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Marketing Principles > Week 4 > Flashcards

Week 4 Flashcards

1
Q

Customer-driven marketing strategy

A

A company must design customer-driven marketing strategies that build the right relationshipswith the right customers.

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2
Q

Market segmentation

A

Buyers in any market differ in their wants, resources, locations, buying attitudes and buying practices.
•
Companies divide large, heterogeneous markets into smaller segments:

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3
Q

Companies divide large, heterogeneous markets into smaller segments:

A 
1.
Segmenting consumer markets
2.
Segmenting business markets (don’t cover in this course)
3.
Segmenting international markets (don’t cover in this course)
4.
Requirements for effective segmentation
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4
Q

Segmenting consumer markets

Bases for identifying and analysing consumer market segments

A 
•
Geographical
•
Demographic
•
Psychographic
•
Behavioural
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5
Q

Geographic segmentation

A

Dividing a market into different geographical units, such as nations, regions, states, local government areas, cities or neighbourhoods.
•
A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants.

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6
Q

Demographic segmentation

A

•
Is the most popular bases for segmenting customer groups.
•
Dividing the market into segments based on various variables

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7
Q

The variables of demographic segmentation

A

Age and life-cycle stage
Gender
Income

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8
Q

Age and life-cycle stage

A

•
Analysing a market with the aim of directing marketing focus based on different age and life-cycle groups.
•
Marketers must be careful to guard against stereotypes when using age and life-cycle segmentation.
•
Age is a poor predictor of a persons life-cycle, health, work, or family status, needs of buying power

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9
Q

Gender

A 
•
Dividing a market into different segments based on gender.
•
Segmentation variable often used by marketers of:
–
Clothing
–
Cosmetics
–
Toiletries
•
An underdeveloped gender segment can offer new opportunities
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10
Q

Income

A

•
Dividing a market into different income segments.
•
Many companies target affluent consumers with luxury goods and convenience services.

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11
Q

Psychographic segmentation

A

Dividing a market into different segments based on variables such as socioeconomic, status, values attitudes and lifestyle groupings and personality. Marketers often segment using these variables

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12
Q

Behavioural segmentation

A

Dividing a market into segments based on consumer knowledge, attitudes, uses or responses to a product.

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13
Q

Types of Behavioural segmentation

A

Occasion segmentation

Benefits sought (benefit segmentation)

User status

Usage rate

Behavioural segmentation
Loyalty status

Using multiple segmentation bases

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14
Q

Occasion segmentation

A

Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase or use the purchased item.

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15
Q

Benefits sought (benefit segmentation)

A

Analysing a market with the aim of directing marketing focus based on the different benefits that consumers seek from the product.

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16
Q

User status

A

Marketers want to reinforce and retain regular users, attract targeted non-users and reinvigorate relationships with ex-users.

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17
Q

Usage rate

A 
Markets can also be segmented into
–
Light
–
medium
–
Heavy product users.
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18
Q

Behavioural segmentation

Loyalty status

A 
Consumers can be loyal to brands, stores and companies.
•
Buyers can be divided into groups according to their degree of loyalty:
–
Completely loyal
–
No loyalty
–
something different each time or
–
choice based on the price
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19
Q

Using multiple segmentation bases

A

•
Marketers rarely limit their segmentation analysis to only one or a few variables.
•
They use multiple segmentation bases in an effort to identify smaller, better-defined target groups.

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20
Q

Requirements for effective segmentation

A

There are many ways to segment a market, but not all segmentations are effective.
•
To be useful, market segments must be:

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21
Q

To be useful, market segments must be:

A 
–
Measurable
–
Accessible
–
Substantial
–
Differentiable
–
Actionable
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22
Q

Creating Segments

A

Combine variables to create specialised and differentiated segments

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23
Q

Creating segments example

A

Photo in favourites 14/8/18

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24
Q

Market targetingEvaluating market segments

A company must look at three factors:

A

1.
Segment size and growth -Sales, growth rates, expected profitability
2.
Segment structural attractiveness - Number of strong competitors, substitute product, power of buyers, power of suppliers
3.
Company objectives and resources.

25
Q

Selecting target market segments

A

After evaluating different segments, the company must decide which and how many segments it will target.

26
Q

Target Market

A

A set of buyers sharing common needs or characteristics that the company decides to serve.

27
Q

Target Market
A set of buyers sharing common needs or characteristics that the company decides to serve.
It can be carried out at several different levels:

A

Photo in favourites 14/8/18

28
Q

Undifferentiated marketing

A

A market-coverage strategy where the company decides to ignore market segment differences and go after the whole market with one offer.
•
This mass-marketing strategy focuses on the common needs of consumers, rather than on what is different.
•
The company designs a product and a marketing programthat will appeal to the largest number of buyers.
•
Mass-marketers often have trouble competing with more-focused firms that do a better job of satisfying the needs of specific segments and niches.

29
Q

Differentiated marketing

A

A market-coverage strategy in which a firm decides to target several segments and designs separate offers for each segment.
•
Differentiated marketing increases the costs of doing business.
–
A firm will usually find it is more expensive to develop and produce, 10 units of 10 different products rather than 100 units of one product.
•
Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion planning and channel management.
•
The company must weight up the increased costs against the potential revenues

30
Q

Concentrated marketing

A

A market-coverage strategy where a company targets a large share of one or a few segments or niches.
•
The company achieves a stronger market position due to its understanding of the customer needs
–
Can be more effectivedue to fine-tuning the marketing mix to meet the needs
–
Can be more efficientby targeting only those they can serve best and most profitably
•
Niches tend to attract fewer competitors
•
It does have risks due to
–
the reliance on one or a few segments if the market shifts
–
larger companies decide to enter the niche

31
Q

Micromarketing

A

The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments –includes local marketing and individual marketing.

32
Q

Local marketing:

A

Tailoring brands and promotions to the needs and wants of local customer segments –cities, neighbourhoods and even specific stores.

33
Q

Individual marketing:

A

Tailoring products and marketing programs to the needs and preferences of individual customers –also labelled ‘one-to-one marketing’, ‘customised marketing’ and ‘markets-of-one marketing’.

34
Q

Choosing a targeting strategy

Many factors apply when selecting a targeting strategy. It may depend upon various factors:

A

Photo in favourites 14/8/18

35
Q

Socially responsible target marketing

A

Issues for marketers arise when they target vulnerable or disadvantaged groups
•
Various Industries have a Code of Ethics as part of self regulatory system. For target marketing, the issue is not who, but rather, how and for what that may be the issue
Responsible target marketing call for segmentation and targeting that serve not just the interest of the company, but also the interest of those targeted.

36
Q

Various Industries have a Code of Ethics as part of self regulatory system. This is further supplemented by:

A 
–
Code of Advertising and Marketing to Children
–
Food and Beverages Code
–
Environmental Claims Code
–
Wagering Advertising and Marketing Communication Code
37
Q

Differentiation and positioning

A

•
Consumers are overloaded with information about products and services
•
To simplify the buying process, they organise products, services, and companies into categories and ‘position’ them in their minds.

38
Q

Product posiiton

A

A product position is the complex set of perceptions, impressions and feelings that consumers have for the product compared with competing products.

39
Q

Positioning maps

A

In planning their differentiation and positioning strategies, marketers often prepare perceptual positioning maps, which show consumer perceptions of their brands versus competing products on important buying dimensions.

40
Q

Positioning maps example

A

Photo in favourites 14/8/18

41
Q

Alternative Positioning maps

A

Positioning maps can be visually represented in two ways -they both represent the same positioning

Photo in favourites 14/8/18

42
Q

Choosing a differentiation and positioning strategy

A

Positioning is essential
•
Each company must differentiate its offer by building a unique bundle of benefits

43
Q

Differentiation and positioning involves three tasks:

A 
1.
Identify a set of differentiating competitive advantages
2.
Choose the right competitive advantages
3.
Select an overall positioning strategy
44
Q

Competitive advantage

A

To build profitable relationships with target customer, marketers must understand customer needs better than competitors and deliver more customer value.
•
A company can differentiate and position itself by providing superior customer value and gains competitive advantage. An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

45
Q

Competitive advantages
•
A company can differentiate itself or its market offer on five dimensions of differentiation:

A

Product

Services

Channel

People
Image

46
Q

Choosing the right competitive advantages - How many differences to promote?

A

•
Many marketers think that companies should aggressively promote only onebenefit to the target market
–
using a Unique Selling Proposition (USP)

•
Others think companies should position on more than onedifferentiator.
–
Particularly where two or more companies are claiming to be the best on the same attribute

47
Q

Choosing the right competitive advantages

A

•
Mass marketing today is fragmenting into many small segments.
•
Companies are attempting to broaden their positioning strategies to appeal to more segments.
•
Companies must be careful not to have too many claims, or they risk disbelief and loss of a clear positioning.

48
Q

Choosing the right competitive advantages
•
Which differences to promote?

A

–
Not all brand differences are meaningful or worthwhile
–
Not every difference makes a good differentiator.
–
Each difference has the potential to create company costs as well as customer benefits.

49
Q

Differences must satisfy the following criteria:

A 
Important
Distinctive 
Superior to alternatives
Communicable
Pre-emptive (competition can't copy)
Affordable
Profitable
50
Q

Selecting an overall positioning strategy

A 
More for more
More for the same
The same for less
Less for much less
More for less
51
Q

More for more

A

More for more positioning involves providing the most prestigious product or service and charging a higher price to cover the higher costs.

52
Q

More for the same

A

More for the sameCompanies can attack a competitor’s more-for-more position by introducing a brand offering comparable quality but at a lower price.

53
Q

The same for less

A

The same for less Offering ‘the same for less’ can be a powerful value proposition –everyone likes a good deal.

54
Q

Less for much less

A

Less for much less A market almost always exists for products that offer less and therefore cost less. Few people need, want or can afford ‘the very best’ in everything they buy.

55
Q

More for less

A

More for less Of course, the winning value proposition would be to offer ‘more for less’. Many companies claim to do this.

56
Q

value proposition

A

The full positioning of a brand is called the brand’s value proposition–the full mix of benefits upon which the brand is differentiated and positioned.

57
Q

Developing a positioning statement

A

A positioning statement, is a statement that summarises the company or brand positioning.
It takes this form:
To (target segment and need) our (brand) is (concept) that (point of difference).

58
Q

Communicating and delivering the chosen position

A

•
Once it has chosen a position, the company must:
–
take strong steps to deliver and communicate the desired position to target consumers.
–
ensure all marketing mix efforts support the positioning strategy.
•
Companies often find it easier to come up with a good position strategy than to implement it.
•
Once built, the company must maintain the positioning

Marketing Principles (12 decks)

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