Chapter 9 Marketing Exam 2 – Flashcards
Unlock all answers in this set
Unlock answersquestion
____ ____ is when you aggregate consumers into groups that have similar needs and will react similarly to a marketing action
answer
market segmentation this matters because: new products fail all the time because of poor marketing segmentation, companies try to sell to the wrong customers, have to adjust approach for different segments
question
what are the 3 segmentation strategies
answer
1. one product and many segments 2. multiple products and multiple segments 3. mass customization
question
market segmentation links ____ ____ to an org.'s marketing program
answer
market needs
question
what are some of the variables for market segmenttion
answer
1. demographics 2. geography 3. psychographics 4. usage/commitment (behavioral) 5. benefits (behavioral)
question
what 3 things are involved in psychographics (what is in the middle and what are the 3 arrows that point to that)
answer
middle-lifestyle 1. activities/attitudes 2. interests 3. opinions
question
What is the 80/20 rule?
answer
80% of profits come from 20% of consumers -heavy users drive profit
question
what are the steps involved in need-based market segmentation?
answer
1. need-based segmentation 2. segment ID 3. segment attractiveness 4. segment profitability 5. segment positioning 6. segment strategy "acid test" 7. marketing mix strategy
question
what does the STP marketing process stand for
answer
market segmentation, targeting, and positioning
question
what is involved in the segment attractiveness step?
answer
1. market demand (market size, growth rate, growth potential) 2. competitive industry (is there a big enough market)? 3. market access (ex: barriers to entry) -overall trend: question you are trying to answer is is this feasible?
question
what is involved in the segment profitability step?
answer
this is the financial side of the process- ex: how long will it take to breakeven? -estimate net marketing contribution
question
what is involved in the segment positioning step?
answer
after choosing which segment to target -position differently to each segment -involves developing a customized value proposition -highlight the benefits perceptual position: perception in people's minds; perception in relation to competitors -develop a storyboard for each segment -market research is important in this step
question
"Volvo is a premium-price automobile that offers the utmost safety and dependability" What is this an ex of?
answer
a positioning statement
question
The ____ of a product/brand in consumers minds relative to competitors products
answer
perception -part of positioning
question
what is important in perceptual positioning?
answer
1. positioning is directed to target markets 2. based on substantive brand value, no fluff 3. memorable, distinctive, and different
question
What are 4 popular bases for positioning?
answer
1. attribute 2. price and quality 3. competition 4. product user
question
a product is associated with an _____, product feature, or consumer benefit in which positioning base?
answer
attribute ex: colgate
question
this positioning base stresses high price as a signal of quality or emphasizes low price as an indication of value -give an ex
answer
Price and quality -ex: rolex
question
a product is positioned directly against or away from one or more ______ in which positioning base
answer
competitors; competition -ex: pepsi vs. coke
question
this positioning base focuses on a personality or a type of user
answer
product user base -ex: mac (creative, young, cool type) vs pc (frumpy, old-fashioned, business type, old man)
question
what positioning base is used in this case: -when a company is trying to catch up to industry leaders -usually newbies/underdogs comparing themselves to really established brands/leader brands
answer
Competition positioning base
question
Companies ____ rarely and only if they have to, because consumers want consistency
answer
reposition
question
changing the place of offering occupies in a consumer's mind relative to competitive products
answer
repositioning
question
this technique is.... -used to revive an ailing brand -used if original ____ is obsolete -fix a new market entry
answer
repositioning -original positioning (ex: in the auto industry if positioning was that you are the safest, not enough anymore, most cars are by law very safe)
question
What is the challenge associated with repositioning?
answer
changing perceptions of a brand forged over years of advertising -hard to change perceptions
question
____ ____ are used for (re)positioning
answer
perceptual maps -multi-attribute, multi-alternative model
question
briefly describe the steps involved in repositioning chocolate milk for adults
answer
1. identify important attributes of chocolate milk for adult drinkers 2. discover how adults rate various competing drinks/attributes 3. discover how consumers see your chocolate milk/attributes 4. reposition chocolate milk to make it more appealing to adults
question
discuss the perceptual map we used in class for repositioning chocolate milk for adults
answer
on the x axis: kid drink----adult drink on the y axis: low nutrition---high nutrition -originally, chocolate milk was pretty high in nutrition but considered a kid drink -reposition strategy was the diagonal drawn from the kid drink side to the adult drink side with an increase in nutrition
question
What was the repositioning strategy for chocolate milk
answer
-promoted traditional nutritional value -changed packaging (ex: made it bigger for bigger hands, made it so it fit in cup holder)
question
what is involved in the segment strategy step
answer
-"Acid test" -test your storyboard w a sample of customers -marketing mix stragey for those segments
question
What are the 5 important pieces of shortcut criteria for effective segmentation
answer
1. similarity of needs of potential buyers within a segment itself 2. difference of needs (in order to be separate segments) 3. simplicity and cost of assigning potential buyers to segments 4. potential for increased ROI and profit (financially viable?) 5. feasibility of reaching a chosen segment with a particular marketing action (can we reach after developing 4 Ps?)
question
what is the shortcut of criteria for selecting a target market?
answer
1. size of segment (has to be big enough to be profitable) 2. expected growth of segment 3. competitive position (within market) 4. cost of reaching the segment 5. compatibility with the organization's objectives and resources
question
What is the calculation/equation for net marketing contribution? What step is this value assigned with?
answer
Net marketing contribution= segment demand x segment share x price/unit x percent margin - (marketing + sales expenses) Segment Profitability
question
involves aggregating prospective buyers into groups, ____, that 1) have common needs and 2) will respond similarly to a marketing action
answer
market segmentation
question
the relatively homogeneous groups of prospective buyers
answer
market segments
question
the existence of different market segments has caused firms to use a marketing strategy of
answer
product differentiation
question
involves a firm using different marketing mix actions, such as product features and advertising, to help consumers perceive the product as being different and better than competing products
answer
product differentiation -differences can be nonphysical, size, color, image, price
question
a business goes to the trouble and expense of ---- its markets when it expects that this extra effort will increase its sales, profit, and ROI
answer
segmenting
question
What is a benefit to the multiple market segments 1 product approach
answer
-avoids the extra costs of developing additional products
question
What is an example of the 1 product multiple segments segmentation strategy
answer
magazines -books, movies -Harry Potter: marketed to preteens, teens, and adults -disney resorts
question
What are the 5 criteria for effective segmentation
answer
1. similarity of needs of potential buyers within a segment 2. difference of needs 3. simplicity and cost of assigning potential buyers to segments 4. potential for Increased profit and ROI 5. feasibility of reaching a chosen segment with particular marketing action
question
____ _ ___ requires both detailed analysis and large doses of common sense and managerial judgment
answer
segmenting a market
question
What are the 5 essential criteria market segments should meet?
answer
1. simplicity and cost-effectiveness of assigning potential buyers to segments 2. potential for increased profits 3. similarity of needs of potential buyers within a segment (that in turn lead to common marketing actions) 4. difference of needs of buyers among segments (if the needs of the various segments aren't different enough, combine them into fewer segments) 5. potential of a marketing action to reach a segment (should require a simple but effective marketing action)
question
if increased sales don't offset extra costs of adding a different segment...
answer
combine segments and reduce the number of marketing actions
question
What are the 5 variables that can be used to segment US consumer markets
answer
1. demographics -based on an objective classification attribute whether physical (gender, race), measurable (age, income) of prospective customers 2. psychographics -based on some subjective mental or emotional attributes (personality), aspiration or needs of prospective customers 3. geography -based on where prospective customers live or work (region, city size) 4. benefits-behavioral segmentation 5. usage/commitment-behavioral segmentation -based on observable actions or attitudes by prospective customers such as where they buy, what benefits they seek, how frequently they buy and why they buy
question
Because more than half of US households are made up of only 1 or 2 people, Campbell packages meals with only 1 or 2 servings for this market segment.
answer
Demographic segmentation
question
People that live near one another tend to have similar lifestyles, have similar interests, and buy similar offerings. T/F
answer
true
question
College dorm students want to keep/prepare their own food but they are short of space. Micro-Fridge understands this and markets a combination microwave, refrigerator, and charging station all in one.
answer
behavioral segmentation: benefits of product features
question
Airlines have developed frequent flyer programs to encourage passengers to use the same airline repeatedly to create loyal customers.
answer
behavioral segmentation: usage rate -usage/commitment
question
What does the 80/20 rule suggest
answer
that a small fraction of customers provides most of the firm's sales
question
36.1% of the US pop that are heavy fast food users provide 63.6% of the actual consumption volume. What is this an example of?
answer
the 80/20 rule
question
Why must a firm choose its target markets carefully and reach the perfect middle ground?
answer
if it picks too narrow of segments, it may fail to reach the volume of sales and profits it needs -if it selects too broad a set of segments, it may spread its marketing efforts so thin that they extra expense exceed the increased sales and profits
question
What are some of the criteria used in selecting the target segment/looking for segment attractiveness
answer
1. market size -there is no market for breakfast among dorm students who are on meal plans, so you should not devote any marketing efforts toward reaching this tiny segment 2. expected growth -sales of fast food meals eaten outside the restaurant are projected to exceed those eaten inside, and Wendy's drive thru is faster than McDonalds. This speed and convenance could benefit night commuters in adult education programs 3. competitive position -the less the competition, the more attractive the segment is -dorms announcing "no meals on weekends" is more promising for wendys -wendys recently introduced an app for ordering to keep up with burger king 4. cost of reaching the segment -the few nonstudents who live in the area may not be reachable 5. compatibility with the org.s objectives and resources -if Wendy's does not have the cooking equip. to make bfast and has a policy against spending more $ on equip.
question
Step 5: segment positioning -in the book, "take marketing actions to reach target markets" What do you do here?
answer
develop a customized value proposition, highlight the benefits
question
when a company introduces a new product, a decision critical to its long-term success is how prospective buyers view it in relation to those products offered by its competitors
answer
positioning the product
question
___ ___ refers to a place a product occupies in consumers' minds based on important attributes relative to competitors products
answer
product positioning -position in the mind
question
"For upscale American families who desire a carefree driving experience, Volvo is a premium-price automobile that offers the utmost in safety and dependability"
answer
positioning statement -focuses Volves North America marketing strategy, so Volvo advertising almost always mentions safety and dependabilitiy
question
What are the 4 steps associated with discovering the perceptions in the minds of potential customers
answer
1. Identify the important attributes for the product 2. Discover how target customers rate competing products for the same attributes 3. Discover where the company's product is on these attributes on the minds of customers 4. Reposition the product in the minds of potential customers
question
a means of displaying in 2 dimensions the location of products/brands in the minds of consumers -enables managers to see how consumers perceive competing products/brands as well as the firms own product/brand
answer
perceptual maps
question
What were the 4 specific steps involving in repositioning chocolate milk
answer
1. Identify the important attributes for adult drinks 2. Discover how adults see various competing drinks 3. Discover how adults see chocolate milk 4. Reposition chocolate milk to make it more appeal to adults
