking for, e.g. quality and price levels
- Behavior refers to the customer’s behavior in the marketplace like his purchasing pattern, brand
loyalty or actual profitability
4
Q
S-t-p Dilemma
A
- Homogenous market (lower costs) vs. Heterogeneous market (higher revenue)
- Consumers are willing to pay more for things that exactly meet their needs
- Assumption: It is possible to identify and isolate groups within the total market who demand different kinds of product characteristics
- Assumption Marketer is willing to select “target segments” whose needs can best fulfill and concentrate efforts on reaching and persuading primary this portion of the total market
- Assumption If more than one target segment is desirable, the marketer is willing to design different marketing strategies and tactics for each segment
5
Q
Targeting
A
- Targeting = addressing the right people who want to
buy the product - The company needs to be customer focused (what benefits are important for what segments), company focused (how good is the company at providing those benefits) and competitive focused (how good is the competition at providing those benefits)
6
Q
Positioning
A
- Positioning is about occupying a position in consumers’ minds
- A good Positioning Statement contains all the relevant info about a brand: 1. Target 2. Frame of reference 3. Point of difference 4. Reason to believe
7
Q
Importance of Segmentation
Three criteria for segmentation
A
- Three criteria for segmentation: Segments
should be distinctive (respond differently to the marketing mix), operational (can be identified and reached) and substantial (enough to support profitable
programs)
8
Q
Targeting
Different market strategies
Mere-exposure effect
A
- If the company wants to target an undifferentiated segment they can use a mass marketing strategy like Coca-Cola does
- Facing a concentrated segment they can use a single target market approach or a narrower version called “niche strategy”
- Multiple target market approach (most used strategy) if they deal with differentiated segments
- Definition and consequences of the mere-exposure effect: people like things they get exposed to very often. It is important to have a clear positioning and get consumers exposed to it very often
9
Q
Tools for positioning
A
- Tools for positioning: perceptual maps (quantitative technique) and ZMET (qualitative technique)
- Perceptual maps technique involves selecting two important attributes and plotting the competitors in a graph with those attributes
- For perceptual maps: marketers should use factor analysis to reduce the number of attributes to plot and regression analysis to examine what factors are most
important - ZMET involves asking customers to collect images of the brand such that at the end the manager has an illustration of how the consumer views the
brand
