Exam 3 Flashcards
segmenting by category or price
segment along lines defined by the characteristics of their products
segmenting by age, gender, marital status and income level
segment along lines defined by the customers
Segmentation by social class
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
Demographic vs Psychographic example
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.
Value segmentation
the grouping of consumers by common value
Value segmentation
the grouping of consumers by common value
Means-end chain analysis (what is it?)
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
Rokeach value survey (what is it?)
a survey that measures instrumental and terminal values
– type of value questionnaire
Value Questionnaires
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
Personality
an internal characteristic that determines how individuals behave in various situations
Personality
an internal characteristic that determines how individuals behave in various situations
VALS
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
Sources and Functions of Consumption Symbols
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
Emblematic function
Use of products to symbolize membership in social groups
- Geographic, ethnic, social class, gender, reference group
Role acquisition function
The use of products as symbols to help us feel more comfortable with a new role
Role acquisition phases
Three phases:
- Separation
- Transition
- Incorporation
Connectedness function
Use of products as symbols of our personal connections to people, events, or experiences
Expressiveness function
Using products as symbols to demonstrate our uniqueness
Symbolism
Communicates “who” or “what” we are, what we stand for, etc.
Innovation (def)
An offering that is perceived as new by consumers within a market segment and that has an effect on existing consumption patterns
Functional Innovations:
New changes that primarily effect the usefulness of an offering
Aesthetic/Hedonic Innovations:
New changes that are primarily effect the fun factor of an offering
Symbolic Innovations:
New changes that are primarily effect the expressiveness/connectedness features of an offering
Symbolic Innovations:
New changes that are primarily effect the expressiveness/connectedness features of an offering
The high effort hierarchy of effects
awareness - information collection/search - attitude formation - trial - adoption
The low effort hierarchy of effects
awareness - trial - attitude formation - adoption
The low effort hierarchy of effects
awareness - trial - attitude formation - adoption
Perceived Risks
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?
Combatting risk
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
Adopter groups
- Innovators
- Early adopters
- Early majority
- Late majority
- Laggards
Diffusion (def)
The percentage of the population that has adopted an innovation at a specific point in time
Two ‘shapes’ for diffusion
- S-shaped curve
- Exponential
2 Key Questions for a new product
- What is it?
2. What are the benefits?
Why segment consumers?
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
Most companies segment along lines defined by…
the characteristics of their products (category or price) or customers (age, gender, marital status and income level)
segmentation by jobs
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?
Means-end chain analysis (how does it work?)
- Begin with a question to find an important attribute of a product
- Ask why it’s important
- 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
Rokeach value survey (how does it work?)
- Rank each value in its order of importance to you (do each page as a separate list).
- The most important value should be ranked as 1 and the least important as 18
- The results should represent an accurate picture of how you really feel about what’s important in your life
Rokeach value survey (marketing applications)
- Tying an option to a value makes that choice more attractive to people who share that value
- Advertisements often reflect social values
VALS (outcomes)
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
