Exam 3

Question 1

segmenting by category or price

Answer 1

segment along lines defined by the characteristics of their products

Question 2

segmenting by age, gender, marital status and income level

Answer 2

segment along lines defined by the customers

Question 3

Segmentation by social class

Answer 3

Upper Class
– Upper-upper: true aristocrats
– Lower-upper: new social elite (professionals)
– Upper-middle: college grad managers, professionals
Middle Class (most similar across cultures)
– Middle class: average pay white-collar
– Working class: average pay blue collar
Lower Americans
– “Not the lowest”: living standard just above poverty
– “Real lower-lower”: on welfare, poverty stricken

Question 4

Demographic vs Psychographic example

Answer 4

Demographic Segmentation:
45 yr old males making X $

Psychographic Segmentation:
“Meat ‘n Potatoes” types work as skilled laborers in industry, are in a union, buy American, like comfort foods, are interested in football but not soccer, are against NAFTA, thought people should get off Bill Clinton’s back, prefer predictability, and are resistant to change.

Question 5

Value segmentation

Answer 5

the grouping of consumers by common value

Question 6

Value segmentation

Answer 6

the grouping of consumers by common value

Question 7

Means-end chain analysis (what is it?)

Answer 7

a technique that can help to explain how values link to attributes in products and services

• Valuable information about your specific product
• How best to market or improve your product

Question 8

Rokeach value survey (what is it?)

Answer 8

a survey that measures instrumental and terminal values

– type of value questionnaire

Question 9

Value Questionnaires

Answer 9

how marketers directly assess values

• Values that are important to a group of people
• Which products and attributes to sell
• How to market to a segment

Question 10

Personality

Answer 10

an internal characteristic that determines how individuals behave in various situations

Question 11

Personality

Answer 11

an internal characteristic that determines how individuals behave in various situations

Question 12

VALS

Answer 12

one of the most widely known psychographic tools

- analyzes the behavior of U.S. consumers to create segments based on 2 factors: resources and primary motivation

Question 13

Sources and Functions of Consumption Symbols

Answer 13

Emblematic function - Product use defines consumer as: group member; Product meaning derives from: culture
Role acquisition function - Product use defines consumer as: individual; Product meaning derives from: culture
Connectedness function - Product use defines consumer as: group member; Product meaning derives from: individual
Expressiveness function - Product use defines consumer as: individual; Product meaning derives from: individual

Question 14

Emblematic function

Answer 14

Use of products to symbolize membership in social groups

- Geographic, ethnic, social class, gender, reference group

Question 15

Role acquisition function

Answer 15

The use of products as symbols to help us feel more comfortable with a new role

Question 16

Role acquisition phases

Answer 16

Three phases:

• Separation
• Transition
• Incorporation

Question 17

Connectedness function

Answer 17

Use of products as symbols of our personal connections to people, events, or experiences

Question 18

Expressiveness function

Answer 18

Using products as symbols to demonstrate our uniqueness

Question 19

Symbolism

Answer 19

Communicates “who” or “what” we are, what we stand for, etc.

Question 20

Innovation (def)

Answer 20

An offering that is perceived as new by consumers within a market segment and that has an effect on existing consumption patterns

Question 21

Functional Innovations:

Answer 21

New changes that primarily effect the usefulness of an offering

Question 22

Aesthetic/Hedonic Innovations:

Answer 22

New changes that are primarily effect the fun factor of an offering

Question 23

Symbolic Innovations:

Answer 23

New changes that are primarily effect the expressiveness/connectedness features of an offering

Question 24

Symbolic Innovations:

Answer 24

New changes that are primarily effect the expressiveness/connectedness features of an offering

Question 25

The high effort hierarchy of effects

Answer 25

awareness - information collection/search - attitude formation - trial - adoption

Question 26

The low effort hierarchy of effects

Answer 26

awareness - trial - attitude formation - adoption

Question 27

The low effort hierarchy of effects

Answer 27

awareness - trial - attitude formation - adoption

Question 28

Perceived Risks

Answer 28

Performance risk: will the product perform?
Financial risk: is it affordable for me?
Physical risk: is it safe?
Social risk: will it hurt my social standing?
Psychological risk: does it fit with my self-image?
Time risk: do I have the time to invest in it?

Question 29

Combatting risk

Answer 29

Performance risk: will the product perform?
- Money back guarantee
Financial risk: is it affordable for me?
- Offer financing options
Physical risk: is it safe?
- Independent endorsement
Social risk: will it hurt my social standing?
- Speak to issue directly: “Real men wear pink”
Psychological risk: does it fit with my self-image?
- Understand your consumer’s identity (more in “symbolic consumption lecture”)
Time risk: do I have the time to invest in it?
- Emphasize how easy your product is to use/sign up for

Question 30

Adopter groups

Answer 30

• Innovators
• Early adopters
• Early majority
• Late majority
• Laggards

Question 31

Diffusion (def)

Answer 31

The percentage of the population that has adopted an innovation at a specific point in time

Question 32

Two ‘shapes’ for diffusion

Answer 32

• S-shaped curve

- Exponential

Question 33

2 Key Questions for a new product

Answer 33

1. What is it?

2. What are the benefits?

Question 34

Why segment consumers?

Answer 34

Most companies are not going to appeal to or try to target their product/services to everyone

• Pricing & appeal implications – consumers are willing to pay more & have higher appeal levels for products that specifically meet their needs
• Helps FOCUS companies’ limited resources on targeting the segments with the greatest potential for growth

Question 35

Most companies segment along lines defined by…

Answer 35

the characteristics of their products (category or price) or customers (age, gender, marital status and income level)

Question 36

segmentation by jobs

Answer 36

what job is the product being “hired” for by the customer? How can we improve the product to satisfy that job? How can we market to the people who are wanting the product to complete this job?

Question 37

Means-end chain analysis (how does it work?)

Answer 37

1. Begin with a question to find an important attribute of a product
2. Ask why it’s important
3. Keep asking ‘why’ questions until you find a desired end state (terminal value) driving the importance rating
   * Product > Attribute > Benefit > Instrumental value (driving force) > Terminal value

Question 38

Rokeach value survey (how does it work?)

Answer 38

1. Rank each value in its order of importance to you (do each page as a separate list).
2. The most important value should be ranked as 1 and the least important as 18
3. The results should represent an accurate picture of how you really feel about what’s important in your life

Question 39

Rokeach value survey (marketing applications)

Answer 39

• Tying an option to a value makes that choice more attractive to people who share that value
• Advertisements often reflect social values

Question 40

VALS (outcomes)

Answer 40

Survivors/Strugglers – just meet immediate needs
Believers – strong principles, brand loyal
Fulfilleds – satisfied, comfortable, practical
Strivers – like Achievers but still on way up
Achievers – career-oriented, risk averse
Makers – action-oriented, self-sufficient
Experiencers – impulsive, risk loving
Innovators/Actualizers – trying to self-actualize