Quiz 2 Flashcards
How do you increase sales in a mature market?
- STEALING from competitors
2. Finding NEW SEGMENTS of consumers and adjusting to them (ex. Diet Coke –> Coke Zero)
Three reasons to segment the market?
- Diverse consumer needs
- Limited Resources
- Gaining clear consumer insight
Geographic Segmentation pertains to:
Where customers LIVE
ex. you wouldn’t market a heater in Mexico
ex2. Pizza toppings offered around the world differ
Demographic Segmentation includes:
- AGE Segmentation
- GENDER Segmentation
- INCOME Segmentation
- ETHNIC Segmentation
NEEDS evolve through time
Gender Segmentation
Ex. Wedding planning services that are catered to men as they are becoming more involved compared to the past
Income Segmentation
Ex. Cars vs. luxury cars
catering to a higher income or lower income as Toyota does with Lexus
Ethnic Segmentation
Ex. Specific stores sell certain products the culture of the people surrounding it in Canada (Asian grocery aisle)
Psychological Segmentation uses ____ and ____ to segment market.
- self concept
(what people like to be seen as, ex. dating websites that advertise happy couple) - Lifestyles
(ex. lululemon)
Behavioral Segmentation pertains to products’
Benefits,
Usage Rate,
Occasion and
Loyalty
Benefit Segmentation (Behavioural) is based on
the DIFFERENT BENEFITS that consumers are looking for with a product
ex. Choice to watch a rom com with your partner over an action film
Occasion Segmentation (Behavioural)
Ex. Selling suits for formal occasions vs. daily wear
Ex2. Packing chips based on use (party pack, snack pack)
Loyalty Segmentation (Behavioural) involves
- 80/20 Rule: you get 80% of profit from 20% of customers
- extract the most you can out of loyal customers, even by giving rewards
Usage Rate Segmentation (Behavioral) includes programs that
attract people with low usage rate more often
Multiple Segmentation includes
geodemographic segmentation
- combines multiple types of segmentation
Positioning is
the MENTAL PICTURE people have about a company and services relative to competitors
What does positioning help to do?
Helps Communicate
- Value proposition
- Benefits and reasons to purchase
EVER CHANGING to stay relatable
Value Propositions
- Get more for more (luxury)
- Get more for the same (ex. Lexus)
- Get more for less (not often possible, but most desirable ex. Uber)
- Get the same for less (Walmart)
- Get less for much less (budget airlines)
Positioning Methods include:
- Product attributes
- Benefits and symbolism
- Competition (the most costly)
- Market leadership
Positioning using market leadership involves
being dominant in the market so you just focus on being a leader
Perceptual Map of Positioning is drawn up using
specific attributes in your market
ex. cost and quality
ex2. convenience and taste
Roles in marketing research include
-Descriptive Role (What?) - Diagnostic Role (Why?) - Predictive Role (What's next?)
What is the first step in Market Research?
Identify the Problem
- Major source of poor research designs
- Thoroughly review relationships and factors involved
For example, what would you consider when researching a restaurant’s slow sales?
- Factors that go into customer decision to dine out
- Demographic profile of patrons
- External factors (time, expense, location) influence willingness to dine out
Second Step in Market Research?
Design the Research
Types of Research include
Exploratory and Conclusive
Exploratory Research
- Looks for KEY RELATIONSHIPS and variables Find out effective factors by: - Speaking with industry professionals - focus groups - expert interviews - literature search
Conclusive Research
follows exploratory research
- how these variables relate to your problem and connect
The 2 Types of Conclusive Research
Descriptive: Surveys, observation
Causal: Experiments
Third Step in Market Research
Collecting the Data
Secondary Data
info that’s already out there
ex. buying data from companies, Canada Stats
Primary Data
find your own info and collect data based on your need
Inexpensive, Clarifies Problems, Fast to Collect
Advantages of Secondary Data
Collected for another purpose, Questionable Resources, Quickly outdated
Disadvantages of Secondary Data
Focuses on solving a specific problem, sources are known, results more accurate
Advantages of Primary Data
Expensive, Time- consuming, Requires specific skills sets
Disadvantages of primary data
Qualitative Method
- determines scope
- no quantitative data
- depth interviews
- focus groups
Quantitative Methods
- More convincing
- Survey research
- Interviews
- Observation research
- Ethnographic Research (blending in)
- Experiments (field or lab)
Probability Samples are taken when
you randomly pick 100 people, this can be generalized to the population
Non-probability samples are taken when
you pick the most convenient groups, can’t be generalized
Final 3 Steps of Marketing research are
Analyze the data
Present the Report
Provide Follow Up
Managerial recommendations are
actionable strategies that can be followed up on
Big Data is
Collected information for over 10 years and tries to find patterns
Factors to consider when evaluating segment attractiveness
- Identifiable
- Reachable
- Responsive
- Substantial and profitable
Mass Marketing is
undifferentiated targeting
ex. sugar, salt, fuel greeting cards
- Want to get away from this by making yourself something different
Differentiated Targeting strategy targets
each segment based on their needs
ex. Adidas Group –> adidas, reebok, taylor made
Concentrated (Niche) targeting is
- focused on YOUNG people
- try to just please their segment and make money from them
ex. A&F
Micromarketing is
- very specific, based on person
- Was only B2B in the past but now public with tech
ex. Designing own sneakers on nike.com
Ethical Dilemma with marketing example discussed in class
Marketing designer labels to kids/ teens
Pure Good example
Clothes
Pure Service example
Air travel
Cell phone and service is
A product and service
Core benefit of a product is
the beginning of every new idea
- How should I satisfy this need in the market?
Actual Product is
the product you receive/ sell
- involves the brand name, features, design, packaging
Augmented Product is
things aside from the actual product, side services
- includes after sales service, installation, warranty, and delivery/ credit
Convenience Products
- DON’T spend alot of time researching
- Impulse (last minute)
- Staples (Fuel, paper, toothpaste)
- Emergency (AMA, last min needs for holidays)
Shopping Products
Think about purchase
- May be important to research to some and not others
- most INVOLVED purchases
ex. appliances
Specialty Products are
luxury products
- only a percentage of the market will pay so you don;t have to make them cheap
- want it to be rare
Unsought Products
normally don’t want to have
- business puts pressure on you
ex. insurance, pre-planned funeral service, donating blood
Product Mix means
a firm must think in terms of its entire portfolio
Adjusting product lines and mixes can involve
- product MODIFICATIONS
- Functional mods
- Style mods
- Planned Obsolescence
- Re-positioning
- Line Extensions
- Line Contractions
What is essential as the market changes?
New Product Developments
NPD: Idea Generation stems from
- Customers (using a loyalty club to propose new ideas)
- Employees (Google employees develop new projects)
- Distributors
- Competitors
- Vendors
- R&D
- Consultants
NPD: Idea Screening involves
Concept tests
- test your concept on your market
NPD: Business Analysis involves
the numbers and seeing if an idea will be profitable
NPD: Development includes
making a prototype and testing within the company then a sample population
NPD: Test Marketing involves
testing your product on a small remote population that resembles the real population
NPD: Commercialization involves determining
the important things about the product vs. the product itself
ex. distribution etc
Types of Innovations
- Continuous
- Discontinuous
- Dynamically Continuous
Continuous (Incremental) Innovations
neither behaviour or tech changes
- Line extensions, small changes
ex. Razors with more blades
Dynamically Continuous Innovations
Some tech has changed but behaviour is the same
- upgraded tech
ex. new monitor resolutions, mobile music tech
Discontinuous (Radical) Innovations
Major tech and behaviour change
ex. hoverboards
What do disruptive innovations do?
- change how a market behaves - changes the whole market
- starts with a small segment and then takes over
ex. Uber, airbnb
