Marketing Ch. 7 Lecture

Front 1

- Quiznos understood that the restaurant business is way down because of the recession and more people are switching to convenient stores. So, they decided to create convenience stores
o Quiz: This example is about which of the 4 P’s?

Back 1

Distribution

Front 2

The importance of market segmentation

Back 2

o More precise definition of customers needs and wants
 More accurate marketing objectives
 Improved resource allocation
 *Improved ROI
• MORE SIGNIFICANTLY, IT IS MORE IMPORTANT TO GET A HIGHER MROI (MARKETING RETURN ON INVESTMENT)

Front 3

Bases for segmentation: Who we are

Back 3

o Geography
 Example: Company couldn’t break into the geographic market for magazines. They went out to get a response list and figured out who were in certain areas (they found geographics). What went wrong? Psychographics always trumps demographics. If we know their lifestyles, that is more important than demographics.
o Demographics
o Psychographics
 More important than demographics
 More people are buying based on their attitudes and lifestyles. They are hard to predict, but are better predictors if you can find them.

Front 4

Bases for segmentation: What/how we buy

Back 4

- benefits sought
- usage rate

Front 5

List the 4 variables for consumer markets

Back 5

- Demographic
- Geographic
- Psychographic
- Behavioristic

Front 6

Demographic variables

Back 6

Single variants
o Age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, social class

Front 7

Geographic variables

Back 7

o Religion, urban, suburban, rural, city size, county size, state size, market density, climate, terrain
o Wal-Mart example about detergent: There were 15 brands of liquid detergent and 2 brands of powdered detergent offered in Houston Wal-Mart. In Minneapolis, they offered more powdered brands than liquid. So, in the South the consumers used more liquid detergent and in the North they used more powdered detergent. Moral of the story: There are geographical differences that help segment products.

Front 8

Psychographic variables

Back 8

o Personality attributes
o Motives
o lifestyles

Front 9

Behavioristic variables

Back 9

(linear, start with volume usage and if you don’t have that, you go to end use, and if you don’t have that, you do to benefit expectations, and so on…)
o Volume usage
o End use
o Benefit expectations
o Brand loyalty
o Price sensitivity
 If you don’t have brand loyalty, you are more likely to look for coupons for another brand which is price sensitivity

Front 10

Geo-demographic clustering systems

Back 10

- Multi variables
o Geographic Census data
o Demographics Census data
o Lifestyle Compiled data
o Buying habits Compiled data
- Attempts to break population into descriptive groups
- “Birds of the feather flock together”
o This is about how people of the same demographics tend to be in the same geographic areas. College students tend to live in the same area. Companies use this information to place their products in places they know people will use them.
- Clustering systems
o Prizm: ZIP/Block group
o NDS: ZIP/Block group
o Acorn: ZIP/Block group
o Cohorts: Household

Front 11

Business segmentation criteria

Back 11

- Geographic location
- Type of company
o Dave worked at a factory that would shut down if it was too hot. Different kinds of companies have different procedures
- Company size
- Volume of purchase
- Product use

Front 12

Product positioning

Back 12

- The place an offering occupies in consumers’ minds on important attributes relative to competitive offerings.

- Includes head-to-head positioning and differentiation positioning

- At the end of the day, customers do the product positioning

Front 13

Head-to-head positioning

Back 13

Part of product positioning

Involves competing directly with competitors on similar attributes in the same target market
o Example of Ford pickup truck commercial: Ford’s commercials involve rugged terrain and manly things. Chevy and Dodge truck ads are the same. They are using head-to-head positioning. That positioning lays the same in the consumers’ minds. 5 minutes after the commercial, consumers can’t remember which brand the commercial was for because they are all alike. They need to differentiate their promotions.

Front 14

Differentiation positioning

Back 14

Involves seeking a less competitive, smaller market niche in which to locate a brand

Front 15

Communication audit: Handheld computers example

Back 15

o Graph with checklist of different brands on if they are expandable, have an organizer manager, color display, and are mobile.
 Mobile is the most important
 Other companies like Visor and Clie (Sony) didn’t create mobile handhelds and positioned themselves on being more expandable

Front 16

Positioning of P&G detergents

Back 16

- 2 different kinds of dishwashing soap: Dawn and Ivory. At one time, Ivory owned 40% of the market and Dawn owned 10% of the market. Now it is the opposite. Dawn is known for being tough on grease and Ivory is known for being easy on your hands. We don’t care about our hands anymore because we use the dishwasher more. Dawn positioned itself in this area so they became more successful.

Front 17

Mind scan positioning map

Back 17

Step 1: find the things that’s most important to customers
- Delivery, insurance, price, etc.
Step 2: Ask the consumers to rate these things in importance.
Step 3: Ask the consumers to rate competitive products (not our company) on those top 5 important traits.