Part 4 (New Material) Chapters 8-12 Flashcards
What is ‘VALS’ and why is it useful for marketers?
• “Value and Lifestyle Survey”; the most widely used psychographic tool that classifies customers into eight segments based on answers to a questionnaire; 41 questions, four choices per question - mostly disagree, somewhat disagree, somewhat agree, mostly agree
• Vertical dimension: level of resources, including income, education, health, energy level, and degree of innovativeness
o Upper segments have more resources and are more innovative than the lower segments
• Horizontal dimensions: shows the segments’ primary psychological motivation for buying
• Internal motivations: three primary motivations of US consumers are ideals, achievement, and self-expression
o Ideals: guided by knowledge and principles
o Achievement: look for products and services that demonstrate success to their peers
o Self-expression: desire social or physical activity, variety, and risk
• Predictive abilities using VALS are better than using demographic variables (the “why” versus the “what”)
o Example: two consumers who match on many demographic variables – age, gender, income, education, zip code but not in risk tolerance
• Limitations: expensive and time consuming
List and define the five terms that marketers use to determine whether a segment is attractive to pursue.
- Identifiable: firms must be able to identify who is within their market to be able to design products or services to meet their needs
- Substantial: once you’ve identified potential target markets, determine if the market is large enough and has enough buying power to generate sufficient profits or be able to support the marketing mix activities
- Reachable: can the market be reached/accessed? The consumer must know that the product or service exists, understand what it can do for them, and recognize how to buy it
- Responsive: the customers in the segment must react similarly and positively to the firm’s offering
- Profitable: focus assessment on the potential profitability of each segment, both current and future
List, define, and provide an example of each of the four targeting strategies we discussed in class.
• Undifferentiated targeting strategy: or mass marketing: used when everyone might be considered a potential user of its product; focuses on the similarities in needs of the customers as opposed to the differences
o If the product or service is perceived to provide similar benefits to most customers, there is little need to develop separate strategies for different groups
o Examples: basic commodities (salt, sugar), gasoline, paper clips, pens
• Differentiated targeting strategy: target several market segments with a different offering for each
o Used because it helps firms obtain a bigger share of the market and increase the market for their products overall, also minimizes risk
• Concentrated targeting strategy: used when an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs; Niche marketing, entrepreneurial start-ups
o Example: Newton Running (concentrated on specific running style) vs. Nike (differentiated targeting strategy, with shoes in multiple segments)
• Micromarketing: when a firm tailors a product or service to suit an individual customer’s wants or needs
o Also called one-on-one marketing
o Using the internet allows customers to pick and choose features
o Examples:
• Amazon.com (using cookies to recommend products)
• Dell (each computer can be custom-made to some extent)
• Build-a-bear (allows children to create unique teddy bears)
• M&M (design M&Ms with custom phrases)
How does each of the following assist marketers in positioning their products: value proposition, salient attributes, symbols?
- Value proposition: the unique value that a product or service provides to its customers, and how it is better than and different from those of competitors
- Salient attributes: focus on attributes most important to the customer (e.g., Volvo means safety)
- Symbols: represent the brands
Define perceptual maps and ideal points
• Perceptual map: displays, in two or more dimensions, the position of products or brands in the consumer’s mind
• Ideal points: a specific spot on the perceptual map that shows where the customer’s ideal product would lie on the map
o In the book example, the size of the asterisks denotes the size of the market
What are the five steps of the marketing research process?
- Defining the objectives and research needs
- Designing the research
- Data collection process
- Analyzing data and developing insights
- Action plan and implementation
Define and provide an example of each of the following: secondary data, primary data, syndicated data, scanner data, and panel data
• Secondary data: information that has been collected prior to the start of the research project
o Examples include: ACNielsen panel data, US Census data, data gathered by information brokers
• Primary data: data collected to address specific research needs
o Examples: focus groups, in-depth interviews, surveys
• Syndicated data: available for a fee from commercial research firms such as SymphonyIRI Group, the National Purchase Diary panel, and ACNielsen
• Scanner data: used in quantitative research obtained from scanner readings of UPC labels at check-out counters
o Purchases at a grocery store/supercenter are rung up using scanner symbols, data acquired by commercial research firms, data used to help consumer packaged goods firms (e.g., Kellogg’s, Pepsi, Kraft)
• Panel data: information collected from a group of consumers, organized into panels, over time
o Often includes purchase records, responses to surveys
Why is data mining useful for companies?
- Data mining: uses statistical tools to uncover previously unknown patterns in the data or relationships among variables
- Allows for the company to see how different promotions, product placements effect the consumer
How are qualitative and quantitative research similar? Different? What are some examples of each method?
- Qualitative deals with different qualities of product preferences, while quantitative deals with numbers
- Similar in how they are done and have data collection research
- Qualitative uses observation, in-depth interviews, focus groups, and social media to data collect
- Quantitative uses experiments, surveys, scanners, and panels to data collect
Provide three advantages and disadvantages to secondary and primary data.
• Secondary Data
o Examples: Census data, sales invoices, internet information, journal articles, etc.
o Advantages: saves time in collecting data because they are readily available; free or inexpensive (except for syndicated data)
o Disadvantages: May not be precisely relevant to information needs; information may not be timely; sources may not be original, and therefore usefulness is an issue; methodologies for collecting data may not be appropriate; data sources may be biased
• Primary Data
o Examples: Observed consumer behavior; focus group interviews; surveys; experiments
o Advantages: Specific to the immediate data needs and topic at hand; offers behavioral insights generally not available from secondary research
o Disadvantages: costly; time consuming; requires more sophisticated training and experience to design, study, and collect data
Provide a brief explanation of the Milgram experiment and the Stanford prison experiment.
• Milgram Experiment: justification for acts of genocide offered by those accused at WWII criminal trials, examined if people would obey when told to cause harm to others, dealt with giving shocks from 15V-450V
• Stanford Prison Experiment: had people selected as prisoners and guards and stuck them in a prison and examined what happened
o Within hours some guards began harassing prisoners in a brutal and sadistic manner
o Conclusion: people will readily conform to the social roles they are expected to play
How does the value proposition change when marketing new products? Existing products?
New products- inform customers as to how your product meets customer needs
Existing products- remind them why they use your product, or get them to switch to your product.
What are associated services and how can they help a firm’s value proposition?
- include the nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale service
- gives the consumer greater incentive to purchase a product; reduces the chance of buyer’s remorse
List, define, and provide examples of specialty products/services, shopping products/services, convenience products/services, and unsought products/services.
• Specialty products/services: products or services: products or services toward which customers show such a strong preference that they will expend considerable effort to search for the best suppliers
o Examples: legal or medical professionals, luxury cars, real estate transactions
• Shopping products/services: products or services for which consumers will spend a fair amount of time comparing alternatives
o Internet searching, store to store shopping, meeting with salespeople – but a quicker decision time than for specialty products/services
o Examples: furniture, apparel, appliances, travel alternatives
• Convenience products/services: products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase
o Examples: commodities – beverages, bread, soap, candy
• Unsought products/services: products consumers either do not normally think of buying or do not know about
o Products require more marketing efforts, various forms of promotion
o Examples: any newly introduced product, especially if it is a new product category
• iPhones
• GPS
• Click-and-mortar stores
Define and provide an example of a firm’s product mix and product lines.
• Product mix: the complete set of all products offered by a firm
• Product lines: groups of associated items that consumers tend to use together or think of as part of a group of similar products
• Product mix encompasses all the product lines. Examples of product lines are ready to eat cereal, cookies and crackers, toaster pastries, and organic and frozen for Kellogg’s
• Product mix: College of Business Administration, Diederich College of Communication, Klingler College of Arts and Sciences
• Product lines:
o Business: Accounting, Finance, HR Management, IT Management, Marketing, Supply Chain/Operations Management
o Communication: Advertising, Digital Media, Journalism, Media Studies
o Arts and Sciences: Biology, Chemistry, English, Theology
