Understanding the Customer Flashcards
What is STP?
Segment, target, position
How does marketing affect a company’s finances?
Marketing costs money, and influences revenue streams
How does marketing affect human resources?
Customer service is an extension of the product, and is a critical piece of your marketing. If your human resources behave in a way that reflects your company’s values reflected through marketing, there is consistency throughout your company
How have social trends and customer behaviours affected marketing?
They affect how companies target their customers by emphasizing different customer values or meeting changing customer needs
How has marketing affected social trends and customer behaviours?
It can affect and change people’s attitudes and what they expect from companies and from products
How have political trends affected marketing? Give some examples
It has changed what can be advertised and in what ways. Regulations change over time. For examples, regulations regarding cigarette and alcohol advertisements
How does marketing connect to the different critical success factors?
Achieving financial performance: when your marketing is effective, it will attract new customers / more frequent customers, which will improve your revenue streams
Providing value (quality products at a reasonable price): your product needs to deliver on your promises that you made through marketing
Encouraging innovation and creativity: in order for your marketing to be effective, you need to market in a way that reflects that values and technological status of the time
Gaining employee commitment: you need to make sure that the people who deliver on your promises through marketing are delivering the same message as you. You need to make sure the people you employ have the right talents/skills to deliver your product
What is marketing?
An integrated system of activities designed to plan, price, promote and distribute, want-satisfying goods and services to present and potential customers
What are the two keys that are essential to successful marketing?
- Provide a unique benefit
2. Convince the customer that they want your product
Describe key #1
Make sure that you are providing a unique benefit that is different from your competition. You do this by understanding your customer, and understanding your target market. You must provide something the customer wants or needs: your solution must FIT with their problem
What two elements of the business model canvas are connected by creating a problem-solution fit?
Value proposition and customer segments
Describe the target market
The group of customers/customer segments to whom you wish to direct your product towards. This group of customers is people whose wants and needs have NOT been met sufficiently by the competition. You need to identify a niche that is not currently being served
What are the three steps you can use to define your target market?
- Market segmentation
- Perceptual mapping
- Preference analysis
What are the four bases for target market segmentation?
- State-of-being
- State-of-mind
- Product usage
- Benefits sought
What are the five forms of consumer market segmentation?
- Demographic
- Geographic
- Psychographic
- Benefit
- Usage-rate
Describe the state-of-being basis for target market segmentation
Who are they, how old are they, where do they live?
Describe the state-of-mind basis for target market segmentation
How the customer thinks, attitudes, interests, opinions
Describe the product usage basis for target market segmentation
The amount of use, how they use it (as a gift, for example), what way do they use it
Describe the benefits sought basis for target market segmentation
Why would they use this product, what do they gain from using this product
Describe how similar products can have different benefits sought by using an example
The New Honda Odyssey is a mini van. It is bought by people who want a big vehicle for all their kids
The Honda Civic Type R is a racing car. The benefit sought for this product is a more exciting driving experience
Describe the different characteristics of demographic segmentation
Age, education, gender, income, race, social class, household size, etc.
Describe the different characteristics of geographic segmentation
Regional location, population density, city or country size, climate, etc.
Describe the different characteristics of psychographic segmentation
Lifestyle, personality, interests, values, attitudes
Describe the different characteristics of benefit segmentation
Benefits provided by the goods or service
Describe the different characteristics of usage-rate segmentation
Amount of use (light versus heavy)
What is the first target market segmentation that you ALWAYS have to start with?
Benefits sought
What are the three steps used to define your target market via market segmentation?
- Segmentation on basis of benefits
- Describe target markets using other bases
- Name the segments
How do you use perceptual mapping and preference analysis to find your target market?
You find the biggest gap between how the customer perceives how the competition is meeting their needs (perceptual map), and what they really want (preference analysis). In short, it is where their needs are not being met sufficiently by the competition
What are the steps to perceptual mapping and preference analysis to find your target market?
- Draw axes that represent the relevant dimensions/criteria by which people perceive and evaluate different product offerings
- Locate the positions of competing products on the axes/dimensions according to customer perceptions (perceptual map)
- On a separate map locate each segment’s ideal product (perception analysis)
- Bring the two maps together and determine the target market based on where the biggest gap is
What is the goal of positioning?
Finding a distinct position for your product in the customer’s mind, one that communicates that the product provides a unique benefit. The objective is to positions the product in the target’s mind as close to their ideal as possible
What are the two approaches to achieving the ideal position?
- Consumer approach
2. Competitive approach
Describe the consumer approach in marketing
Focus on the benefit (preference) that is provided by the product
Describe the competitive approach in marketing
Point out how the competition is not meeting their needs (perception)
What are the four types of products?
- Unsought products
- Convenience products
- Shopping products
- Specialty products
What is product classification?
Identifying what “type” of product your consumers classify your product as and how they behave when buying your product
What do you use product classification for?
It affects how you sell and market your product
What are some examples of unsought products?
Life insurance, burial plots, new products
What is the degree of effort expended by customers for unsought products? What does this mean for your marketing?
Customers put in little to no effort (they avoid buying it), so you have to put in a lot of effort and make it very easily accessible to customers
What are the three types of convenience products?
- Staple
- Impulse
- Emergency
Describe staple products and give some examples
Products that customers buy every time they go to the store, and they always make sure to have. Eg. bread, milk, eggs
Describe impulse products and give some examples
Products that customer buy on impulse. Eg. gum, chips, magazines, etc.
Describe emergency products and give some examples
Products that customers buy only when they need to or are running out. Eg. window washer fluid, toilet bowl cleaner, etc.
What is the degree of effort expended by customers for convenience products? What does this mean for your marketing?
Customers expend just a little effort when they are shopping for convenience goods. To convince customers to buy your product, you need to focus on things that grab customer’s attention, like branding, packaging, etc. You want these goods to be in the same place as similar goods so that people don’t have to put a lot of effort into comparing goods
What are the two types of shopping goods?
- Homogeneous
2. Heterogeneous
Describe homogeneous goods and give an example
Shopping goods that are indistinguishable from each other except by price. Eg.
Describe heterogeneous goods and give an example
Shopping goods that have distinct and unique characteristics that help to differentiate themselves from each other (other than price). Eg. cell phones, cars, glasses
What is the degree of effort expended by customers for shopping goods? What does this mean for your marketing?
They spend a considerable amount of effort buying shopping goods; they shop around and compare and contrast different goods. You want your goods to be easily accessible to customers, but it doesn’t necessarily have to be immediately available. You could have your own store that people could go to just for you (eg. stores in malls)
What is the degree of effort expended by customers for specialty products? What does this mean for your marketing?
Customers expend the maximum amount of effort. They are willing to put in the time and effort to learn more about specialty products, so you can specialize your brand/product more
Give some examples of specialty products
Luxury cars, collector’s items, cottages, etc.
What are the four stages of the product life cycle?
- Introduction
- Growth
- Maturity
- Decline
What are the marketing objectives of the introduction stage?
Encourage trial, establish distribution. You want to set up trials that will get your customers interested in trying your product without committing (like free trials)
What are the product goals of the introduction stage?
Establish competitive advantage
What are the distribution strategies/goals of the introduction stage?
Establish distribution network
What are the promotional strategies/goals of the introduction stage?
Build brand awareness
What are the pricing strategies/goals of the introduction stage?
Set introductory https://www.brainscape.com/decks/6626955/cards/quick#price (skimming or penetration pricing)
What are the marketing objectives of the growth stage?
Get triers to repurchase, attract new users
What are the product goals of the growth stage?
Maintain product quality
What are the distribution strategies/goals of the growth stage?
Solidify distribution relationships
What are the promotional strategies/goals of the growth stage?
Provide information
What are the pricing strategies/goals of the growth stage?
Maintain prices until near the end of the stage and then start to drop
What are the marketing objectives of the maturity stage?
Seek new users or uses
What are the product goals of the maturity stage?
Modify product
What are the distribution strategies/goals of the maturity stage?
Provide additional incentives to ensure support
What are the promotional strategies/goals of the maturity stage?
Reposition product
What are the pricing strategies/goals of the maturity stage?
Reduce prices to meet competition
What are the marketing objectives of the decline stage?
Reduce marketing expenses keep loyal users
What are the product goals of the decline stage?
Maintain product
What are the distribution strategies/goals of the decline stage?
Eliminate trade allowances
What are the promotional strategies/goals of the decline stage?
Eliminate most advertising
What are the pricing strategies/goals of the decline stage?
Maintain prices
What is an example of a product in its introduction stage?
New Venture, artificial intelligence, virtual headsets / reality, new Apple products
What is an example of a product in its growth stage?
Tesla
What is an example of a product in its maturity stage?
Nike
What is an example of a product in its decline stage?
Blackberry
How do you speed up the product life cycle?
You assume that the product goes into decline (skipping steps), and you focus on a new product instead that will gain better traction/attention
Why would you speed up the product life cycle?
If you are in the introduction phase for a long time but your product is not gaining a lot of momentum
How do you slow down the product life cycle?
You rework the product, coming up with a new use or a new user
Why would you slow down the product life cycle?
If you see that your product has a lot of potential and you want to get the most out of it but you are getting to the peak of the cycle
Give an example of a product that has slowed down the product life cycle
Baking soda: it used to be used only for baking, but now it is also used for deodorizing green bins, etc.
Give an example of a product that has sped up the product life cycle
Johnson’s baby products: during the baby boom there were lots of babies when Johnson’s baby products came out, but now the baby boomers are all grown up. Now, Johnson’s baby products are introduced as “for the entire family”
