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67 Cards in this Set
- Front
- Back
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Why Segment Audience
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Reduce complexity across consumers
Help formulate strategy |
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Why Target Audience
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Maximize effectiveness of marketing dollars
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How to Segment Audience
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Divide market into groups based on import consumer characteristics
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How to Target Audience
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Select one or more market segments to enter based on profitability
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What are Marketing Segments?
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Collections of Customers
Within segments customer should be as similar as possible Between segments customers should be as different as possible |
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Dimensions to Segment On
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Demographics, Psychographics, Benefits, Behavioral
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Demographics
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"What" customers are:
Age, gender, income, geographic, etc. |
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Psychographics
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"Why" customers buy
Lifestyle (activities, opinions, attitudes towards life) Personality (the "type" of person they are) |
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Behavioral
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What customers "do"
Usage occasions (what types of activities) Usage rates (how often they use a product) Loyalty status (how often they use different brands) |
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Requirements for Effective Segmentation
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Measurability, Accessibility, Profitability
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Targetting
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Potential Profitability, Projected Loyalty:
(High, High): True Friends (High, Low): Butterflies (Low, High): Barnacles (Low, Low): Strangers |
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Economics of Customers
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Top 20% of active customers deliver 60-80% of revenues
Top 20% of active customers deliver more than 80% of profits Majority of marketing budgets are spent on non-customers |
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Product Differentiation
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Creation of tangle or intangible differences relative to main competitors
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Positioning
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Where product differences occupy in the minds of consumers
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Questions for Positioning Strategy
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What dimensions to look at?
Where is the competition? Where are the gaps in competition? |
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Perceptual Map
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Map showing the locations of competitors in terms of the dimensions chosen to position against
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Mind of the Consumer
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Objective (technical details)
Subjective (how does this affect me?) |
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Positioning Strategy Toolkit
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Who am I for? (target market)
Who am I? (Value proposition) Why buy me? (Single most important support) And not the competition (Competitive set) |
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Dimensions for Positioning Strategy
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Product Quality
Class of Users Owning the Category Against a Competitor |
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Positioning Traps
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Positioning on unimportant attributes
Positioning on the wrong attributes Positioning on someone else's benefit |
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Types of Marketing Research
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Focus Groups
One-on-one interviews Secondary Research Database Research Observational Research Surveys Experiments |
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Which Research Design is Best?
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(Researcher knows question, Respondent know answer)
(yes, yes): Descriptive Research (surveys) (yes, no): Descriptive (observation), Causal (experiments) (no, yes): Exploratory (focus groups, interviews) (no, no): Secondary (internal, external) |
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Surveys
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Versatility: attitudes, behaviors, classification, etc.
Quantitative and qualitative Low entry cost |
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Observational Research
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Using a tracking sheet to record what people *actually do*
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Why Businesses Don't Experiment
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Short-term loss for long-term gain
Businesses value answers versus questions Fear of risk of failure |
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Consumer Decision-Making Process
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Need Recognition
Information Search Evaluation of Alternatives Decision / Purchase Post-purchase Evaluation |
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Evaluation of Alternatives
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Perception
How consumers select, organize, and interpret stimuli into a meaningful picture of the world Preference Function of how perceived attributes satisfy consumers' needs and wants |
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Need Recognition in Context
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Cultural (culture, subculture, social class)
Social (reference group, family, status) Personal (age, occupation, economic sitch, personality) Psychological (motivation, perception, learning, beliefs) |
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Anticipated Regret
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Consumer believes they will regret making a purchase.
Results in delayed or fore-gone purchases |
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Experienced Regret
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When a consumer regrets making a purchase
Can sometimes linger for years |
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Implications of Consumer Behavior on Marketing
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Need Recognition
Advertising helps stimulate need recognition Information Search Personal WOM, Advertising, Public Sources, Experimental Evaluation Social Attitudes Characteristics of buyer and buying situation |
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Three Levels of Product
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Core Customer Value (The "Why")
Actual Product (Features, Design, Brand, etc.) Augmented Product (Support, Delivery, Warranty, etc.) |
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Four Service Characteristics
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Intangibility
Inseparability Perishability Variability |
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Intangibility
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Services cannot be seen, tasted, felt, heard, or smelled before purchase
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Inseparability
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Services cannot be separated from their providers
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Perishability
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Services cannot be stored for later sale or use
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Variability
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Quality of service depends on who provides them and when, where, how they do so.
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Servicization
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How to incentivize good service?
How to augment your products? |
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Three Types of Service Marketing
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Customer-contact to provide customer satisfaction
Traditional Marketing via the 4-P's Training service employees to interact with customers |
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The Service-Profit Chain
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Links employees and customer satisfaction to firm profits.
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Five Links of Service-Profit Chain
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Internal service quality
Satisfied and productive service employees Great service value Satisfied and loyal customers Healthy service profits and growth |
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Revenue Models
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Subscription
Transaction based pricing (credit cards) Profit sharing Ownership sharing Ad-based revenue |
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Product Lifecycle (PLC)
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Product Class has longest life cycle
Product Form has standard Brand can change quickly due to competitiveness |
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Practical Application of PLC
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Challenges
Often difficult to forecast sales, length of each stage, and shape of PLC When used carefully, PLC can help develop good marketing strategies |
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Product Line
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Group of closely related products, sold to the same type of customer groups, marketed through the same outlets, or fall within the same range
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Product Mix
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The set of all of the product lines and items a particular seller offers for sale
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Brand
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A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
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Why Branding?
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Advantages to buyers:
Help identify products Cue to product quality and consistency Advantages to sellers: Basis for product's quality story Provides legal protection Helps to segment markets |
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Virtuous Cycle of Branding
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Firms with greater brand value will lose more if they cheat on quality....
...So firms invest in branding and quality... ...So consumers use brand as a credible signal of quality |
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Channel Surfing
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More than half of customers shop for information in one place and then defect to another channel to buy
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Value Poaching
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Make use of services at high-touch channels, purchase at cheaper channel
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Channel Functions
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Market-makers (ebay)
Buyer agents (brokers) Seller agents (salesmen) Payment enablers (visa) Fulfillment Providers (FBA) Context providers (mall) |
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Goal of Channel Management
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Never get in between your buyer and the way they want to shop
Do not *force* consumer into channel... create the channel paths they want to use. |
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Channel Conflict
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Channels are essentially negotiated arrangements between warring parties. Can be horizontal (retailer to retailer) or vertical (wholesaler to retailer)
Introducing change requires great finesse |
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Channel Rationalization
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A shared understanding between channels.
Each channel complements and backs each other up. |
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Cost Based Pricing
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Sell products at a certain markup from cost
Product driven |
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Value-based pricing
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Based on buyer's perception of value
Value driven |
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Cost vs. Value
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Firms should sell value, not price.
Price reductions can cut profits and initiate wars Marketers should strive to convince customers that price is justified by value provided |
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Types of Segmented Pricing
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Customer-segment (same good, different price)
Product-form (diff. versions, diff. price. not cost based) Location-pricing (different prices charge per geography) Time-pricing (according to time of year, season, etc.) |
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Promotion Decisions
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Content (message to convey)
Channel (how to get it heard) |
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Goal of Promotion
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Generate explosive, sustaining customer demand while keeping costs under control
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Promotion Mix
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Advertising
Public Relations Direct Promotion Sales Promotion Personal Selling |
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Public Relations
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Reaches people who avoid salespeople and ads
Tends to be an afterthought Planned use can be effective and economical |
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Goal of Sales Conversion
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Maximize value to customer but minimize cost to firm
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Types of Sales Promotion
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Trade Promotions and Consumer Promotions
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Trade Promotions
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Applies to retailers and wholesalers to get them to buy, stock, or display product.
Slotting allowance, quantity discounts, etc. |
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Consumer Promotions
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Used to generate trial or repeat purchase using coupons, rebates, or sweepstakes
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