consumer decision making

Question 1

STP

Answer 1

segmentation
targeting
product positioning

Question 2

benefits of STP process

Answer 2

enhances a company’s competitive position, providing direction and focus for marketing strategies, including targeted advertising and brand differentiation

examines and identifies market growth opportunities through the identification of new customers, growth segments or proposition uses

effective and efficient matching of company resources to targeted market segments, promising a greater return on marketing investment

Question 3

purpose of market segmentation

Answer 3

to leverage scarce resources

to ensure that elements of the marketing mix are designed to meet the particular needs of different customer groups

allows organisations to focus on specific customers needs in the most efficient and effective way

Question 4

aims of market segmentation

Answer 4

identifiable differences exist between segments

similarities exist between members within each segment

Question 5

market segmentation: basic principle

Answer 5

variation within groups should be less than variation across groups on the relevant customer characteristics

Question 6

what are the main approaches of market segmentation

Answer 6

breakdown method
build up method

Question 7

what is the breakdown method?

Answer 7

Adopts the view that the market is considered to consist of customers who are essentially the same, so the task is to identify groups that share particular differences.

Question 8

build up method

Answer 8

Considers a market to consist of customers who are all different, so here the task is to find similarities.

Question 9

types of consumer criteria

Answer 9

behavioural
psychological
profile

Question 10

what falls into behavioural criteria?

Answer 10

purchase/ transaction
consumption/ usage
media usage
technology usage

Question 11

psychological criteria

Answer 11

lifestyle
personality
perceptions
attitudes
motives
benefits sought

Question 12

profile criteria

Answer 12

demographic
socioeconomic
geographic

Question 13

evaluation of market segments =

Answer 13

DAMP=
distinct
accessible
measurable
profitable

Question 14

in deciding which segments to target, the firm should ask two questions:

Answer 14

how attractive is this segment?

does the firm have the capabilities to win in this segment?

Question 15

segment attractiveness factors

Answer 15

market growth
segment profitability
segment size
competitive intensity within the segment
cyclical nature of the industry

Question 16

segmentation

Answer 16

identify bases to segment the market

develop profiles of the segments

Question 17

targeting

Answer 17

evaluate segment attractiveness

select target segments

Question 18

positioning

Answer 18

develop positioning for each target segment

develop marketing offering

Question 19

what are the two fundamental elements of positioning

Answer 19

physical attributes : the functionality and capability that a brand offers

communication: the way in which a brand is communicated and how consumers perceive the brand relative to other competing brands in the marketplace

Question 20

repositioning strategies

Answer 20

1. Change the tangible attributes and then communicate the new proposition to the same market.
2. Change the way a product is communicated to the original market.
3. Change the target market and deliver the same product.
4. Change both the product (attributes) and the target market.

Question 21

what best describes the strategic advantage of market segmentation?

Answer 21

it enables organizations to allocate limited resources efficiently by tailoring the marketing mix to specific customer needs

Question 23

what best explains the strategic advantage of market segmentation?

Answer 23

it enables organisation to allocate limited resources efficiently by tailoring the marketing mix to specific customer needs

Question 24

what best describes the fundamental goal of market segmentation?

Answer 24

the main goal is to identify segments with clear differences between them while maintaining similarities within each segment

Question 25

how does the build up method of market segmentation differ from the breakdown method?

Answer 25

the build up method assumes all customers are different and looks for similarities, while the breakdown method assumes customers are the same and identifies differences

Question 26

what best describes behavioural criteria in market segmentation?

Answer 26

it examines when, where and how consumers behave in the market, including shopping habits and media consumption

Question 27

what do marketers ask when assessing psychological criteria in market segmentation?

Answer 27

why do consumers have certain attitudes toward a product or brand?

Question 28

how do profile criteria help in market segmentation?

Answer 28

they provide insights into who the consumers are, including demographics and geographic location

Question 29

why is it important for market segments to be accessible?

Answer 29

it ensures that marketing efforts and distribution channels can effectively reach the target audience

Question 30

what is not a criteria for segmenting business markets?

Answer 30

psychological criteria

Question 31

what is the main goal of targeting in market segmentation?

Answer 31

to evaluate segment attractiveness and select the most suitable target segments for the company

Question 32

intermediaries increase exchange complexity- true or false?

Answer 32

false

Question 33

what best describes the key difference between the undifferentiated strategy and the differentiated strategy in market segmentation?

Answer 33

the undifferentiated strategy treats the market as one large segment with one marketing mix, whereas the differentiated strategy creates separate marketing mixes for each identified segment

Question 34

in the context of the concentrated approach - what does strategy focus on?

Answer 34

strategy focuses on one or more segments of the market, offering separate marketing mixes for each

Question 35

what best describes the balanced approach in market segmentation?

Answer 35

balanced approach combines elements of both effectiveness and efficiency by identifying segments with similar needs and serving them with a reasonable level of customization

Question 36

what is the primary objective of positioning in market segmentation?

Answer 36

to create a unique perception of the product for each target segment and develop tailored marketing offering

Question 37

list of repositioning strategies -

Answer 37

- change the way a product is communicated to the original market - change the target market and deliver the same product - change the tangible attributes and then communicate the new proposition to the same market

Question 38

what are the three facets of an attitude?

Answer 38

affect behaviour cognition

Question 39

which facet of attitude is related to one's feelings about an attitude object?

Answer 39

affect

Question 40

in the context of attitudes, what does behaviour refer to?

Answer 40

one's intentions or actions towards an attitude object

Question 41

what does cognition refer to in the context of an attitude?

Answer 41

what we think or believe about an attitude object

Question 42

what is the main idea behind cognitive consistency in consumer behaviour?

Answer 42

consumers aim to align their feelings, thoughts and behaviours to avoid internal conflict

Question 43

what can cognitive dissonance lead people to do?

Answer 43

change their behaviour, feelings or thoughts to achieve consistency

Question 44

in the context of maintaining balance, what does the triad consist of?

Answer 44

a person, their perceptions of an attitude object, and some other person or object

Question 45

what does the foot-in-the-door principle suggest about consumer behaviour?

Answer 45

consumers are more likely to comply with a larger request if they have previously agreed to a smaller one

Question 46

what does prospect theory suggest about people's perception of losses compared to gains?

Answer 46

losses are perceived as more significant than equivalent gains

Question 47

what external factors might prevent a person from behaving according to their attitude?

Answer 47

social pressure, affordability and availability