Marketing Ch. 9 Flashcards

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How many steps are in the segmentation, targeting and positioning process?
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5
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What are the steps of STP?
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1) establish strategy or objectives (S) 2) Use Segmentation methods (S) 3) Evaluate segmentation attractiveness (T) 4) Select target market (T) 5) Identify and develop positioning strategy (P)
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What are the 5 segmentation methods?
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Geographic, demographic, psychographic, benefit, and behavioral
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Geographic segmentation
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organizes customers into groups on the basis of where they live
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Demographic segmentation
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groups consumers according to easily measured, objective characteristics such as age, gender, income and education
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Psychographic segmentation
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how customers actually describe themselves
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Self-values, self-concept and lifestyles describe what segmentation method?
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Psychographic
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Self-Values
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goals for life, not just the goals one wants to accomplish in the day
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self-concept
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people's self image, image people ideally have of themselves
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lifestyles
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the way we live
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VALS (Value and Life Style Survey)
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most widely used tool to support psychographic segmentation efforts, owned and operated by Strategic Business Insights (SBI)
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True or False, firms are finding that psychographic segmentation schemes like VALS are often more useful for predicting consumer behavior than are demographics
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True
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benefit segmentation
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groups consumers on the basis of the benefits they derive from products or services; ex) Hollywood movies, people visit theaters to obtain vast variety of benefits (want to laugh= adam sandler)
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behavioral segmentation
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divides customers into groups on the basis of how they use the product or service; occasion & loyalty
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occasion and loyalty are part of which segmentation method?
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behavioral segmentation
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Occasion
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based on when a product/service is consumed; ex) Men's warehouse uses for promotions, some need suits for work every day, some just want for special occasion (prom, wedding)
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Loyalty
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companies investing in this segmentation; using retention and loyalty initiatives to retain their most profitable customers ex) punchcards,
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T/F: Firms often use a combination of segmentation methods
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True
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geodemographic segmentation
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combination of geography, demographic and lifestyle characteristics to classify customers
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What are the 5 parts of evaluating the segment attractiveness?
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1) Substantial 2) Identifiable 3) Reachable 4) Profitable 5) Responsive
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Identifiable
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firms must be able to identify who is within their market to be able to design products or services to meet their needs
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Substantial
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measure the target markets size; if market is too small or its buying power is insignificant, it won't generate sufficient profits or be able to support the marketing mix activities
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Reachable
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Best product cannot have any impact if that market cannot be reached (or accessed) through persuasive communications and product distribution
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Responsive
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customers in the segment must react similarly and positively to the firms offering
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Profitable
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marketers must focus on their assessments on the potential profit-ability of each segment, both current and future
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Segment Profitability Equation
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= (segment size x segment adoption percentage x purchase behavior x profit margin percentage) - fixed costs
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What are the 4 target strategies?
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1) undifferentiated (aka mass marketing) 2) differentiated 3) concentrated 4) micromarketing (aka one-to-one)
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undifferentiated target strategy (aka mass marketing)
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-when everyone might be considered a potential user of its product ex) salt, sugar
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differentiated target strategy
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target several market segments with a different offering for each ex) Conde Naste has 20 niche magizines (Vogue for fashion lovers, GQ for fashion-conscious men, The New Yorker for literature lovers); ex) Nike shoes (basketball, football, running, fashion, skateboarding shoes)
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Concentrated target strategy
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when an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market's needs ex) Newton running, focuses only on runners who prefer to land on their forefeet
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Mircromarketing (aka one-to-one)
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extreme form of segmentation; when a firm tailors a product to suit an individual customer's wants or needs
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T/F: its easier for an internet-based company to offer one-to-one marketing
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True
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Cookies
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small text files a website stores in a visitor's browser, provide a unique identification of each potential customer who visits and details how the customer has searched the site
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The last step of STP, Identifying and Developing Positioning Strategy, has which two options?
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Market positioning and value proposition
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market positioning
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involves a process of defining the market mix variables so that target customers have a clear, distinctive desirable understanding of what the product does or represents in comparison with competing products
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value proposition
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communicates the customers benefits to be received from a product/service, thereby provides reasons for wanting to purchase it
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The value proposition is when ______ & ______ overlap
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customer needs and wants & company offering (pg. 287)
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Value
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-a popular positioning method bc the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision -Value does not necessarily mean low price ex) Louis Vuiton; target market likes rare and expensive
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Perceptual Map
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displays the position of products or brands in the consumer's mind (pg. 291)
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